Imagine you own a restaurant and typically sell 20 high-end steaks daily at $75 each. That’s $1,500 in revenue just from the steaks. Add in side dishes, a bottle of wine, and dessert; those 20 customers generate $3,000 or more.
You do the math and determine that your steak customers generate 80% of the profit in your business. Then, based on the profit margin, you expand that part of your menu, add “Steak House” to your sign, and remove most of the low-margin items.
Everything goes great for years, but then you notice your steak orders starting to decline.
Maybe a Ruth’s Chris Steak House opened in town, and all of the steak lovers go there now.
Maybe your entire community went vegan, and nobody told you. It doesn’t matter what caused the change; the fact is your steak business has dried up.
You hang on for as long as you can, but eventually, you must make some hard decisions. Are you going to continue a business model that isn’t working? Do you close the restaurant and lay off your staff?
What would you do?
You would probably decide to rework your menu to offer food that people want to buy. After all, people still need to eat, and you love to give them a great dining experience. But you need to find something new to offer them.
That’s a fundamental principle of business. If you are selling a product that people are not buying, you need to find something else you can offer them, or your business will not survive.
Let’s apply this same principle to your funeral home.
You’re making arrangements with a family whose father has passed away. They start by saying something like “Dad didn’t want a funeral” or “Dad just wanted to be cremated.” Most Funeral Directors would write up a direct cremation and hope the next family wants a traditional funeral.
The traditional funeral market has been in decline for decades. The cremation rate in the USA was 57.5% in 2021. By 2025, it is projected to be 64.1% in the USA and 81.8% in Canada, so this situation isn’t getting better soon.
Today, most funeral homes have the following two items on their menu.
- traditional funeral
- direct cremation
You make your profit off of #1 and have more #2’s than you’d like.
Just like the restaurant above, it’s time to rework your menu.
I’ll discuss packaging in a future newsletter but for now, think of these as your “specials” menu.
I believe that every funeral home should present the following four items to families.
#1 Traditional Funeral
Yes, traditional funerals are in decline, but many people still prefer this option. You already know how to deliver a funeral, so this is an easy thing to continue.
However, if you have a dedicated casket selection room, I would recommend that you repurpose that room for something else. The only people who like casket selection rooms are Funeral Directors and casket salesmen. Instead, let families select caskets on a computer or iPad.
#2 Basic Cremation
Yes, you still need to offer a low-cost cremation option. The reality of today’s society is that many people choose this option for financial reasons and others prefer it because they do not see the value in a traditional funeral.
I would avoid the term “direct cremation” because discounters focus their marketing message on this term. Instead, use something like “Basic Cremation” or “Simple Cremation.”
Also, be prepared to explain why your fee is higher than the low price advertised by the discounters. For example, you might say that your basic cremation service includes a private viewing for immediate family members only.
#3 Casual Gathering
This is a new option to present to a cremation family who does not want a traditional funeral. Instead of a visitation, give them the opportunity to hold a casual gathering at the funeral home.
The key is that it must be casual, so remove the rows of chairs and replace them with pedestal tables. If your state allows it, offer wine & beer. Fill the room with memorabilia, pictures, videos, and more.
#4 Life Celebration Ceremony
Families who do not want a traditional funeral often do not belong to a church or haven’t been there in years. In some cases, it’s not that they don’t want a ceremony; they just don’t want to do it in a church.
If you have a trained funeral celebrant or if you are just an experienced speaker who is comfortable in front of an audience, offer families the opportunity to have a ceremony at the funeral home.
You might be surprised that even traditional funeral families like the idea of holding a life celebration ceremony in addition to a church service.
Those are the four options you should present to families
- Traditional Funeral
- Basic Cremation
- Casual Gathering
- Life Celebration Ceremony
You already have #1 and #2. Adding #3 and #4 to your menu can make your funeral home far more relevant to today’s families and help restore your bottom line.
Always remember that “Dad didn’t want a funeral” does not mean they don’t want anything. They simply don’t want a traditional funeral. So what else do you have to offer them?
Until next time
John
