First Impressions

If you believe in the old adages, “You only get one chance to make a first impression,” and “The first impression is the most important,” how would you react to realizing that for an ever-increasing number of families, the first impression they get of you, of your staff or your facility occurs before any personal, direct contact is made or facilities visited. For a large number of families, first impressions are made when they first visit your website on the internet. This is particularly true in transitory communities, but it is also true, but to a lesser degree, in all communities. Your website and your social networking sites, such as Facebook, serve as your calling card and the means by which many individuals become introduced to you and your funeral home. It is safe to note that one of the truisms in today’s funeral profession is that this is not your grandparent’s funeral home. In fact, it is not your parent’s funeral home. What is meant by this is that, as an owner or manager, your funeral home is operating in an ever-changing social and economic environment where technology is having a direct impact on how funeral homes conduct business. This could not be truer than when viewed in connection with marketing. Websites and social networks do not supplant the need and benefits of community involvement and attending social functions, such as bean suppers at the local church. Marketing through the use of technology is a very effective means to gain market share in your service area.

While many funeral directors choose to ignore the changing demands and changing attitudes of the families in their service areas, other funeral directors see that their funeral home has an opportunity to increase their market share by reaching out to the community through websites and social networking. The key for gaining market share is reaching out to families in your service area and showing them that your funeral home has the services and merchandise available that will meet their needs. Technology provides funeral directors with the tools to reach out to families that were never served by their funeral home. Reaching out also begins with providing at-need and preneed families with choices and options that go beyond the traditional definition for funeral services. Professionally designed virtual showrooms and programs that inform your families of the alternatives available are tools that will increase family satisfaction enhance your cash flow and increase profitability. It is not enough that funeral homes provide non-traditional services. It requires that funeral homes inform families that alternative services are available. It is very important that during the arrangement process families are informed, or in many cases educated, to the various options available to them, particularly when it comes to cremation services. An often asked question becomes, “What is wrong with traditional funeral services?” The answer is absolutely nothing, except that more and more families are selecting non-traditional services.

When was the last time that you asked yourself as an owner or manager “What can my funeral home do to better meet the needs of the families that I serve and what can we do as an organization to reach out and convince our competitor’s families that we are better at meeting their needs?” It may sound cold or unprofessional to refer to at-need and potential families as consumers, but in actuality, from a pure marketing perspective, that is in fact what they are and it is how they should be viewed. There can be no argument that in order to deal with and meet the high demands of grieving families, it takes a special type of caring and sensitive person. The ability to be sincerely emphatic and compassionate when dealing with families is the hallmark of a good funeral director. Unfortunately, it can also be those quality characteristics that make them a poor business person. Today’s ever-changing and competitive funeral profession requires funeral directors to be astute business persons and it demands that they seek outside professional help. The idea of understanding and evaluating the needs and purchasing habits of families as consumers opens up an entirely new way of thinking about and addressing the needs of the families.

Do you know how many direct cremations your funeral home provided last year, or how many families that selected cremation also purchased a casket or urn? If your answer to this last question is no, it is important to take the time and summarize the information in order to evaluate the changes and trends. This process begins by summarizing each statement of goods and services provided over the past five years. Each type of service provided should be broken down in a manner that enables relevant information to be extracted and evaluated. Information that is important includes: number of cremations and services and merchandise selected; number of families selecting caskets and the average cost of the caskets selected; number of families selecting vaults and the average cost of the vaults selected; number of families selecting urns and other merchandise and the average cost of the urns and other merchandise. The previous list is just an example of the information needed. The idea is to summarize the data in a manner that facilitates a clear understanding as to what the families are selecting. Here is another good example of where a quality funeral home software program that is integrated with financial programs will serve as a valuable tool.

All funeral directors, regardless of the number of calls they handle or the number of years that they have been in the profession, would be well served by receiving annual training in the areas of marketing, particularly important is training that incorporates technology. Funeral directors, just like everyone else in a profession or a business, develop routines and procedures. This is not to claim that all routines are not good or effective, but without new ideas being presented to funeral directors through training, they can become complacent in their approach to dealing with the needs of families. More importantly, they become locked into a mindset and routine that eventually gets them into financial trouble. Simple math proves that funeral homes that use so-called standard pricing are less profitable when families select non-traditional funeral services and merchandise. The standard pricing model is one in which families that select traditional services and merchandise are paying a greater share of the funeral home’s overhead than those families selecting non-traditional services, such as direct cremations or cremations with a memorial service. Funeral directors that provide quality services should not be ashamed to present their families with general price lists. They must feel confident in the manner in which they discuss the charges to the family and the requirement that payment is expected. This gets us back to first impressions and a key question with reference to price lists. Why not provide families with the opportunity to view your price lists on your website?

If you are not comfortable or are hesitant about including price lists on your website, you need to step back, take a minute and ask yourself why not? The real key here is to find out why you are not comfortable with putting your prices on your website. If you are one of the many funeral directors that find it difficult to discuss pricing and payment terms with families, you will probably be reluctant to put your prices on your website. If you find it difficult to discuss money and pricing with your families, it is time and a great opportunity to receive professional training in proper ways of presenting price lists and discussing payment policies. Due to nationwide difficult economic times and an ever-changing environment in the funeral profession, funeral home owners can no longer afford to act as banks by not collecting the money from the families prior to or on the day services are provided, unless specific and guaranteed arrangements, such as insurance assignments are obtained. There are many reasons that funeral directors find it difficult in talking about money, but one big reason is that they do not feel comfortable in the amounts that are being charged. This insecurity can normally be rooted in the fact that too many funeral directors do not take the time to understand the financial side of their funeral home. Funeral directors that take the time and involve themselves in understanding the financial side of their funeral home are more likely to prepare general price lists that will meet their financial goals. This understanding of the necessity for using effective price lists is the key to developing proper collection polices. Price lists that are properly prepared make it easier for funeral directors to gain confidence in presenting them to the families. Properly prepared means much more than being in compliance with the Federal Trade Commission and state regulatory authorities. It means having price lists that generate proper amounts of cash flow and are easy for families to understand why they are being charged for the services and merchandise that they select.

A funeral home’s website should be the nucleus and education center from which families, friends and relatives log on to receive accurate information regarding your funeral home’s philosophy, services provided, merchandise available, facilities, personnel, current and past obituaries, schedule of services and viewing, links to other useful websites and much more. The key is that the website should serve as a limitless resource by aiding families in dealing with their questions and needs. Funeral home websites and social networks do not replace the need for funeral directors to become and remain active members of their community, but they are valuable tools. An ever-increasing number of households have internet, and according to the Internet World Stats, in 2009, 76.2 percent of the North American population uses the internet. From 2000-2009, this growth in usage increased by 140.1 percent. It is not uncommon to walk into nursing homes and see residents surfing the net. Why not give the residents the ability to completely preplan their funeral arrangements? The internet through the use of websites and social networking is providing a means by which funeral homes can increase their market share by reaching out to new families. The key to successful marketing is the ability for providers of services and merchandise (funeral homes) to instill confidence in the consumers (families) that they are receiving value for the services and merchandise they purchase (select). Funeral homes that provide price lists on their websites are communicating a message to those who visit their websites that says, “We believe in transparency and we are comfortable with the amounts we charge.” Funeral directors who view the changes in the funeral profession as a challenge and opportunity for increasing their market share by reaching out to meet the needs of all families, will be the ones who see increases in their bottom line.   FBA

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Ronald H. Cooper, CPA, is a funeral home accountant with Cooper & Associates, CPA, LLC.  He can be contacted at 866-446-0656, or by email at ron@funeralhomeaccounting.com.