Thought Leaders Share Lessons from 2023, Look Forward to the Future

By Thomas A. Parmalee

With 2024 in full swing, it’s time for funeral professionals to take a look back at the year that just ended – and to envision what lies ahead.

The path you plot forward will be critical to whether you succeed … or fail.

To put 2023 in perspective as you aim to capitalize on opportunities, serve more families and be more relevant in your community, FuneralVision.com reached out to three thought leaders: John Heald, general manager of the funeral home channel at Legacy.com; Alan Creedy, a business consultant who is the co-host of the popular podcast “Two Guys and a Question”; and Michael Anderson, president of @need Marketing.

What do you think is the most surprising thing or event we witnessed in funeral service in 2023 – and it could be good or bad!

Heald: It’s likely at the top of everyone’s list but the acquisition of Batesville must be in the Top 3.  I thought back to when Aurora was acquired by private equity and then a few years later was successfully sold to Matthews.  The Batesville deal is interesting on a few levels but primarily another private equity company wanted to get into the funeral space as they see opportunities and upside on the manufacturing side.  It will be interesting to watch the reinvestment dollars that go toward Batesville and what they see and do in this space overall.  Is it technology, is it market share grab, more acquisitions?  Likely, all the above, but I think it is good.  The other big events would be the continued acquisitions of larger funeral businesses and which consolidator got the deal.

Creedy: Queen Elizabeth’s funeral and Southern Calls’ article on the Uvalde shooting.

Anderson: From a marketing perspective, Google’s Local Search Ads (aka “Google Screened”) finally launched into the funeral profession. We had been keeping an eye on it for quite some time, hoping that it might solve some of the challenges the funeral profession has faced with traditional pay-per-click. Without a solid strategy to account for these challenges, funeral homes running pay-per-click risked paying for clicks that were not actual leads, such as someone looking for a specific obituary, or paying for calls that weren’t actually leads, such as someone calling to find out if it’s too late to send flowers for a service.

The introduction of Local Search Ads allows Google to monetize the Google Business platform by charging for leads – not just clicks or calls. Google has elevated the prominence of Local Search Ads and pushed traditional PPC further down the page. My team and I have always said you shouldn’t just have to pay for clicks or calls that you can’t qualify — and while the jury is still out on funeral service, Local Search Ads seems to be quite effective.

Here’s the risk: While this is great for Google and great for local businesses that want to pay for leads, all local companies could be forced to pay-to-play, thus driving up costs and boosting Google’s revenue.

What happened in funeral service (or something that affects the profession) in 2023 that you think is the most overlooked occurrence – something that people may have heard about but haven’t thought about enough? 

Heald: I would answer the question this way.  It’s not about “what happened,” it’s more about what is continuing to happen with respect to companies going direct to consumer that has an impact on funeral providers.  Whether it be direct cremation providers, casket and urn companies, or funeral concierge offerings, they all affect those who operate in this space.  Take Titan Casket for example. It is largely a direct-to-consumer company, but it also supplies funeral homes with specialty caskets. The company seems to be gathering momentum, and while the impact to an individual funeral home will be very low, meaning maybe they get one family per year to buy a casket, across the country this number continues to grow.

Anderson: Those who were watching consumer trends closely in 2023 may have noticed a significant shift in behavior that will have a significant impact on the profession as a whole, which is that families began choosing funeral service providers that aligned with their values and expectations of quality service and care rather than choosing those that most closely aligned with their demographics. Historically and across the nation, funeral service has been a segregated business as people often chose the provider who they identified with. This could be a geographical preference; this could be from a religious perspective – Catholic funeral homes, Jewish funeral homes, etc. Race and ethnicity also played a part — Caucasian funeral homes, Black or African American funeral homes, etc. In the past year, we have seen (and helped) funeral homes reach a more diverse audience than ever before. This is important and reflects the shifting demographics in the U.S.

What are three things that every funeral home owner or senior executive should do to start off this year?

Heald: I recommend three things.

1. Do a website audit and ask your web provider three questions: 1) Where do I rank in search organically as well as for keywords? If the results aren’t strong, consider making a change 2) Take a look at your market from a competitor call volume perspective. Get an up-to-date report that shows call volume for 2023 and moving forward, so you can know what is happening.  I know where you can get said report.  3) Ask for a detailed report of e-commerce transactions and breakdowns. If what you see is not favorable, consider a change.
2. Set a growth goal. Whether it be at-need volume or preneed contract growth, having something to measure against is so important.  Then, what are the mechanisms in place to help you attain those goals?
3. Get help. Your business is likely successful because of your reputation in the community, your service, your staff and your facilities.  Notice I didn’t mention price but resting on these laurels allows for an unexpected competitor to surface.  So, expand upon what you’ve done in the past, try new partnerships with companies you can hold accountable and that will help your business accomplish your outlined goals.

