By Thomas A. Parmalee
Corey Gaffney, 45, president and CEO of Gaffney Group LLC in Tacoma, Washington, still remembers that conversation he had many years ago with Lowell Lohman, a savvy entrepreneur.
“He got real serious at one point while we were having lunch at a funeral convention, and he said to me, ‘You know, Corey … if you can run one funeral home, you can run two. If you can run two, you can run four. And if you can run four, you can run eight.’ And so on and so on. And he was spot on.”
After that pep talk, Gaffney eventually went from running two funeral homes to running seven before selling two firms.
Lohman, incidentally, didn’t end up doing too badly for himself: He built Lohman Funeral Homes, Cemeteries and Cremation into one of the nation’s most respected firms before he and his wife, Nancy, sold it to StoneMor Partners in 2012 for $25 million.
While Gaffney is happy with the size of his business, he remains on the lookout for prime acquisition opportunities to grow in his established market, he said. That wisdom from Lohman, he said, is always there – beckoning.
“Could I run 14 funeral homes?” he asked. “Yes, absolutely. All it takes is the right people. Do we have a template that is repeatable in terms of success? Yes, absolutely.”
Growing Up in Funeral Service
Gaffney is a fourth-generation funeral director.
“But that doesn’t make you funeral royalty … it just means that you have good teachers,” he said.
His mother, Ellen Gaffney; and his father, Larry Gaffney, graduated from Gonzaga University in 1972. “Then my dad attended mortuary school in Portland until 1973,” Gaffney said. “After that, they moved to Tacoma where both began working at Gaffney Funeral Home for my grandfather, Ted Gaffney.”
He appreciates that he had a front-row seat watching his mom and dad carry out the work of being hardworking funeral directors. They ran two businesses – Gaffney Funeral Home and Tacoma Mausoleum and Mortuary, which includes 6,500 crypts. His father took over the latter business in 1975. “He was thrilled because it had a crematory,” he said.
“When my father got involved with the crematory in 1972, my grandfather told him, ‘Cremation is coming, Larry – it is coming,” Gaffney said. “We have had a front-row seat watching its growth. Washington state is now at 83% cremation – the highest in the country. We have just had to a adapt a little faster than some of our friends elsewhere who are still at 60% burial.”
Interestingly enough, when the mausoleum opened in 1909, the Gaffney family had nothing to do with it.
“It was given a patent from the National Mausoleum Co., and my parents still have the certificate hanging in the mausoleum lobby,” Gaffney said. “The very first one was built in Ohio and this one was the second one in the country (and the first West of the Mississippi) – and it just kept expanding with more and more wings.”
Gaffney’s father got involved because his great-uncle was a member of the mausoleum’s board of directors. “My great-uncle became a member of a five- or six-person board, and all of the board members died off in a six-month period, and he was the last man standing. Ownership transferred to him, but he was an attorney by trade and was contacting my dad right and left. It got to the point in 1975 where he said, ‘Larry, I’m just going to sign this over to you. I’m done, and I’m going to enjoy retirement.’ So, my dad was given the keys to the kingdom and didn’t have to buy anything. He ran that business independent from my grandfather.”
Today, it is a very nice sized business, and expanded some years ago into serving families with pets. It cremates about 8,000 animals per year, Gaffney said.
Born to Serve
Although he comes from a bloodline of servants who’ve made it their life’s work to take care of the dead, Gaffney was not sure whether he’d continue along that path at first.
“I started off mowing lawns and washing the fleet,” he said. “I liked it, and not just because I was the owner’s son. From day one, my dad always told me if I was going to do this work, I’d have to work harder than everyone else, so people wouldn’t think I had everything handed to me.”
Gaffney went to college and ended up getting a job in the information technology sector.
“I did that for a short time, but I just found out I was more of a people person,” he said. “Sitting in a basement of a large building and being deployed when there was a problem was not the best fit for me.”
Around that time – 2001 – cremation was really starting to heat up. “I saw a ton of opportunity in the profession, and I made it a full-time career right then,” he said.
