Preneeds: What’s your approach to closing these critically beneficial contracts?

Are you implementing a complex in-house sales campaign?
Do you contract out with a third-party provider to generate preneed sales?
Or—as is the case with several funeral home owners we’ve spoken with the past couple of years—do you just sit back and hope for the best?

Hopefully you’re having some luck with options one or two, because as you’ve undoubtedly noticed, option three doesn’t get the job done.

Sure, you might snag a few contracts from family members here and there, but that’s not a recipe for continued success.

With preneed sales being so important to your funeral home’s future—especially in these uncertain times, with direct cremation disrupting the landscape for at-need cases—you need to create a dedicated plan for growing preneed sales.

The plan needs to comprise the process of:
1) identifying potential preneed clientele
2) nurturing those leads until they’re ready to act
3) closing the sale
Now, a funeral home owner who puts any effort into growing preneeds is undoubtedly familiar with the first and third steps there—at least the basics of them.

Most target family members and friends/associates of a recent decedent as potential leads. And a hardworking salesperson knows just how to get that signature on the contract.

But step two? That’s where the ball gets dropped all the time.

It’s as simple as this: The vast majority of leads aren’t ready to commit to a prearrangement right from the start. In sales vernacular, they’re cold. And that’s the best-case scenario. Many of them are ice cold.

They might be vaguely aware of the benefits of preplanning, but they’re vaguely aware of the benefits of lots of things: walking for at least a half-hour every day, getting eight hours of sleep, saving at least 20 percent of every paycheck. That doesn’t mean they’ll commit to any of those things.

And most people certainly won’t to commit to something as substantial as an advance funeral plan until they’re convinced it’s worth their hard-earned money. It’s your job to do the convincing.

This is where I acknowledge that funeral directors are not necessarily dedicated salespeople. Sure, some are great at sales. They understand that it’s an important aspect of the job. But it’s just that: an aspect.

However, when it comes to preneeds, sales can’t be just a secondary consideration. It’s the whole kit and kaboodle. (And no, I’m still not sure what a kaboodle is. But that’s not important right now.)
When it comes to prearranging, you need to fully adopt a sales mentality. Nurturing leads is one of bedrock concepts in sales, especially when you’re selling something that has a significantly long sales cycle. Which is exactly the case for preneeds.

In Homesteaders Life Company’s most recent edition of its guide to preneed sales, the agency notes that “many consumers need a couple of years after first considering prearrangement before they are ready to complete an advance funeral plan.”

Specifically, of people who had committed to such a plan, 27 percent said at least two years had passed between them first thinking about prearranging and filling out the paperwork.

The time frame was one to two years for another 8 percent, and five months to a year for another 18 percent. Add that up, and a full 53 percent of those surveyed took between five months and two years to finally sign on the dotted line.

Granted, some people make up their minds much faster. A full 19 percent of respondents signed a contract in the first two weeks after considering funeral prearrangement.

So, on average, about 1 out of 5 people decide they shouldn’t wait at all. In sales, those are blazing hot leads. They don’t require nurturing: You just have to get the papers in front of them and genially accept the check.

Those sorts of sales come easily, of course. But for some funeral homes, those are the only contracts they get. They nail down the blazing hot leads, because doing so requires virtually no effort. It’s like being the only open pub in town on St. Patrick’s Day.

But that also means about 80 percent of people who eventually prearranged were not blazing hot leads. The amount of time varied, of course, but over half of them took at least five months to seal the deal, and over a quarter needed over two years.

When you’re dealing with a long sales cycle, you need to nurture those leads. Some will start off ice cold, some cold, some warm, some relatively hot. If you need to grow preneed sales at your funeral home, you—or your preneed sales director, if you’re large enough to have one—need to focus on identifying where each lead is at each step.

Who’s cold? Who’s warm? Who’s hot? How do we move someone from cold to warm, from warm to hot, from hot to signing on the bottom line?

In sales across a variety of industries, it’s common that once you’ve identified a potential group of leads, about 50 percent will never contract with you, no matter what you do. You could have the perfect solutions to that business’s pain points and spend years communicating that fact, but you’re simply never going to close that sale.

About 8 percent will be hot right out of the gate. These are leads you can convert into clientele quickly—which we’ll say is about three months. They’re interested almost immediately, and they don’t need a lot of nurturing.

Removing that 58 percent from the equation (50 percent cold, 8 percent hot), we’re left with 42 percent. We’ll call them warm. That’s where your main focus needs to be. It’s on getting that 42 percent to heat up, over time, and eventually contract with you for an advance funeral plan.

So how do you warm up that 42 percent? One of the most reliable methods is email marketing. The technique has been overlooked lately as fresher, flashier marketing methods have surfaced, but email still works—and it works well.

That’s especially true of the 60-and-over demographic, which remains the core target group for preneed sales campaigns. The Homesteaders study showed that people aged 62-92 comprise 90 percent of all Americans who prearrange.

A successful email campaign educates people of your community in that demographic on the benefits of prearrangement. That’s the nurturing process. You’re not trying to push people into making decisions before they’re ready. You’re letting them know how beneficial preplanning can be, letting them come to that realization in their own time.

Another important technique is retargeting. This digital marketing tool lets your funeral home market prearrangement services to people who have visited your website.

How it works is a bit technical, but the short version is that your digital advertisements will continue to be displayed to these visitors long after they’ve left your site. These ads will show up on many of the websites people visit, sites that are entirely unrelated to death care.

Retargeting campaigns must be carefully managed so people don’t feel like they’re being “stalked” by your ads, which is why responsible, professional marketers are conservative about how frequently ads appear and how long they will continue to display.

Ultimately, the key is to not just ignore the 42 percent of leads who don’t immediately convey an avid interest in signing a prearrangement contract. With a smartly designed process in place, you can generate many more preneed sales; you just need to focus on the nurturing step. FBA

Welton Hong is the founder and marketing director of Ring Ring Marketing (FuneralHomeProfits.com), which specializes in helping funeral homes convert leads from online directly to the phone line. Welton also is a speaker at funeral home conferences and the author of Making Your Phone Ring with Internet Marketing for Funeral Homes. Reach him by email at [email protected] or call toll-free at 888.383-2848.