Funeral Home Marketing – 5 Strategic Planning Myths

It’s that time of year again… planning time.

It happens every year. Business slows down around Thanksgiving and we get past the holiday season. I like that predictable cycle because it gives me a chance to focus on my family and the spirit of the season.

As soon as we get to January, everything breaks loose, as many funeral home owners suddenly decide that they weren’t satisfied with their 2010 numbers and that it’s time to develop a new plan.

This year I received my first “I Need Strategic Help” email on New Year’s Day!

Even with the economic recovery, 2010 was a difficult year for most funeral home owners. If their call volume was good, the margins were still smaller than they wanted and the bottom line suffered.

It’s pretty obvious… it’s time for a new plan.

In this article I am going to describe 5 strategic planning myths that are common among funeral home owners and managers.

Myth #1 – Families don’t have money

There is no question that the economy has hurt many families. Rampant unemployment, stock market ups and downs, and the housing market crash have combined to wipe out the savings of many families.

Why then did the average amount spent on a wedding in 2010 reach an all-time high of $27,852? That’s a 100% increase since 1990.

Why, while Chrysler and GM were bankrupt, were sales of luxury cars like Ferrari and Rolls Royce at an all-time high?

The reality is that some families do not have money. But many families have a lot of money and just don’t understand the value of a wake and memorial service, so they won’t spend their money on it.

The point is that designing your business assuming that no one has money is a big mistake. There are still a lot of people with money, and one of the goals of strategic planning is to figure out how to attract as many of those people as possible to your funeral home.

Myth #2: If I Give It Time…Business Will Come Back

This is sometimes called the ostrich approach to business management… stick your head in the sand and hope the problem goes away.

I believe that the funeral home market has changed fundamentally and irreversibly over the last decade. This change is mainly due to the fact that baby boomers now call the shots at the settlement conference.

The basic nature of a baby boomer is that they always defy traditions. They did it in the 1960s, 1970s and continue to defy traditions today.

The fundamental problem is that most baby boomers do not understand the value of a funeral service. If they don’t understand it… they can’t accept it… and they won’t spend money on it.

Very few companies have the power to dictate the direction of the market (Apple is one of the rare exceptions these days). The rest of us have no choice but to constantly reinvent ourselves to meet the changing needs of our target market.

The first baby boomers just turned 65, and there are 76 million more on the way. It will take 20 years for this wave to pass through the funeral industry.

You could plan to just give it some time. But a better plan may be to figure out how to serve the baby boomer generation market so that your business survives and sees the next generation.

Myth #3: I just need to plan my ad budget

Well, you could… but you’ll probably end up wasting your money.

Many business owners think that marketing and advertising are the same thing. That couldn’t be further from the truth.

Advertising is a small subset of the overall marketing process. The job of advertising is to make your phone ring. But marketing focuses on the entire process of generating income. You don’t make money because someone called your funeral home. You only make money if you really serve the family.

I like to start any strategic planning meeting by asking about the numbers. How many times did the phone ring? How many of those turned into a call for your company? How many of them choose to have a wake and/or memorial service? How many of those families referred others to your funeral home?

Studying these numbers tells you where the biggest problem exists.

Instead of planning your advertising budget, you really need to plan each step in your marketing process, and then determine what budget you need to support the entire process.

Making your phone ring is a good first step… but it won’t pay your mortgage.

Myth #4 – All I have to do is copy industry leaders

Every industry has its leaders. In the funeral home market there are a handful of very successful private companies that serve 1,500 to 2,000 or more families each year and operate a highly respected and profitable business.

As recognized leaders in the funeral home market, these companies are closely scrutinized by the rest of the industry. Every move they make is copied dozens or hundreds of times across the country.

There is a critical flaw in this process… what works in St Petersburg Florida may not work in Racine Wisconsin. And what works in Columbus Ohio probably won’t work in Portland Oregon.

We like to think of ourselves as a melting pot society, but the reality is that we are far from homogeneous. It is true that there are many similarities, but there are also many significant differences. This is especially true when it comes to how a family deals with the experience of death.

Direct cremation rates vary from state to state. But they also vary from one city to another and even from one neighborhood to another (especially when the preferences of different ethnic groups are taken into account).

Copying industry leaders will only work if their market and yours are identical. Otherwise, it’s a recipe for disaster.

Leaders succeed because they have developed and implemented a strategic plan designed specifically for their local market. It can be a great plan, but it will still need to be customized to be successful in your market.

Myth #5: Strategic planning can only be done at a resort

Why do well-established funeral home marketing firms only make things worse by encouraging their clients (ie, you) to combine their strategic planning with a vacation?

Don’t get me wrong, I LOVE a good vacation. I also like when I can make a portion of it tax deductible by combining it with an educational event (that’s not tax advice, consult your CPA).

Learn a little in the morning, join the family on the slopes in the afternoon…not a bad way to spend a few days. The problem is, this is a horrible way to do strategic planning!

An effective strategic planning session requires three important elements.

First, it is always best to do your planning with the help of an external facilitator. When owners try to do this alone or with their management team, they always get bogged down in the details of a controversial issue and never complete the planning process.

The second important element is that the facilitator needs to have a game plan or agenda to develop the strategic plan. Creating a plan is a step-by-step process of defining your target market, analyzing this market, and designing your business model to deliver value to that market at a reasonable profit. Next, you need to define a marketing message and implementation strategy that will attract the right kinds of families to your funeral home. Without a meeting game plan, you may have some great ideas, but you’ll never end up with a complete strategic plan.

The third element of a successful planning session is that the participants must be able to focus.

You absolutely MUST be able to focus on your business without interruption to develop a new strategic vision and plan to get you there. As Michael Gerber says in his book The E-Myth, it’s time to work “in your business” instead of “in your business.”

The vast majority of funeral home owners I have met are consumed with working at their business; meet families, perform services, and manage staff.

Creating a strategic plan requires you to work on your business; studying your market, designing your message and defining exactly how you will deliver something of value to your customers. Since this is not something you do every day, it will require a concentrated effort.

When I’m working one-on-one with a client, I typically suggest we hold a two-day off-site planning session at a nearby hotel or conference center. The goal is to get you away from the funeral home so you can focus on the planning process instead of getting distracted every time you hear the phone. I like to tour your funeral home to get a better idea of ​​your business, but we should only hold the meeting there if you have a truly private area where you won’t hear the phones.

I have facilitated strategic planning sessions at resorts and it just doesn’t work. All the participants start with the best intentions, but by mid-afternoon they are thinking about what their family is doing outside the room and planning the evening.

You can bring your facilitator to the resort with you, he or she can bring your proven process with them, but expecting your management team to focus two days straight in that environment is unrealistic.

In Summary… The Big Five Myths of Creating a Strategic Plan for Your Funeral Home Are…

Myth #1 – Families don’t have money

Myth #2: If I Give It Time…Business Will Come Back

Myth #3: I just need to plan my ad budget

Myth #4 – All I have to do is copy industry leaders

Myth #5: Strategic planning can only be done at a resort

Their mission is to serve families in their time of need. However, you can’t do that if you’re no longer in business.

I encourage you to develop a new strategic plan for your funeral home business as soon as possible. It’s time to work “in your business” instead of “in your business.”