For some time now I have been disappointed in the comparative reports that the funeral trade publications and other funeral organizations have been producing for us funeral homes. The ones I’m talking about are the annual Federated Reports, The Funeral Insider survey results, NFDA surveys, SIFH Comparative reports, just to name a few. While all of the reports and the data they show can be helpful, they fail to show how the change in the mix of business (i.e. percentage of cremation and the percentage of what types of services provided) is really affecting the bottom line and the funeral industry as a whole. I think one of the main problems is that these reports average too many different types of services and geographical areas into one number. Let me try to explain.
For years the “number” we all wanted to compare was average funeral sale based on casket and services. Sometimes the reports also threw in the vault sale too. This number was OK when we were all at 10%-20% cremation. But as my business has shifted to over 50% cremation that number is not as relevant as it used to be. For the last 15 years I have broken down my data by disposition (burial or cremation) and service type within each disposition. I break things down into multiple areas in those categories that are specific to the types of service we provide in our area. But I think on a national basis we can break things down into 5 different service types.
Burial
- Full Service – with or without visitation – Includes – casket, vault, printed material, services, facilities, and autos
- Direct Burial/Graveside Service
Cremation
- Full Service – with or without visitation but always with the body present. Includes casket or rental casket, urn, printed materials, services, facilities and autos.
- Memorial Service – no body present (may include private family viewing) includes urn, printed material, services, facilities and autos
- Direct Cremation – No services and No visitation with the funeral home involved.
I would throw out any trade calls, public assistance and children calls. We could nit-pick about regional variations but I think nearly every call can be put into one of these five categories.
Now if a whole bunch of funeral homes were willing to submit sales data on each of their calls (not just yearly totals and averages) to a national database, then those numbers could be broken down and compared with other folks who have similar cremation percentages, different regions of the country or volume breakdowns. I know that’s asking a lot and there would need to be guaranteed confidentiality. But frankly, comparing my average sale to someone doing 20% cremation is of no value to me. We are not in the same business. I need to know how other folks around the country are doing in similar situations to me.
It seems to me that a perfect place for this to happen would be through the major funeral home website providers. They are already hosting databases of obituaries for all of their clients. It would be easy to add another data entry screen for the sales figures for each of those calls. The data provided to their clients could be invaluable. That could also be a selling point for the website providers who claim that their web sites can increase market share and profits.
Are you listening out there Funeralnet, FuneralOne, Tributes.com or even NFDA???
I’m Dale Clock. Thanks for listening
Dale-Time 
AMEN BROTHER. The ratios are all entirely skewed now. I am not volunteering but I would be interested in discussing how such a project could be moved forward. Just please, please be careful of getting someone to do it who has a dog in the hunt.
Dale, you’re spot on and not only do I have ideas on how to construct those reports, I’d be more than happy to participate with a resource to do it. Long overdue…
You may be on to something here partner. At the very least, as a member of your study group, I would be willing to re-calibrate my stats in your concept, and have two sets of data. Might be interesting at our Nashville Study Group
meeting.
great blog Dale! You are spot on that what needs to be done is comparisons in the same situations. This truly gives us a better indication of what is going on in the cremation rates and types of services. I dont think anybody cares about the 10-20 cremation rates places anymore- its not reality, but so many pundits focus on these rates and tell us all is well. It time to cut the crap and focus on what is going on. Thanks for doing that!
There’s no question we need better models of our industry. As the cremation rate accelerates, and death rates remain flat or depressed, we need to get a better grip on the financial curve we have to ride out in the years ahead.
Here in the NE I can see it in the eyes of the casket reps. They are worried and frustrated. They keep trying to figure out how to hold onto what they can. But at the same time, funeral homes are running out of money, receivables (and bad receivables) are up, etc. etc. It is just a matter of time before we see a significant consolidation in our area.
It is on the whole a great contraction not unlike the austerity policies which have been pushed onto governments like Spain in Europe–very painful and difficult to endure. Except that it is a large scale shift in consumer preference which has set off our austerity plan rather than some sort of external mandate. But just like governmental deflation, we have families returning to us and choosing services that tend to cost them 20% to 50% less than the last time they called for our services. This has to undermine profitability.
There is an overall shrinkage of revenues and by extension profits in funeral service. The hard part is estimating the scale of the shrinkage and how this impacts communities of various sizes. It is fair to say though that many small towns across the country will no longer be able to support the services of a full time funeral director (or any kind of funeral home for that matter) and that in order to maintain even a modest amount of profitability, fewer funeral homes with greater volume will be required.
For instance, my home office is one of 16 facilities (from SCI locations down to sole proprietors) serving a population of 175,000 people. In an era of 60% cremation or more, that can’t stand.
We will get through this, but the industry will look very different without casket companies leading the way. Efficiency is the most important order of the day, with well designed information technologies at the top of my wish list. But so far I haven’t seen a system designer with the talent and the understanding to really give us what we need.
Lots to figure out.
BT Hathaway