Funeral Industry 2014 in the Rear View Mirror; 2015 in the Windshield
Article by Jeff Harbeson, The Funeral Commander
There are all sorts of “Auld Lang Syne” and “Resolutions for 2015″ posts going around, so as my first Funeral Commander post of the year, I thought I would recap some of the top 2014 funeral industry stories and offer predictions for 2015. Fortunately I have many contacts with funeral industry publication and news providers so I contacted them for their opinions on the top stories. Interestingly, we were all pretty much in agreement. Sadly, I read Connecting Directors Top 20 Most Read Funeral Articles and did a little “social media research.” The gulf between relevant news vs. “bubble gum for the brain” stuff relating to funeral content which many find important is truly a pitiful testament to the profession.
<Drum roll please> The overwhelming #1 funeral industry news story in 2014 according to all my sources was the $18.75 million litigation settlement Batesville paid to Matthews. What many found interesting was the lack of detail surrounding the settlement other than perfunctory press releases by both entities…most astounding was the Batesville statement and I quote “After 4 years, this case ends with no finding or admission of liability or wrongdoing, and we are free to continue to serve the funeral professionals in the New York metro area as we have been doing.” Really? Batesville paid nearly $19 million for doing nothing wrong and back to “business as usual?” Well its quite a tale of legal wrangling, conniving, mystery and intrigue including a code name “Capri Tactical Plan” (the court documents are readily available online with a simple Google search, quite an interesting read especially the internal emails). All agreed it’s curious that a public company has such a payout and nothing changes, no one fired or held accountable. One has to wonder, how much would it cost to make significant changes or accountability? True to form, the “spin” and information was kept to a minimum as not to reveal all the nasty goings on over contracts and such…so their reputation lives on: “let’s treat ‘em like mushrooms; keep ‘em in the dark and feed ‘em crap.”
The consensus for the #2 story is the closing merger of SCI and Stewart Enterprises. As witnessed in other industries like the airlines (American and US Air merger), long term stability and growth is strengthened in numbers. Consolidating processes, bulk purchasing and aggressive market share acquisition makes sense to financial analysts. I have the occasion to converse with regional consolidators and privately held funeral groups that are equally in the growth and acquisition mode. One must ponder the future of those that do not somehow affiliate themselves for the benefits well defined by other industries or continue the “we’ve always done it this way” and “we’ve been serving since Cornwallis gave up” path…time will tell.
I give #3 to the demise of Genesis Casket Company. This particular even was bad news for the funeral industry because it brings to light there is not enough burials currently or even forecast in the future for a new American company to enter the marketplace. Basically, cremation is going to eclipse burials in the US and reducing the need for any additional production capacity for caskets…a stalwart revenue source for funeral homes. For more, take a look at the post The Orchestra is Lovely on my thoughts there.
The story from the lawsuit in Pennsylvania to change the ridiculous over reach protectionist, anti-competitive laws restricting who can own funeral homes, what they can be called, whether they can serve food etc. lines up at the #4 story of the year. According to the Institute of Justice Attorney Dan Alban: “Today’s court decision completely ignored evidence that Pennsylvania’s funeral regulations do nothing to advance the public health and did little more than rubber stamp an irrational, protectionist law.” Call it what you may, this is a glaring example of much needed reform of archaic regulations only to protect the “good ole boy” network…but look at story #2; time will tell. Online cremation services have already started to creep in the backward funeral market of Pennsylvania.
There are a myriad of other stories such as the Ebola scare, the 25% of funeral homes fined in the undercover investigation by the FTC for Funeral Rule violations, and the much ignored by our industry growing population of “funeral poor” which were headlines in 2014.
But 2014 is now in the rear view mirror and 2015 is before us in the windshield. Here are some predictions for the road ahead:
- Cremation will continue to rise at a rapid rate which applies additional pressure to traditional funeral service provider revenues.
- Consumers will continue to educate themselves about the funeral business online and will make choices (just like any other consumer choice) based on their research from their screen.
- Funeral service providers that offer complete and transparent information online (including pricing, remember only 9% of US firms have their prices online) will reap benefits.
- Social media use by funeral homes will continue to emerge as the preferred communication to consumers. Of course as usual, there will be few adopters because the tried and true “Lions Club attending, calendar giving, diner place-mat advertising” crowd knows better…just look at their website (oh sorry, if you want more information you have to go to their location).
- New funeral service provider models will continue to evolve and flourish such as Distinctive Life, Triad Cremation Society & Chapel, Family Choice Funerals & Cremations and Smart Cremation. These new brands are moving market-share and consumers are gravitating to their offerings.
- Speaking of new models, casket companies will continue to produce their “newest and best casket” that will “families will love” with superfluous features adorned in their continued failing attempt to “turn the market around” in their corporate favor. The continued arrogance of some blinds their ability to flourish and at some point, if your company has not sold 1 more casket than the year before 10 years, maybe you’re not doing something right. Keep an eye on Aurora’s BeRemembered offering as they seem to be the only one not tone deaf to the needs of consumers and fresh ideas from a casket company…a bright spot in a cloudy bunch.
- Be on the lookout for a new team of “Lasers” in the marketplace that will be bringing high discounts and deals to “low penetrated” customers trying again an already failed model of moving casket market-share. I don’t like the idea of being penetrated by a casket company (see story #1 above), but it seems that is the way some of them view funeral homes.
- Please, no new urns.
- 2015 will bring news stories of ignorance and disregard of the funeral profession that will eclipse the headlines over the well deserved servants of the deceased.
- Consolidation will continue and we’ll see some strange alliances from funeral service providers, suppliers, pre-need companies and even funeral related organizations. It’s called survival (see story #2 above).
- The relevance of DNA to funeral consumers (because we are destroying the DNA of deceased people when we cremate) will continue to emerge as a subject of importance. Will 2015 be the first year a family will sue a funeral home for destroying their loved ones genetic record without telling them?
I am grateful and blessed to have thousands across the globe read The Funeral Commander blog regularly. I am thankful for all the responses, even from those that take issue with my recalcitrant point of view because I believe that we don’t communicate very well as a general rule in the funeral industry. My personal belief is that we all should provide information in order to make good decisions; to the families we serve and to each other. This platform provides me the ability to share my experiences, observations, point out the obvious about the oblivious, and frankly say what some want to, but don’t. I want to encourage everyone to speak their mind, have an opinion, maybe even express an original thought from time to time…
I pray that everyone (even my favorite casket companies) will have a fruitful and safe 2015, after all, we are all in this together. From the Command Post and blurred by cigar smoke, cheers y’all! #thefuneralcommander
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