Since Washington state offers a bifurcated license, Gaffney was able to become a funeral director without ever becoming an embalmer.
“I told my dad I’d rather learn to cremate than embalm,” he said. “I must have had my good convincing hat on that day, because he thought it was a good argument.”
So, in 2003, he learned how to cremate, and he’s excited that the firm recently took delivery of a new, state-of-the-art cremator.
“Everything is auto controlled,” he said. “It is so futuristic; it blows my mind. I learned on a cremator where you had to turn on a blower and flip a switch – it had all this manual control that required a great deal of concentration and monitoring. These days they load themselves, cremate themselves and connect to the internet.”
In 2007, he became a licensed funeral director, and with the cremation rate in Washington state so high, he’s never seen a reason to get his embalmer’s license. “But I have a great deal of respect for the embalming process,” he said. “To be able to push pause and allow a family to have that time and fly in out from out of town and make sure that everyone who wants to be there can be there, I see a lot of value in that.”
It was a good thing he decided to get back into the fray of funeral service when he did, as it gave him the chance to start working with Jen Mack, who is now his wife, the vice president and chief financial officer of the firm. Together, the Gaffneys have two children, a 13-year-old daughter and an 11-year-old son.
“We began our journey as co-workers,” Gaffney said, noting that they worked together for about five years before they started dating.
Jen began with the firm in 1999 as a night associate, Gaffney said.
“She would come in and tend the building for visitations, do some chores, and at 8:30 she would walk up half a block where an apartment was provided and answer the phones all night and dispatch funeral directors,” he said. “My dad never wanted an answering service to answer the phones – he always said, ‘If you call, you get one of us.’ That was a differentiator he hung his hat on for many years.”
Over time, the pair got to know each other, respect each other and like each other, Gaffney said. “In 2005, we started to see a lot more of each other in terms of projects I was working on, and coincidentally, I kept showing up Wednesday night, which was her night on. We dated for a good stretch before we let anyone in the office know. We wanted to show respect to the organization and to our co-workers in case it didn’t work out.”
Over time, Jen took on more and more duties, and she became a licensed funeral director in 2011. Today, she’s vice president and chief financial officer of the company.
“She knows how a funeral home needs to run from top to bottom and has exceptional gifts for administration, human resources and accounting,” Gaffney said of his wife. “She helped me build the business to what it is today. Without her input, guidance and partnership I am quite certain we would not have achieved the level of success the company enjoys.”
In December 2012, Gaffney and his wife bought Gaffney Funeral Home from Gaffney’s parents just several months after co-founding the Cremation Society of Washington.
His parents kept control of Tacoma Mausoleum and Mortuary. Although they are largely retired, Gaffney’s brother, Colin, is an employee at that business, which Gaffney’s parents still own and operate. Corey Gaffney and his wife have no involvement with it.
Gaffney is one of three boys. “My middle brother got smarter than the rest of us and decided funeral service is not for him,” he joked.
In 2017, he learned that Service Corporation International was seeking a buyer for the locations it owned in Pierce County.
The Gaffneys took the plunge and bought five funeral homes and one cemetery.
“Two of the five we bought were in central Washington, and we have a big mountain range right down the middle of our state – the Cascade Mountain Range,” Gaffney said. “In the winter, many times that range is unpassable – it is snowed in.”
Gaffney knew it would be a chore owning those firms, even though they had the potential to be solid businesses. “They were former Keystone businesses that had merged with SCI,” he said. “When we tried to talk to SCI about leaving those off, they said it was all or nothing. So, we bought them with the intention to divest them at some point.”
So, in July 2020, the Gaffneys sold the two central Washington firms to the location manager before forming another cremation business later that year: Cremation Plus.
In April 2021, they made another acquisition – the 10-acre Oakwood Hill Cemetery, which they bought from Clearstone Memorial Partners. They would license it as a funeral establishment and rename it Oakwood Hill Funeral Chapel & Cemetery.
