People working in the funeral home industry have noticed record revenues for the last couple of years, with $14B recorded back in 2017. Truth be told, cremation is slowly winning popularity, and it’s expected to impact the funeral industry in the next years even more considerably.
- 1 Is cremation impacting the funeral service industry?
- 2 5 tips for developing a successful funeral home business
- 2.1 1. Work on cost control for projecting and controlling your profit
- 2.2 2. Create a niche in the business for reaching to targeted customers
- 2.3 3. Develop and maintain a positive reputation within the community
- 2.4 4. Always follow the regulations and government mandates
- 2.5 5. Use marketing strategies to communicate with the community and get to new customers
- 3 One last thought
Is cremation impacting the funeral service industry?
With cultural traditions knowing less and less restriction, cremation may become one of the most popular choices in years to come. Even if many religions have discouraged cremations, Americans are becoming less interested in religious. It’s why cremation has become so popular. For instance, back in 2015, 48.5% of deceased people were cremated.
In all fairness, cremation isn’t as expensive as traditional funeral services and burials. It’s easy to make right after death, so there are no worries related to preserving or transporting the body. These services are commonly offered by the funeral home, lowering the revenue for every customer.
It may come as a shock for the Baby Boomer generation, but as they will age, the death rate will keep in rising, which is why people in the industry expect the demand to stabilize. It’s quite common for the senior population (the primary market for the funeral homes) to choose traditional memorials and burial services, which only imply more stuff. It makes sense that the funeral services are pricier than cremations. It’s essential for funeral homes that still don’t provide cremation within their services, especially for those who are only focusing on traditional services.
The evolution of services is undeniable, especially when we talk about cremation, and there are plenty of aspects affecting the revenue of funeral homes. The affordability and reliability of e-commerce shopping is an essential factor that lowers the income caused by merchandise sales.
Funeral homes and staff don’t just coordinate memorials, but also offer merchandise to customers. They can provide cards, memorial registry gifts, urns, caskets, burial vaults, and floral arrangements. Most of the time, it’s the casket raising the final price of the funeral service, with models costing as much as a couple of thousands of dollars. But that’s not always the case, their plenty of websites that offer a great price for caskets, deliver between 24-48 hours anywhere in the US and plenty of other services that will help you save some money. Such a website can be checked here.
Luckily for the customers, e-commerce shopping gives the customers the possibility of buying caskets online for better prices. It’s one of the main reasons for which funeral homes cannot rely on constant product sales anymore.
Let’s not forget to remind you that funeral homes have to take caskets bought through e-commerce and third-party sources. They cannot oblige you to buy their caskets, which is why they cannot control the revenue very well.
It’s expected for the cremation to affect the industry growth and profitability in the future, with e-commerce shopping becoming more and more reliable for the consumers. However, the demand for funeral home services isn’t going to change within the continually growing senior population. The opportunities in the industry aren’t going to disappear, for sure.
5 tips for developing a successful funeral home business
Even if cremation and green burials may impact the funeral home business, which is why you should give the following tips a read:
1. Work on cost control for projecting and controlling your profit
The primary spending of funeral homes comes from the labor and bought merchandiser for the customer, with the caskets being the most important to name. The employees, with morticians and funeral directors, included needing appropriate training, which is why the payments have to be attractive.
All aspects depend on the industry, covering almost 25% of spend. It’s essential to keep the costs under control.
Even if there is no specific government assistance for the industry, the Funeral Consumers Alliances and various industry organizations can provide you the help you need.
2. Create a niche in the business for reaching to targeted customers
When you’re able to offer particular services, such as those with ethnic or religious elements, you’re going to be able to stand out in the industry. Customers that find the right business for their particular wants and needs will stick with the company. Once again, we should note that funeral homes that also provide cremation services will have a better chance than the businesses that don’t. People choosing cremation more frequent isn’t going to change soon.
You may sell products through multiple establishments so that you can handle and reduce online shopping. E-commerce shopping is affecting the funeral home’s revenue as we speak, but selling products in high-traffic regions can increase sales.
3. Develop and maintain a positive reputation within the community
Since the majority of funeral homes are small and servicing a 10-15miles radius, it’s obvious why the success depends a lot on the status inside the town. It may come shocking to you, but there’s little actual competition within the funeral home industry. Nevertheless, it’s fundamental that you make sure that all of your customers are happy with your services, recommending you to family and friends.
4. Always follow the regulations and government mandates
Even if there are a couple of difficulties when entering the business and only some technological progress in the last years, the funeral industry is running according to federal regulation, requiring particular licensing for the employees. The Federal Trade Commission asks the funeral homes to provide complete visibility and exact price lists to the consumers. Moreover, the Federal Truth-in-Lending Act and Regulation Z note that amounts and finances change should be provided to the customers.
Along with the financial and customer-facing policies, some environmental regulations about the emissions caused by cremation and the harsh materials present in the establishments are stated. Clear Air Act states that the emissions caused by funeral homes have to be maintained under control in terms of impact on the environment.
5. Use marketing strategies to communicate with the community and get to new customers
Funeral homes did manage to develop new marketing methods to communicate better with the community and to reach new consumers. It’s what helps them face the constantly changing marketplace. They invest in marketing a lot more, using both direct mailing and advertising as primary methods.
One last thought
For the short-term future, we’re expecting the cremation to affect the revenue for funeral homes, which is why the business has to change the tactics and services for satisfying the clients. The sooner you realize the effect of e-commerce shopping and product sales, the easier it is young to be for you to increase the product sales. In the long term, funeral homes will have to provide specialized services so that they remain the leading player within the industry.