A Good Problem for Funeral Home Owners to Have

The funeral home owner had to tell his preneed salesman to stop selling our new package. The salesman wasn’t happy and quit shortly after that. Here’s the rest of the story…

Years ago, I was working with a client who had a 400-call firm in a market that used to be fairly traditional but had shifted to 70% cremation. He was still serving 400 families a year but making much less money because roughly 100 families were choosing a direct cremation with no services.

My first recommendation was to develop a new package to offer his direct cremation families.

The owner and I brainstormed and came up with the idea of offering a memorial event at a local Irish pub. He operated in a state with tight restrictions concerning food and drinks at the funeral home, so this approach allowed him to avoid the regulations.

It was a new venue, but he had been there with his family, liked the place, and knew their banquet room would be perfect for an event. He contacted the pub manager, and they worked out the details.

Our new package was called the Celtic Farewell and would be held in the pub’s banquet room, The package was designed for up to 50 people, and our all-inclusive price was $5,000 ($100 per person). The pub charged us $3,000 ($60 per person), so the gross profit was $2,000.

We held a training session for the staff, and the Funeral Directors began offering the package when making at-need arrangements. At the same time, the preneed salesman started offering families the new package.

A week later, I had an update from the owner. His Funeral Directors hadn’t offered the package to anyone yet. But his preneed guy had offered it twice and hoped to finalize the contracts soon.

By the end of the month, his Funeral Directors had offered it to 4 families with no takers so far. But his preneed guy was hitting a home run!

He sold four to new families that he met with that month. Plus, he decided to call every family who had arranged a direct cremation within the past six months and offer the Celtic Farewell package. That effort resulted in six more sales in the first month.

My client called me in a panic….

Client: John, I have a huge problem. I have checks for $50,000 (10 orders at $5k each).

Me: That’s a good problem to have!!

Client: No, the problem is I need to figure out what to do with the money. I thought I could just put it in my preneed trust, but they won’t let me do that. My accountant doesn’t know how to classify the money in our books, so I haven’t deposited the checks.

Me: As I said, this is a good problem to have. Let’s figure it out.

We knew how to handle the revenue if it was an at-need Celtic Farewell, but in a preneed situation, we needed to get with the state board and preneed trust company to understand our options.

It took a couple of months to resolve it with the state, and in the meantime, we had to tell the preneed salesman to stop offering the package. As I said above, he quit shortly after that.

Eventually, we resumed offering the package to both at-need and preneed families. As we had hoped, the package was a hit with families who didn’t want a funeral or visitation and had planned on a direct cremation.

At the end of the first year, the funeral home owner reported that they had sold twenty Celtic Farewells for $100,000 in additional revenue and $40,000 in gross profit. We were off to a great start!!

Only 2 of the 20 sales were at-need; the other 18 were preneed. The following year, they sold even more, and once again, the preneed salesperson made most of the sales.

You might be wondering why they were so successful selling this to preneed families. Here’s why…

Many at-need families are emotionally exhausted. Even if the death is expected, they are often numb and have difficulty making decisions. People in that state of mind rarely want to venture into the unknown.

They understand what a funeral is and might consider that option. They might know what a direct cremation is; if not, it’s pretty easy to understand an option involving so few decisions.

But to buy your new package, they must understand it. Many at-need families will struggle to understand anything new because they’re emotionally exhausted.

Also, Funeral Directors often follow the “we find out what the family wants and give it to them” approach. That approach only works if the family fully understands their options before the arrangement meeting.

But your new package is something that they didn’t know existed. In this situation, you must be prepared to walk them through the new package and discuss how it might fit their family.

That’s why it’s so important for you to have something like a video presentation that will help families understand what you are offering. A Funeral Director may struggle to explain the package themself, but they should be able to press play on a video.

In a preneed situation, the family isn’t emotionally exhausted and can easily make decisions. If they do not want a traditional funeral, they’re more open to considering new options like a celebration of life or, in our case, a Celtic Farewell.

To summarize…

  • You need a new package for families who do not want a traditional funeral and will probably choose direct cremation unless you have something else to offer.
  • Don’t be surprised if you are initially more successful selling this package to preneed families than you are with at-need families.
  • Be sure to figure out what you are going to do with the revenue. Most of it will be preneed revenue, but it may not fit into your current preneed trust program.

Remember, offering a new package (like the Celtic Farewell) might result in revenue that won’t fit in your preneed trust. But that’s a good problem to have!

Until next time


PS: In last week’s newsletter, I made the point that every funeral home owner should develop a premium offer, especially if you want to succeed with Baby Boomers. Here’s the link in case you missed it.

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