Today, Gaffney and his wife own seven funeral homes, two cemeteries and three crematories. The total business serves about 1,300 families per year, mostly from 10 counties in the western part of the state, where the majority of the state’s population lives.
Asked if he’d like to expand beyond his home base, Gaffney seems content with what he owns – although he’s keeping an open mind. “We have had our opportunities to expand in other states, and some I wish I had pulled the trigger on,” he said. “But my daughter is 13 and my son is 11. I don’t necessarily want to be in my car or on a plane all the time. I want to go to volleyball matches and baseball games and all those things.”
Still, he knows that opportunities will likely come up in the coming years as many owners will be looking to retire. Those words from Lowell Lohman echo in his mind sometimes, even now.
“I have had some of those opportunities that are five hours away by car,” he said. “I know what that drive looks like … and I don’t want to live out of a hotel room. But do we want to keep growing? Absolutely.”
The Focus Is on Nimble
Gaffney focuses on running his firms with quickness and efficiency.
“People are held accountable,” he said. “We can accomplish in two days what takes other firms’ weeks. So, we are nimble.”
Companywide, the business serves more than 1,300 families per year, with about 75% of those opting for cremation.
Like some other leading firms, Gaffney focuses on serving families with varying needs through different brands. His “premium” division includes two funeral homes, and his “value division” operates with a Newcomer-like model, he said. There’s also what he calls a “simple” division.
The premium division is comprised of two funeral homes, Gaffney Funeral Home and Powers Funeral Home.
“Gaffney is one of the longest continuously operating funeral homes in the state, having been in business since 1883,” he said with pride. “It’s in Tacoma and serves families primarily in Pierce County. Powers Funeral Home is the oldest funeral home serving the Puyallup River Valley. Both of these businesses have the finest facilities, equipment and staff and charge accordingly for that reality.”
The value division is comprised of three funeral homes: Oakwood Hill Funeral Chapel & Cemetery, Price-Helton Funeral Home and Sumner Voiles Funeral Chapel. “Oakwood Hill was originally founded in 1874 and was the site of the second crematory installed in Washington state,” he said. “It’s in Tacoma and serves families throughout Pierce County. Price-Helton Funeral Home was founded in 1911 and is the oldest funeral home serving client families in the Auburn Valley. It’s in Auburn and serves families throughout King County and also a bit into Northern Pierce County. Sumner Voiles Funeral Chapel was founded in the early 1920s and is Sumner’s only true funeral home with a chapel and ample parking. It serves client families throughout Pierce and King counties.”
The firm’s simple division is comprised of two funeral establishments, Cremation Plus and Cremation Society of Washington. “Cremation Plus is a new company, founded in 2020 and is located at the site of our two crematories,” he said. “It serves families throughout King, Pierce, Kitsap and Thurston counties. Cremation Society of Washington was founded in 2012 and has been called ‘the Amazon of cremation’ by many of its client families. It has a robust website staffed by qualified personnel but no facility for the public to come to. It serves families in 10 counties throughout Western Washington.”
Some people walk Gaffney’s premium brand and are extremely elated with the quality of the facilities. But when they go to make their choices and review their charges, they may experience sticker shock. “We politely refer them to one of our sister funeral homes that may be a better fit,” Gaffney said.
He continued, “Normally, if you stop and start with a funeral home, there will be some fees accrued, but we’ll say, ‘Hey, no problem, we will waive those fees if you go to our sister funeral home.’ They understand they are dealing with a different firm, with different staff, different facilities and a different value progression. But they are still staying in the Gaffney family.”
The firm serves a lot of families who opt for direct cremation, Gaffney said. “I always preach to people that there is a lot of power in bringing people together in one place for one purpose – to say goodbye, but not a lot of our customers buy into that,” he said. “You can’t go around grief, you have to go through it. But a lot of our customers don’t agree with that.”
He continued, “We have to straddle two worlds — being a caregiver and listening to client families and what they are asking for and also being a for-profit business. We need to be able to turn a profit, or else we won’t exist.”
