The challenges facing death care this decade will obviously be a continuation of what has been building. Where should we start?
NM: Start at the obvious. The cremation rate is probably going to increase and this will have more of an impact than expected because I don't think that the economy is going to get much better any time soon. I think consumers over the last two years have hunkered down and decided that this is the way that things are going to be and life is not going to be like what they had experienced before. I think everybody across the board is going to be more conscious of how they spend money.
The first result of that is that people are going to look at everything that cemeteries and funeral homes do with an eye toward how they are going to save money. Cremation is a real serious option for them. Then what I think people are going to do is figure out how to do self-created memorilization and disposition.
We have been unable to identify somewhere in the neighborhood of 60-75 percent of exactly where cremated go. Just based on anecdotal stuff and mother-in-law research it's my belief that a lot of people are sitting on cremated remains, looking at that box and thinking, "my goodness, what am I going to do."
I do think that some of those remains are going to come back to cemeteries and into columbariums. But I also think that down the road there will be more occasions of people thinking about how to do scattering in different places without the fear of the park ranger coming in and finding out what they are doing. People will be creative and figure out how to get around that.
It seems that research for the average consumer is no challenge these days.
NM: There is a lot of help on the internet, no just with research but with solutions. There are companies putting their own memorials together without the funeral home being involved. I think what is going to happen is that people are going to be spending less money within the industry to get their cremation taken care of and spending more outside of what has been the traditional industry, who are constantly figuring out how to get their messages out on how to help [consumers].
For example, I saw one company's site that offers all kinds of templates so that someone can put a themed book of photographs together and bound for something in the neighborhood of $30-50. So if you think about people wanting to create mementos, like an online scrapbook kind of thing, there are some funeral homes doing now and charging $400. Meantime there are companies who employ programmers overseas and pay them very little who can create these memorial en mass.
As we said, this is a continuation of a trend that started long ago with alternatives to traditional products and services readily available now and that is the power of the internet.
NM: Somewhere in the area of 80 percent of purchases made today people either check the internet first before they buy or they use internet to actually make their purchases. It is hard to believe that 80 percent of commerce is involved in the internet. A funeral director might think that no one will go online and buy a casket from Walmart and Costco, but they will go online and find out what the deal is on product that the funeral director is selling — and that applies to caskets, urns, registry books, memorial albums. Whatever the funeral director sells there is a resource for people to find information and even to make the purchase. There is going to be even more pricing pressure on product because of that.
Is Walmart going to open up a lot of people's eyes just for the mere fact that they are selling caskets now?
NM: Yes, this all relates to what I said earlier that people will work to save money. Aside from product, there may be less use of a funeral provider's services too. Over on the Main Line (an affluent suburban region near Philadephia), where people are highly educated and have a lot of money, they hardly ever have evening viewings any more. Things are being done in a one-day service. I think in general people will learn and get used to one-day services as substitute for the traditional day/night viewings followed by an interment service the next day. What that means is that the funeral homes are going to lose the revenue from the use of the facilities. And there is a good chance that if people understand that embalming isn't necessary especially if they are not going to have a viewing, they are going to lose their embalming fee. There is going to be more people opting for what used to be called direct burials with some minimal services at the funeral home, or even a graveside service.
There has been talk for a long time about Marriott and the hospitality industry making inroads in traditional funeral practices.
NM: I have always thought that guys like Marriott who have downtime in their facilities in the middle of the week when funeral service or celebrations could occur, could figure out a way to turn that downtime into profit. Marriott and the others who do a good job in the hospitality industry could enhance their use of facilities for these types of ceremonies. They are using their ballrooms for weddings, mostly on weekends. I am sure they could figure out how to become a player here and satisfy those families who want to have some sort of special service who may not want to use the funeral director.
Churches membership has been eroding for over 20-30 years now. Some of the most progressive churches have been putting in multi-media centers, A/V equipment and sound systems. My guess is that the churches are going to make a stronger play for using their facilities for memorials and funeral services.
It seems like for many death care operation, that it will take a ramped-up effort just to maintain the current share of the marketplace?
NM: The first thing is being in tune with all of the changing needs and wants of consumers, and being there first to show that you can do a better job than Marriott, you can do a better job than the church, you can do a better job of providing the casket than Walmart can, so there is demonstrated value added by being a funeral director rather than by being just guy who gets the casket for them.
For example, if you just take the green movement as a blip on the radar, or take it as an emerging trend, the smart funeral director and the smart cemeterian will make sure that they can satisfy the green-oriented customer. Recognize this. Have options available on the funeral side to serve the "green" consumer who wants the viewing and services where they can support that person rather than fight them. If it is a cemetery, offer the section and publicize to the entire community that you have a green burial section that can accommodate green memorials and burials. Not only does this satisfy the people who want to do those things, it also adds to the credibility of the image of the funeral home and the cemetery as being somebody who is in tune with what the consumer wants. If I were sitting in an audience at a workshop, and even if I didn't want to do a green funeral or a green burial and I'm dealing with a guy who is telling me that they do these things, my perception is that "if he's doing that, then he will probably be able to do what I am looking for and satisfy the service that I am seeking."
The more engaged a death care provider is within the community, you've got the attention of the public and it gets people thinking that a funeral home or cemetery is more than just the place to go to when someone dies.
NM: The funeral director has to show they provide value instead of just standing there doing the funeral director rock with their hands in their pockets or behind their backs while the services is going on. They have to provide value, not only when providing the service, but providing value 365 days a year. The way to do that is through the internet and by having a web site that is useful.
And don't be afraid of or to minimize the impact of social networking sites. There are more than 250 million people on Facebook. This is an incredible number of people and nobody is taking advantage of this. There are a number of ways to use Facebook to promote a business's name, products and service. Facebook allows the creation of virtual communities where you can have direct contact with people in your area. The whole idea with social media is to relate to your community what you have to say and what you have to offer. Facebook is the perfect way to do this and it doesn't cost anything.
I just saw a group on Facebook, it was someone's high school class, they had over 500 people. Granted there is a lot of mobility and Facebook is an easy way to keep in touch with people who are all over the country. But it is a great to keep in touch with your own community and to provide information. All funeral and cemetery providers need to become more active and involved in the community that focuses around the products and services they provide.
The problem is that when you are on the outside looking in, this is a no-brainer. But those on the inside should not be content with what they are doing and oblivious to what is going to happen to their future. While Marriott might be researching methods to increase productivity during their so-called down time, funeral directors during their downtime are just happy to be home, or fishing or golfing. Sometimes they are just happy that there is nothing going on.
Johnson-Woodford, management consultants to the deathcare industry
Postscript
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