Business

The FedEx strategy shift. . where do funeral homes go?

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Editor’s Note:   For as yet unknown technical reasons, our daily article was not sent out earlier this morning.  Sorry. . here it is.

All things are created equal. . . . until they’re not.  In the death care business I’m not so sure all of the calls we get at our funeral homes are created equal.  A death call that ends up being a full traditional funeral with casket and vault sale is probably more than equal to a direct cremation call.  At least that is the way that I looked at it, revenue wise, while I was in business.

However, in today’s world it might be easier to pull in two or three direct cremation calls than it is to pull in one full traditional death call with a casket and vault sale.  If that’s the truth. . . .what do you market to?

I recently read this short brief from The Hustle.  I was struck on how FedEx’s business priorities and profitability levers have changed over the recent years.  And, it made me think of funeral homes.

FedEx is one of those stories that is taught at every business school in the United States.  In 1965 founder Fred Smith wrote a term paper while at Yale University theoretically inventing an “overnight air delivery system” from point to point covering the entire United States.  He didn’t get a very good grade on the paper, but FedEx was founded by 1971 and delivering overnight by 1973.  Here is the FedEx story.

What’s interesting to me is that recently FedEx has morphed their business model so that while they still deliver by aviation, it is their FedEx Ground enterprise that is growing by leaps and bounds.  Recently, while the air delivery business has grown at a 60% clip, the FedEx Ground business has more than tripled in revenue.

I think there may be something to learn here.  There are a lot of packages that go overnight via air.  However, there are a lot more packages that go 2-5 days via ground and it appears that FedEx has put their efforts into taking that lower revenue ground package times a lot more packages over the absolutely has to be there overnight, high revenue packages which are used in more moderate numbers.

Tom Anderson
Funeral Director Daily

Maybe nothing. . . .but does that tell us anything about the strategy of chasing the high revenue, high margin full service funerals at a higher priority than going after the lower revenue, lower margin, but growing in use direct cremation cases?  Can a funeral home do both. . . can we be all things to all people? . . . FedEx still does well with both models — air and ground.

Air and ground. . . what about casket and cremation?

As death care changes with the possibility of more revenue sources for service providers, does your funeral home stand pat or do you change your strategies?  Quality versus quantity may be a question we need to ask as consumer preferences change over time.

If a death care provider can “get the calls” is there opportunity for lots of additional sales items to build your profits — online memorials, cremation jewelry, lunch receptions, and more?  Do we have the facilities and amenities to replace the casketed calls we will probably lose to consumer preference over time?

Should your funeral home focus on getting the “quality calls” or on just “getting the calls”?  Where will the profits be?

Great questions as an industry evolves over time.  How does your funeral home look at it?

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One Comment

  1. Will Fedex start to carry cremated remains even domestically within its spheres of operation world wide.
    That would be great help to the funeral industry. World wide.

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