It weighs on Gaffney that so many families say they are going to get the cremation done now and have a service later. “And that is code for they are not going to have anything,” he said. “This may sound cheesy, but it makes me sad – not for my business but because that is not the right way to do it. I feel that deeply.”
Some of his funeral directors, including one who has worked at the business more than 40 years, have become more forceful in suggesting to families that they’d be better served to have a gathering where friends and family can come together and grieve.
Gaffney’s grandfather used to be blunt about the choice that families are really facing, Gaffney said. “He would say, ‘You are either going to pay the funeral director or the psychologist – make your choice and choose wisely.’” He explained, “He meant that you are going to go through the stages of grief, and you may as well do it the right way and the more abbreviated way.”
While Gaffney thinks having a ceremony is much better than opting for something simple, it’s not lost on Gaffney that the majority of his rooftops – five out of seven – serve price seekers. “Cremation by far and large is what people want,” he said. “I want to have a business that wraps around those desires and needs … This does not preclude or reduce our ability to provide burial services at an extremely high level of quality. It’s just that our business model no longer relies on the sale of burial products and services for us to remain profitable.”
He added, “Our core function as undertakers and funeral directors is to help people say goodbye Whether that entails carrying on family traditions or making a new tradition, as long as we are saying goodbye, we are accomplishing our mission.”
Gaffney also offers natural organic reduction or “composting” to families, although he noted that last year in his first full year of offering the option, no one chose it.
Through a third party, he also offers alkaline hydrolysis, or what he calls “water cremation,” which he estimates he’s sold about 10 times. “From a strategic standpoint, we want to offer more options than our competitors,” he said. “But I think when I retire, traditional cremation is still going to be king. Could I be wrong on that? Absolutely.”
While he thought about buying his own alkaline hydrolysis machine, he chose to err on the side of caution. “I don’t need to completely believe in something to break out the checkbook for it, but I have to ask if it is truly going to provide a return on investment,” he said. “We don’t have investors – it’s just us. And you have to invest in more than just the cost of the unit … I looked at the ROI analysis and said that this is not an opportunity we have to be first with.”
What he did do, however, was invest $350,000 in a new Facultatieve Technologies machine, which brands itself as FT The Americas in the United States. “It’s a Dutch company, and my mother-in-law was born in Holland so that is pretty cool,” he said. “The machine cremates in 60 to 90 minutes instead of two to four hours. It saves 60% to 70% on fuel costs. Those are the types of investments I’d rather make, and in the future, we still have room for a water cremation machine if needed.”
Navigating the Pandemic
Some may have forgotten, but Washington state reported the first COVID-19 case in the United States and became one of the most locked down states in the nation.
That first case and subsequent outbreak occurred at Life Care Center in Kirkland, not too far from Gaffney’s flagship location. The Life Care Center location where the outbreak occurred also shared staff with two other centers close to Gaffney’s funeral homes.
“Some nursing homes you would walk in, and it would look like a scene from ET, with halls that were all plastic,” he said. “I had to roll in there with an N95 mask and a Tyvek suit. We stocked up on PPE like crazy … I had hand sanitizer coming out of every single pocket.”
Procedures at the funeral homes changed, too: Suddenly, a weekly cleanup became something that needed to be done three or four times a week. “You could smell Fabuloso everywhere,” he said. “Everything was spic and span.”
With so many people dying, Gaffney’s crematories were going nonstop.
“There was really only one way we could get out of this from our viewpoint – and that was to cremate our way out of it,” Gaffney said. “We had two retorts powered by natural gas. We also had a backup generator, and we were able to continue operating when many others could not when they lost power. You couldn’t even lose a day or two. Some days, we were pulling in 10 to 15 cases.”
At first, it was a little exciting, but it quickly burned out the entire staff, Gaffney said. “We just wanted it to be over,” he said, noting that there was another huge spike in the death rate in January 2022 with the omicron variant. “We did 150 in January, whereas normally we may do 100 or 120,” he said.
