We had the privilege of having Alan Creedy, mastermind behind the blog Creedy Commentary, spend a few hours at our office Monday morning. We took the opportunity to talk with Alan about different issues facing funeral professionals and how we believe adaptation will be the defining factor in the success or failure for funeral homes and funeral suppliers.
Alan has a gift in the way he can peel back the layers on different issues. His insight on the underlying details that so often get overlooked are so valuable. One of the topics we asked Alan to comment on was the recent acquisitions that have taken place in the profession in the past few months, first with the acquisition of Lohman Funeral Homes by Stonemor and just this past week the acquisition of Aurora Casket Company. These were two businesses that for so many years have been huge advocates of family own operations.
In the video below Alan addresses the Aurora Casket acquisition and how the landscape of the profession isn’t changing, it has changed, and the companies and funeral directors who can’t read the writing on the wall will soon meet their end as well.
Nice tight summary of the need to change to simple catch up with the train of change that has already left the station.
The situation needs to be addressed on several levels – personal beliefs
about being able to actually change and then either changing or getting
out of the way of those who will.
Staff education and training and probably listening to the younger staff
members about the beliefs and practices of their cohorts and
Extensive community interaction and systematic education on critical issues. – Thanks Alan – tim
Interesting commentary on the demise of our profession…………. At Law-Jones, we currently wrap our arms around the issues most important to our everyday families, and they respond! Wow, if we actually give our families what they want, at a fair price, they are satisfied! This includes integrating the life of the deceased online and in our chapels through photos and video. These tools make it easy for the family to celebrate and shout-out “this person was important to us!” We deliver this media into our public’s homes and directly into our chapels. Heck, even the eulogist can easily sync his talk to a handful of family photos diplayed on the big screen. Since the time we committed ourselves to this venture, we have seen a resurgence in the use of our chapels for non-traditional services. Our families want convenience throughout the funeral process, start-to-finish. Re-examine every detail you perform, and do everything with the families best interest. think outside the box, get rid of tradition if it doesn’t fit. Get rid of built-in costs if they don’t immediately benefit your families.
We can go on and on, but if you are doing the small things, like meeting your families at the car to assist carry-in the clothing, photos, etc, in order to build-up the relationship and trust, then you will survive rather well. If you choose not to, by all means do us all a favor, retire.
I strongly agree. Our profession is moving through great change. Too bad the consumer beat us to this change. All we can do is pick ourselves up, dust off our boots, and make a decision to move into the future today. Your families will appreciate you for your efforts, and this will show up in your bottom line.
Gods Speed,
-Matt Jones
What era is coming to an end? The consolidation era began in the 1980’s and continues; the Daniels, Lohman and probably the Aurora acquisitions may have been moved ahead a bit by the pending year end tax law change that will penalize dividends. All three of these businesses are well run, profitable businesses with the potential to be even greater.
Incompetent operators have been in steady decline since the cremation rate began to elevate in the 1970’s in California and Florida, and there remains a significant number of funeral businesses nationally, most of which serve smaller communities or particular ethnic groups, that have the luxury of ignoring the growing cremation rate. But mainstream death care businesses have been making adjustments for several decades. From my perspective gained by visiting a hundred funeral businesses annually, funeral businesses are adapting everyday by adding facilities, introducing reception centers, training their staff to make more meaningful arrangements, and to win the price shopper battle.
Keep this in mind; whenever an individual or business sells an asset, for whatever reason, there is an investor on the other side that sees a profit opportunity. Sure, three high profile businesses just sold; all that means is three high profile buyers made an investment in the future. The question is which party made the best bet?
just to clarify, i am not saying the acquisition or consolidation era is ending, rather, i am saying we are coming to the end of the era of overcharging your traditional families to subsidize your non traditional families. and yes, there are a few firms that are adapting. but the overwhelming majority of funeral homes and cemeteries are not.
I am now retired from Funeral Service and have seen the degradation of funeral service with the advent of the Corporate homes. The whole thrust with Corps. Is squeeze the turnip till there’s no blood left. Profit is not a dirty word but we were purchased by a corp. in 1994 and the 1st year we saw an increase of $590.00 in our service cost and we went from 1.2 markup for caskets to 1.8 and Vaults increased $400.00. We had 2 owners and 4 Funeral Directors in a 225 funeral rate. The owners lived a good life and as F.D’s we were fairly compensated. The corp. told us many things and relented on most of the promises including cutting F.D.’s to three. I believe if the independent homes would make the issues more available to the public there would be a shift away from the Corps. And cremations would be diminished to some extent.
Change? Change what? All we talk is about “change” but I’m sorry to say that the right word at this moment is “adaptation”. This high cremation trend is not going to be stop by any of us,so, we better adapt what we have to the new funeral service and evolved into something better for our families. What we really need to detain is the direct cremation services. That is our real challenge and as far as I have already seen, we are far from getting the right solution. Anyway we are still fighting and that’s a good sign.
Alan Creedy mentioned that burials are down 6% this year alone and that is a scary decline if you are a casket maker. Looking into my cloudy crystal ball I think that Hillenbrand might be looking at splitting their company as their stock price is down by nearly one third in the past twelve months, this despite their process equipment division showing steady growth. Large stakeholders in Hillenbrand will not want Batesville holding the company back and demand action. If a divesture of Batesville is in the cards I wonder if SCI would pick them up or a private equity firm like Kohlberg who bought Aurora. Interesting times ahead folks as this industry shakeup is only in the early stages.