“Only by studying how perceptions are formed in the mind and focusing your marketing programs
on those perceptions can you overcome your basically incorrect marketing instincts.”
– Al Ries and Jack Trout, The 22 Immutable Laws of Marketing.
Guided by nationwide consumer research over many years, Starmark Cremation Product’s design team continuously focuses on improving cremation product and revenue results for funeral directors. If funeral directors cannot thrive in the USA with the rate of cremation over 75%, then Starmark and many other suppliers may not survive either. So we at Starmark have a keen interest in mutual success.
There is a common and pervasive misperception in the funeral industry that is routinely perpetuated by large casket manufacturers, distributors and sales people. We are told that funeral directors, with the aid of just the right training and key words, can move a family up from a cremation service priced at the lowest level to a cremation service priced very much like a burial service. Evidence shows this perception is not universally true.
We cannot say it strongly enough… this perception is not true! Families cannot be sold up from a lowest level cremation service to a cremation priced similarly to a burial service simply by means of correct training or key words. After completing over 24 nationwide cremation consumer surveys over the past 15 years, the results prove that most cremation families do not think a container for the body is required for cremation. Many cremation families believe the body is simply cremated without considering issues related to body handling such as storage, transportation, safely loading the retort, durable leak-resistant containers, and positive identification. Most also have no definite plans for an ash urn or its final disposition. Even though we are told by large casket manufacturers/distributors that consumers should be shown a cremation selection room and/or photo display that include only crematable caskets, evidence illustrates that cremation choosing families are almost always repelled by this practice. As a rule, families believe a casket is generally only required for a burial and not at all for a cremation.
What is the new reality now? In they year 2019, there will be approximately 1,500,000 bodies cremated in the USA. Of these cremations, our research indicates that approximately 80% will be direct (low revenue) cremations. Thankfully, our research also indicates that approximately 40% (about 480,000) of these direct cremation families will host a memorial service offered by funeral directors or arranged on their own. Approximately 6.6% of all cremations (about 100,000) will include the use of a metal or wood ceremonial rental casket. The research also shows that the percentage of services including ceremonial rental caskets is much higher when they are modestly priced especially when merchandised with more than one selection available. Finally, our research also shows that about 200,000 cremations include some type of modestly upgraded viewing container such as a cloth-covered casket, slumber bed, shroud or an alternative product such as a Coverlet, Transporter, or Harmony. Very few solid hardwood caskets are used for cremation. When comparing revenues generated by any of the above “witnessed” cremations, in almost all cases the approximate 100,000 ceremonial rental caskets used produce significantly higher net revenue and profit per use. Ceremonial rental caskets are also shown to better satisfy full service family viewing expectations over any of the other options and can restore net revenue to near that of a burial service.
Research demonstrates the changes a funeral home can make to its two cremation offering categories in order to dramatically improve its funeral home cremation revenue. The first and largest category (80% of all USA cremations, or 1.2 million in 2019) include all products in the ‘Basic’ Cremation category, which may include some kind of upgraded service level and prices for any basic cremations. These upgrades include private next of kin/family time with the deceased that also provide for viewing, witnessing and positive identification improving the opportunity to market any number of memorial service offerings. The second category (20% or 300,000 cremations in 2019) include all modestly priced ceremonial rental caskets allowing for any level of viewing up to a full service with the body present.
Research proves that with cremation the perception of good, better and best is viewed by families much differently than with burial caskets. Therefore, for any Basic Cremation offering as previously mentioned, consider offering families any basic viewing/identification/witnessing container as the “good” selection, a ceremonial rental casket as the “better” selection, and a hardwood casket as the ‘best’ selection.
