The funeral home and cemetery industry is changing, which means new opportunities and challenges for funeral business owners. Specifically, a new generation of consumers and an increasing cremation rate means owners need to look for ways to adapt to the evolving industry. To get ahead of the trends, a strategic business approach can make all the difference. Here’s how to develop yours.
The millennial generation will soon be your customers.
More millennials are purchasing services from funeral homes and cemeteries, so it’s important to understand their preferences and buying behaviors. In the past, funeral business owners were able to adopt the business practices of the generations before them, focusing on each family who walked in the door and integrating themselves into the community to ensure business success. For generations, being personable and family-focused were enough to give customers a satisfying experience in the decision-making process. While these practices are still important to the success of the funeral home or cemetery, the millennial generation of consumers presents new demands with a wider range of values and preferences for a funeral service than the generations that preceded them.
First, millennial customers are more conscious of the value they will receive and how much they are willing to spend. In short, these customers want to receive the highest value possible for what they spend. For funeral business owners looking to expand or for those looking to purchase a funeral home for the first time, understanding the purchasing behaviors of this emerging customer base must inform your business strategy.
For example, in 2015, two business partners were looking to expand and renovate a new funeral home space. With millennials in mind, they created a modern and inviting funeral home experience, incorporating new technology and software that offered families an easier planning process and increased service options. Younger generations in particular appreciate the value and convenience that technology provides and the price flexibility afforded by new service options. The owners’ innovation and understanding of what customers wanted proved worthwhile, and they continue to serve the community with a successful business.
As in this example, funeral home directors and cemeterians should consider how to add more transparency, convenience and flexibility to their offerings. This will ensure millennial customers feel confident in the services they purchase and that all customers will have the ability to plan the service that meets their needs.
The cremation rate is increasing.
Individuals are increasingly turning to cremation as a viable alternative to traditional burial. When strategizing for a business plan, current and future funeral business owners must account for the rising cremation rate and expand their cremation services accordingly to accommodate the growing demand.
However, this does not mean cremation is the only option that your customer base will want. Funeral directors and cemeterians should effectively communicate and educate customers on the various memorialization options, such as understanding that a memorial service does not need to end with the cremation. One way to do this is by exploring more event-based opportunities. For instance, customers increasingly care more about hosting a celebration of life, so funeral businesses may look to bring in catering or greeters to help guests feel more comfortable and welcome while they honor a loved one. These services can be offered regardless of whether or not the customer selects cremation.
Build a creative, adaptable business strategy.
A smart and strategic business model can make all the difference when faced with the current funeral service trends. To adapt to the changing landscape and position your business for success, education is key. Few customers who walk in the door are aware of the wide range of options available to them in planning a meaningful memorial service. It’s the role of the funeral director to make sure families are aware of their options in order to make a well-informed decision. Bringing creativity to memorialization, with offerings such as a chapel service or reception, can help make a service more memorable.
Your business plan should guide long-term goals as well as the day-to-day operations, making it important to have a plan that aligns with the industry. It should include major considerations for the future of your business, including the market analysis, business description, management structure, financial projections and more. Putting these ideas in writing will give you a comprehensive understanding of the industry and business while setting the funeral home or cemetery on a course for success.
Choose a knowledgeable banking partner.
To guide funeral home and cemetery owners through the financial trends in the funeral industry, find a banking partner who knows the funeral business inside and out with decades of experience . Banks that look at the character and business background of the owner and the background behind the business are best able to lead you through the entire process. A knowledgeable banking partner will walk hand-in-hand with you from the early stages of understanding the opportunities and challenges in the funeral industry to completing a cash flow analysis and framing the business plan for success. FBA
Tim Bridgers joined Live Oak Bank in 2014 with more than 10 years of valuable business and entrepreneurial experience. Tim studied mechanical engineering at the University of North Carolina at Charlotte, business at the University of North Carolina at Wilmington and completed his finance degree at Liberty University. This diverse education prepared Bridgers for success in sales, marketing and management. Tim is a former business owner and developer of two successful companies, and he understands the challenges business owners face. He is dedicated to assisting small business owners in the funeral industry become and remain successful with Live Oak’s products and services. Tim can be reached at [email protected]