Preneed is the answer

This article picks up on yesterday’s discussion of what could happen as more crematories are built expanding the supply of crematories in the United States.  Yesterday’s discussion then went to the thought process and question of, “Will this excess capacity in cremation move cremation to a lower and lower retail cost as death care companies vie for the limited number of clients?”

Shortly after I wrote that article I came to the conclusion that, even if that does happen, the answer for funeral homes is to combat that drive with preneed and consumer information.

I no longer work in the day to day operation of a funeral home but I like to think I have some idea of what continues to go on in the discussion among the  consumer and the funeral professional when cremation is suggested as the final disposition choice at the time of need.  At that time a consumer family has many times made up its mind of what it perceives as services. . . . even if they have not been made aware of all of the options.  I look at the options for cremation disposition in these four basic forms:

  1. Direct cremation — a simple cremation with the remains then given to the family
  2. Concierge cremation — Direct cremation plus some added services given by the funeral home.  These could include obituary writing, post-care grief services, help with a cemetery, and even an urn included in the package.
  3. Cremation with Memorial Services — What it says, all of the above plus a service and possibly an evening visitation the day prior to the memorial service.
  4. Prepared or Casketed Cremation —  In general, a full funeral service and visitation with a cremation or rental casket prior to the cremation.

As a funeral service provider moves up in complexity of these choices his financial margins should also move up helping his bottom line.  And, I am one who has always believed that, given choices and the knowledge of such, some potential cremation consumers will move up to a greater level of services.  Cost, many times is important, but knowledge may be far greater in helping that family move up the ladder.

So, how do you get your families educated?  I think it starts with preneed and the invitation to have this explained to them.  Also, I’m of the opinion that the knowledge is far better received by the consumer family if it comes when healthy in a preneed environment rather than trying to make an explanation at the time of an at-need death.

Group seminars are probably the way to get this done.  Back at about the year 2000 our community was starting to really grow into a regional center city. . . a city where a lot of retired people move into from the small farming communities that they made their living in.  Our community was larger and offered good options for retirement aged people — restaurants, theatres, health care, and more living options.  Those type of amenities helped our community grow rapidly and I noticed a great opportunity for potential funeral call number growth if we could get these newcomers to become partial to our funeral home over the others.

Oddly enough, I thought back to First Lady Nancy Reagan and her “Say no to drugs” campaign.  Part of her philosophy was to get the word out to younger and younger children and the DARE program in elementary schools was started.

I then pilfered that philosophy and moved our target ages for pre-arrangements lower.  We had always advocated for pre-arrangements and to take stock of your mortality as you apply for Social Security.  However, we now moved the age down to 55 and over.

We then composed a letter that we sent out, bought mailing lists of new residents 55 and older, told recipients that we would only take 45 minutes of their time on a Tuesday morning, and offered couples a $20 gift certificate at a great community restaurant just for attending.  Our goal was, even if they did not want to pre-arrange, to make a new friend and give these new people a look at who we were and what we stood for.  I told our staff, “If these people walk out with no pre-arrangement appointment, but simply state to each other that those (funeral home people) were nice people, we had accomplished much”.  We had made a friend who would probably use our funeral home if needed and steered them away from using a competitor.

Our staff got really good at this.  We found out that if we sent out 200 letters we would get about 10 couples to attend, which cost us $200 in gift certificates and about $100 in postage.  We gave a short questionnaire to fill out upon exiting, and that questionnaire results showed us that about 8 of the 10 couples wanted an appointment to pre-arrange.  That monthly seminar alone gave our pre-need counselor the chance to write 16 lives during the month.  If we closed half of those pre-arrangements, then we acquired 8 new clients for about $300. . . .a customer acquisition cost of only about $40 per customer.

An added benefit of these seminars was the cremation information knowledge we were able to impart to the consumers.  I would believe that there were many attendees, whether they pre-arranged or not, who moved their cremation disposition choice up the ladder.

Our funeral home had a large numbers of services increase in the years 2000 to 2010 and I believe that this seminar segment was a large cause of it.

Funeral Director Daily has a sponsor, Laker Planning Service, that specializes in PreNeed seminars.  If you aren’t doing something like this today, give Laker CEO Pat Zalusky a call on how he can help you.

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