While this information will seem quite radical to many, Starmark assures the industry that these facts are based on national sales data confirmed with numerous nationwide cremation consumer surveys and combined with nearly three decades of trial and error on product developments. Some solutions worked and continue to work very well even while many others flopped. The best evidence of new products working is when sales match up closely to the earlier market research. The biggest winners include low cost cremation boxes, Transporters, Coverlets and the new Preview (a reusable alternative cremation container viewer for positive identification) and lower priced ceremonial rental caskets. Losers include numerous casket-like products priced too highly above any of the products recommended above for the Basic Cremation category. These mushy middle “almost a real casket” products include most cloth covered, hardboard and paper foiled veneer cremation caskets. The losers do little to nothing to improve basic cremation revenue at the bottom end and produce lower net product profit margins with full services. Another common complaint by funeral directors is that families are selecting these often lower priced mushy middle products for burial.
We illustrate the revenue potential between the use of a Basic viewing or witnessing service container as opposed to a ceremonial rental casket as follows. Assume the funeral home invests $1,500 for a ceremonial rental casket and uses it 20 times. If a funeral home purchases a cloth covered cremation casket for $400 and sells it to families at $800, its net product profit margin would be $400. However, if the same funeral home offers the use of a ceremonial rental casket for services for the same $800 (a price consumer research finds reasonable) and the replacement insert costs $150 then its net product profit margin is now at least $650. But it gets better. Research proves that families will choose the ceremonial rental casket over the cloth covered casket (and less often buy down when not given the choice of a ceremonial rental casket in the first place). And best of all, the ceremonial rental casket will be much more acceptable for full services open to the public so opening the door for the family to choose more. Both families and funeral directors win with a ceremonial rental casket. And finally, as a bonus, there is always a good profit with the final sale of the ceremonial rental casket.
But what does modestly pricing your ceremonial rental caskets mean? It means not mistakenly pricing any ceremonial rental casket too high.
To improve full service cremation revenue it is more about generating higher volumes of full service revenues than it is about ceremonial rental casket revenues. Our surveys clearly indicate lower prices for the temporary use of a ceremonial rental casket to families will generate higher volumes of full services and associated revenues. Perhaps this is a difficult pill to swallow for casket-minded folks to wrap their heads around but think of the last time you may have rented a car. What did it cost to use a car for a few days? It was not likely anything close to the $1,000 or more that many funeral homes charge for the use of a ceremonial rental casket. Some funeral directors indicate they charge a high price for the ceremonial rental casket because it is occasionally transferred to a local church where the possibility of damage is increased. Better to simply charge less for the ceremonial rental casket and use it more frequently and then also charge extra to relocate the casket to a church or other location. Starmark’s nationwide cremation consumer surveys clearly indicate that the lower the price used for ceremonial rental casket, the higher the frequency of families selecting full services. We can keep in mind that full service fees generate much higher profit margins than an over-priced and therefore infrequently selected ceremonial rental casket.
In addition to offering a selection of good , better and best cremation containers/caskets, funeral homes will do even better to satisfy families and boost revenue by offering a good, better and best selection of basic cremation packages and a good, better and best selection of full service packages. Three offerings for each is proven to work: three basic viewing/witnessing/identification containers for the basic or ”good” cremation offering (such as the Preview, Coverlet and Transporter), and three full service packages for the better and best offerings (one value priced ‘good’ poplar hardwood ceremonial rental casket, one ‘better’ oak hardwood ceremonial rental casket, and one ‘best’ any cremation friendly wood casket). If on the other hand a funeral home only offers one selection of ceremonial rental caskets then it ought to offer two cremation friendly hardwood caskets higher than the ceremonial rental casket and likewise if it offers a selection of two or more ceremonial rental caskets then it ought to also offer one cremation friendly hardwood priced above them. Also keep in mind that most burial hardwood caskets also marketed to work for cremation ought to include a wooden bed platform so as to cremate safely. The great news is that many families when offered any selection of three products or services will most often select the middle or “better” choices (the middle choice usually the more comfortable choice than the top or bottom).
We love funeral service and want to do all we can to help funeral directors thrive. Starmark Cremation Products will continue to invest in research and development in order to design and make great cremation products with the mission to help funeral directors succeed and better serve cremation choosing families. FBA
Arie Elder, Starmark Cremation Products
Arie K. Elder / Arie is a Sales and Marketing Manager for Starmark Cremation Products and can be reached at (888) 366-7335 extension 217 or [email protected]