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Archive for February, 2016

The New Normal

Every year the funeral trade magazines post numerous articles written by a handful of funeral home financial and marketing consultants like David Nixon, Dan Isard, Alan Creedy, Glen Gould and Bill McQueen just to name a few of the better known. They have provided the funeral home owners with vast amounts of great information through the years about sales averages, how to set up budgets, break-even analysis calculators and the like. We look to these folks to help us figure out what the future might look like and give us some “Normal” numbers to compare our numbers to. They have access to what people are doing around the country that most funeral home owners don’t have access to and we have come to depend on them to give us a “pulse” of what’s happening.

Over the last ten years the funeral business has been changing so much that I don’t believe that we can say what is “normal” any more. Thirty years ago when the cremation rate was below 20% all over the country and most funeral homes provided the same type of service and merchandise to nearly every family they served it was pretty easy to say what was normal and average. But now with new low cost cremation providers, online funeral arrangements sites, and competition from hotels and reception facilities taking a larger piece of the pie every year what’s normal for me may not be normal for someone else.

I think it’s time for all of these consultants to go back to the drawing board, put their thinking caps on and come up with some New Normals for us to compare things to. They need to realize that there are now multiple sets of normal numbers depending on cremation rate, market population, religious and ethnic background, and the number and type of competitors in your market. There is no “one size fits all” any more.

What is normal for a town of 50,000 people with 50% cremation, 3 traditional funeral homes, 2 low cost cremation providers and a large population of church members?

What is normal for a college town of 120,000 with 65% cremation, 2 corporate funerals home/cemetery combos, 3 independent funeral homes and 4 low cost providers and 2 online arrangement providers?

What is normal for a 600,000 population big city with Ethnic firms and Religious firms and corporate firms and independent firms of all shapes and sizes? How many low cost providers can exist in a town like that? Do Online arrangements sites really work or are they just the latest thing the vendors are trying to convince us all we need.

The places in the country that have been dealing with 70% cremation for a long time are the folks the rest of the country should be hearing from and learning from. What is their reality? What kind of average sale do they have? How are they surviving and thriving? What did they do when their call volume remained the same but their annual revenue dropped by 25% because people were choosing less expensive options? I’m guessing that over 50% of the funeral homes around the country saw their average income per call decrease last year (that’s all calls, cremation and burial calls, combined). SCI just reported that their average income per call dropped last year.

With all due respect to the folks in the middle of the country who are still doing 80% burial or big city ethnic firms where people drop $15,000 regularly on a funeral, I don’t even want to talk to them.  They are not in the same business as me. And I’m not so sure the start-up guys in the big cities that are carving out a “hip and new” niche market for themselves can really relate to what it’s like in a market with a steady population and a blue collar income where people are just trying to get by. There are only so many deaths in most markets and only so many dollars that people have to spend.

So…. All of you Mr. Smarty Pants people out there what is the new normal???

I’m Dale Clock.  Thanks for listening.

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