While those not in funeral service may automatically think Gaffney must have been doing quite well for himself during all this, nothing could be further from the truth.
“Our profitability took a good-sized hit,” he said sadly. “Our most profitable offerings were wiped off the table. There was a six-week stretch in the spring of 2020 where our governor completely outlawed all funerals, so we were in the direct disposition business. We would transfer loved ones into our care and handle the paperwork.”
Little touches like having fresh baked cookies available for visiting families temporarily disappeared – people were afraid to even meet in person let alone pull down their mask to enjoy a snack. “There was no ceremony, no saying goodbye,” Gaffney said. “People met with us over the phone, or we handled arrangements via Zoom.”
Sadly, the public received a huge endorsement from the government validating their inclination not to do anything to honor a loved one’s death, Gaffney said.
“The pandemic didn’t help,” he said. “When I put on my CEO hat and look 10 or 15 years down the road, I admit it makes me sad for what funeral service will look like. If no one wants to see the value of ceremony … maybe I will get out of this business – and I don’t say that in a cavalier fashion. I see a lot of value and importance in what we do.”
While Gaffney thinks his firm has gotten a lot right, he freely admits that preneed is “my Achilles heel.”
“It is really something I wish I could report to you and everyone else that I was much better at than I am,” he said.
While his preneed-to-at-need fulfillment percentage is at 25%, which he considers healthy, he feels there is room for improvement.
“If I am doing 1,300 calls per year, I should be writing 650 preneed contracts, and quite frankly, I’m not,” he said.
While he’s partnered with various preneed marketers over the years, “It’s been like two pieces of flint banging against each other, but we can’t make a spark,” he said. Moving forward, he plans to keep his efforts in house, find and hire the right people and get serious about promoting the value of preplanning. “Not just locking in today’s wishes but today’s price,” he said.
Gaffney can see the sense of it bringing a renewed focus to preneed, especially considering that in Washington state, once a death occurs, you can’t undo the selections in a preneed contract. “So, preneed is very much a way to hedge against future diminished choices and traditions,” he said. “Most families will walk in and say, ‘OK, let’s do what Mom wanted.’ Most are very comfortable with that. Now, some families will say, ‘Well Mom may have wanted to do that, but we don’t.’ And our response is, ‘Our hands are tied.’”
Asked about aftercare, he said he worked with one company a couple of years ago but did not see a return on investment. “Aftercare is one of those nuts I want to crack, because I am always seeking out ways to differentiate ourselves,” he said. “I think aftercare is one of those new battlegrounds of funeral service that we need to explore to see how it can deliver value to the funeral home owner, and of course, to client families.”
As to what truly makes him different from competitors, Gaffney said it comes down to his facilities, equipment and staff.
“We are no different than a fine hotel or fine dining establishment,” he said. “Some want to eat at McDonalds, and some want to eat at a fine steakhouse. To me, it is about ensuring Jen and I operate at the right segments of spend that people want – and right now, I think being in the middle is the worst place you can be in funeral service. I am unabashed about our premium brands being the most expensive in our county.”
But being able to feel that way entails a lot of work and investment: “For us, it means the finest of facilities. Our equipment will be late model if not brand new,” he said. “It means having a nice automotive fleet (which Gaffney makes sure is parked outside and not in the garage where no one can see his five vehicles). It means having a new crematory like we have. And at our value brand, we also have very nice facilities.”
Looking around, Gaffney sees competitors in his market who have not shifted their business model to cater to the changing consumer, which means they’re struggling to keep up. “They can’t replace the carpet,” he said. “They have a 15- 25-year-old hearse. And they think people are not noticing that. I say people do notice.”
Gaffney is also comfortable knowing that his firm isn’t for everyone.
“I’ve gotten into debates with funeral service colleagues because we don’t have a family retention policy,” he said. “We call it catch and release … sometimes it is best to let people go and let them leave.”
Copyright FuneralVision.com, 2023. All Rights Reserved.