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Funeral Home Marketing - 5 Strategic
Planning Myths
By John H Callaghan
It's that time of the year again... planning time.
It happens every year. Business slows down around
Thanksgiving and we coast through the Christmas 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 hit January all heck breaks loose as many
funeral home owners suddenly decide that they were not
satisfied with their 2010 numbers and it's time to
develop a new plan.
This year I received the first "I need some strategic
help" email on New Years Day!
Even with the economy picking up a bit, 2010 was still a
rough 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 any money
There is no doubt that the economy has hurt a lot of
families. Rampant unemployment, stock market ups and
downs, and the crash of the housing market have combined
to wipe out the nest egg of many families.
Why is it then that the average amount spent on a
wedding in 2010 an all time high of $27,852? That's a
100% increase since 1990.
Why is it that while Chrysler and GM were in bankruptcy,
the sales of luxury cars like Ferrari and Rolls Royce
were at an all time high?
The reality is that some families do not have money. But
an awful lot of families have plenty of money they
simply don't understand the value of a visitation and
memorial service so they won't spend their money on it.
The point is that designing your business assuming that
no one has any money is a huge mistake. There are still
lots 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 just give it time...the 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 the funeral home market has fundamentally, and
irreversible, changed over the past decade. This change
is primarily driven by the fact that baby boomers are
now making the decisions in the arrangement conference.
The basic nature of a baby boomer is that they always
challenge traditions. They did it in the 1960's, the
1970's and they continue to challenge traditions today.
The fundamental problem is that most baby boomers do not
understand the value of a funeral service. If they do
not understand it....they cannot embrace it....and they
will not spend money on it.
Very few businesses 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 satisfy the
changing needs of our target market.
The first baby boomers just turned 65 and there are 76
million more on their way. It's going to take 20 years
for this wave to pass through the funeral home industry.
You could plan on just giving it some time. But a better
plan may be to figure out how to serve the baby boom
market so that your business survives to see the next
generation.
Myth #3 - I just need to plan my advertising budget
Well you could... but you'll probably end up wasting the
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. Advertising's job is to make your phone ring.
But marketing is focused on the entire revenue
generating process. You don't make money because someone
called your funeral home. You only make money if you
actually serve the family.
I like to start any strategic planning meeting by asking
for the numbers. How many times did the phone ring? How
many of those became a call for your firm? How many of
those choose to have a visitation 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.
Rather than planning your advertising budget you really
need to plan every step in your marketing process and
then determine what budget you need to support the
entire process.
Making your phone ring is a nice first step... but it's
not going to pay your mortgage.
Myth #4 - All I have to do is copy the industry leaders
Every industry has their leaders. In the funeral home
market there are a handful of very successful private
firms that serve 1,500 to 2,000 or more families every
year and operate a highly respected and profitable
business.
As the recognized funeral home market leaders, these
firms are studied carefully by the rest of the industry.
Every move they make gets copied dozens or hundreds of
times all over the country.
There's one 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 being
homogenous. Granted 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 death experience.
Direct cremation rates vary from state to state. But
they also vary from city to city and even neighborhood
to neighborhood (especially when you factor in the
preferences of different ethic groups).
Copying the leaders in the industry will only work if
their market and your market are identical. Otherwise,
it's a recipe for disaster.
The leaders are successful because they developed and
implemented a strategic plan that was specifically
designed for their local market. It may be an excellent
plan but it will still have be customized in order to be
successful in your market.
Myth #5 - Strategic planning can only be done at a
resort
Why do the well-established funeral home marketing firms
only make matters worse by encouraging their clients
(i.e., you) to combine their strategic planning with a
vacation?
Don't get me wrong, I LOVE a good vacation. I also like
it when I can make a portion of it tax deductible by
combining it with an educational event (that's not tax
advice please consult your cpa).
Learn a little in the morning, join the family on the
ski slopes in the afternoon... it's not a bad way to
spend a few days. The problem is that 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 outside facilitator. When owners try to do
this by themselves, or with their management team, they
always get bogged down on the details of one
controversial topic and never complete the planning
process.
The second important element is that the facilitator
needs to have a game plan or agenda for developing 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
have to define a marketing message and implementation
strategy that will attract the right kind of families to
your funeral home. Without a game plan for the meetings
you may have some good ideas but you will 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 interruptions in order to develop a new
strategic vision and a plan for getting you there. As
Michael Gerber says in his book The E-Myth it's time to
work "on your business" instead of "in your business".
The vast majority of funeral home owners I have met are
consumed working in their business; meeting families,
conducting services and managing 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 isn't something you
do every day, it is going to requires a focused effort.
When I'm working one on one with a client, I will
typically suggest that we hold a two day planning
session off site at a nearby hotel or conference center.
The goal is to get you away from your funeral home so
that you can focus on the planning process rather than
being distracted every time you hear the phone ring. I
like to take a tour of your funeral home so that I get a
better sense for 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 simply does not work. The participants
all start out with the best intentions but by mid
afternoon they're thinking about what their family is
doing outside of the room and planning their evening.
You can take your facilitator to the resort with you, he
or she can bring their proven process with them, but
expecting your management team to focus for two straight
days in that environment is unrealistic.
To recap... the five big myths of creating a strategic
plan for your funeral home are...
Myth #1 - Families don't have any money
Myth #2 - If I just give it time...the business will
come back
Myth #3 - I just need to plan my advertising budget
Myth #4 - All I have to do is copy the industry leaders
Myth #5 - Strategic planning can only be done at a
resort
Your mission is to serve families at their time of need.
Yet you cannot do that if you are 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 "on your business" instead of "in your business".
John Callaghan
Marketing Consultant
http://www.funeralsuccess.com |
