Pricing is relative, but one low-cost provider can beat us all up


Inflation has set in. . . I recently had to install a new air conditioning condenser to our existing HVAC combination unit.  An air conditioning condensor, like a funeral or cremation expense, is something you don’t buy everyday. . . . in fact, maybe less than once a decade.


And, when I called my trusty hometown dealer and asked for an installed price I nearly fell off my chair.  You see, I had searched the internet, like I do before many purchases to get an idea of the price range.  I told him I would give him a call back and then I went in search of more detail on the internet pricing that I’d seen.


What I found out was that the low prices I saw from “discount dealers” did not include installation and, in general, the discount price listed was the price of the least desirable model. . . one that might only cool about 1,000 square feet of space instead of the 2,500 square feet space that I needed cooled.


Last Thursday my new air conditioning condenser was installed by our local HVAC guys with no problems and if we ever get warm weather in Minnesota again, I’m all set.  It was more expensive than what the “discount dealers” were advertising, but I’m guessing that I came out better as a consumer in the end because “everything” was taken care of with one call.


Tom Anderson
Funeral Director Daily

Making the Death Care comparison —  As a 43-year funeral director licensee these type of situations always make me pause about how the experience can be related to death care.  If you ever watch METV, a national cable network that offers re-runs of programs from some time ago and is popular with people of my age, you will notice that direct cremation providers advertise on it quite frequently.


In my television marketing area at any given time I will see three different direct cremation providers advertise over a 30-minute period.  One of them offers a price guarantee of $800. . . .the other two either don’t list prices or are higher than that price.


So, I’m guessing that when potential direct cremation customers call their “trusty local funeral home” that has served them for generations and hear a price for direct cremation of, let’s just say $2,900, they may be a little like me when I got the price from my trusty HVAC dealer. . . and fall off their chair.


You see, because of the price exposure on television they were thinking $800 and now you are giving them a price 3.5 times that amount. . . . . for what they “perceive” is the same thing.


“Perceive” or Perception” is the key word here.  It is not reality but my old friend former six-term U.S. Congressman Vin Weber used to always tell me, “Voter’s perceptions win elections”. . . .I took that to mean during my business career that it is not always reality that “gets the vote” or “makes the sale” but it is the “perception” of what one was getting that makes your case.


So, when you get that inquiry call from a consumer, you need to know what to tell them to have them ‘perceptionally” realize why your services at $2,900 may be a better value than what they see advertised at $800. . .


Now, you know that it is not the “same thing” but the dilemma comes in the fact that the consumer doesn’t know that.  So, you either have to know what to say at this point or you have to hope that customer does what I did with the HVAC — investigate further on their own.


That’s the burden that many traditional brick and mortar funeral homes have now as we move into what seems like a movement towards more and more direct cremations in our society.  You need to know what you offer that brings that $2,900 price into more of a justified price to the consumer. . . . just as the better quality and great service did for my HVAC purchase. . . And, the answer can’t be “that’s what we need per service to pay the bills”.


Not a knock against the low-cost provider —  This is America so if a firm can charge $800 per call and make a living through its volume of business more power to them.  As the business of caring for the dead in America goes and we get a wider scope of available services, if a company can come up with a low-cost alternative and and keep their own costs low enough to be profitable, again, more power to them. . . .And, they will be tough competition to anybody with that low price-point.


Interestingly enough, the cremation provider that I’m using as an example here tells consumers directly on their website that “they do not even offer visitations/funerals/memorial services”.  Clients are encouraged to do those options, if wanted, on their own.  They also don’t do obituaries and tell their clients of a national service to help them with that.


My guess is that not providing those services keeps their services, and costs, limited enough where they can offer $800 direct cremation services.


So, I’ve learned through my HVAC experience that pricing is relative. . . . .However, when there is a low-cost or discount provider making their price widely known it is a challenging factor that has to be dealt with in some, way, matter, or explanation.  My suggestion to those death care providers who have to deal with these low-cost providers is know what you offer in service, service, and more service. . . . And, don’t be afraid to tell potential client families about that.


In a price-point world, as I can relate from my HVAC story, service can be the differentiator.


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