Creedy: I recommend asking three questions:

1. What challenges are we most concerned about?
2. What can we do to mitigate or prepare for those challenges?
3. Who’s going to do it?

Anderson: Really, I have one solid suggestion that is multifaceted, and that is to have a simplified marketing plan to grow and sustain your business. Within that, there are several aspects, which are:

• Have clear business objectives for the year (ideally margins, revenue, or market share for existing businesses; call volumes for new businesses).
• Design strategies that ladder up to those objectives.
• Invest in tactics that ladder up to the strategy and objectives and either stop investing in tactics that align and are hard to abandon (ex. the annual church calendars that don’t seem to be generating a return, but abrupt discontinuation could negatively impact relationships).

I put all my eggs in this basket for several reasons. When you consider some of the biggest challenges facing the profession, such as declining average funeral service value and the increasing cost of doing business, it becomes clear that we can’t just sit back and assume that families will continue using funeral homes the way they always have. Funeral service providers are now in the position of needing to convince families to spend their hard-earned dollars on ceremony, and for that to happen there needs to be a plan in place.

I also look at the important trends going on:

• The cremation rate was estimated to reach 60.5% in the U.S. and by 2035, there are estimates that the cremation rate will reach 80%.
• The rising influence of the “Religious Nones,” or those who don’t affiliate with a particular religion.
  • This cohort will continue to increase significantly over the coming years.
• The rise of gray divorce.
• 60% of people no longer live in their hometown.
• 30 million people will move in the next 12 months.
  • Of the 30 million that move, 3 million are 65 years of age or older.

What is the number one thing that you see funeral home owners and senior managers continue to do wrong, and how can they fix it in the year ahead? 

Heald: They overwork, underpay and don’t invest in employee growth.  Too often, they have a mindset of “this is what I had to do.” This is hard because most of the owners today grew up either in the funeral home or around it, and it’s all they know.  The work ethic these days is simply different, and I am not saying that in a bad way, because I come from the camp of the previous generations. However, limited inventory in terms of help means the inability to be a little bit more flexible could have a detrimental effect on your firm.

Creedy: Funeral service is in dire need of reinvention.  As a result, licensees and owners will need to learn different skillsets.  In the late nineteenth century, they had to learn embalming and abandon coffin-making. In the late twentieth century, they had to learn about the internet and reduce the focus on merchandise.  Today, it is about managing the feelings of customers and guests.  This requires a change in focus from how you do things to how you treat people.  We need a shift from merchandising skills to social skills.  In particular, we need to master curiosity as we employ appreciative inquiry to help families explore options they haven’t considered.

Anderson: It’s not my place to tell funeral home owners and senior managers what they are doing wrong, but rather help them understand opportunities for growth.

From a marketing perspective, I think we’ve learned that 1) digital marketing continues to grow and 2) it’s important to understand how to leverage the many different options that are available, so funeral homes don’t overinvest in one channel (i.e. social media) while underinvesting in another channel (i.e. pay-per-click or search engine optimization).

This also comes down to having realistic expectations of each channel. For example:

• At-need families with no affiliation or brand loyalty to a funeral home are not searching social media for a funeral home when they have an at-need situation on their hands – they are going to Google.
• Preneed families are open to social media, but you need to be clear about strategy, expectations and budget management.

Note: This doesn’t mean these channels aren’t useful, you just need to know how to leverage them, so you don’t waste money

How do you think funeral homes have navigated the pull-forward effect of COVID-19, and what do you think the future will bring in terms of the death rate? 

Heald: I think most funeral homes didn’t understand the pull-forward effect of the COVID-19 pandemic in the death rate until it happened.  That’s not good or bad, just reality.  It’s the readjustment back to the death rates pre-COVID that is the challenging part.  This is the same for suppliers, as we all saw inflated numbers, but the reality is you must go back to the year(s) pre-pandemic and realize we may see a flat death rate or perhaps a slow increase.

Creedy: Candidly, without proper planning or perspective. “We take it as it comes” is the prevailing attitude.

Anderson: The funeral profession handled the pull-forward effect of COVID-19 really well in my opinion. There were some pretty heroic stories from funeral homes like Ballard-Durand Funeral & Cremation Services in New York to O’Connor Mortuary in Orange County.

According to the Pew Research Center, there are 71.6 million baby boomers living in the United States between the ages of 60-78, so it is expected that the death rate is going to continue to increase for years to come.

We continue to hear about a variety of different options as far as means of disposition, including natural organic reduction (or human composting) and alkaline hydrolysis. Is there anything you have heard about that you think we could see a significant increase in over the next few years? What newer option, if any, do you think shows the most promise? 

Heald: I don’t think it’s necessarily a newer or unheard-of option but more the continued interest and growth in these alternative disposition methods.  It’s been interesting to see the growth in businesses like Better Place Forests, which allow cremated remains to be buried or scattered around a memorial tree in a forest.  It is 100% consumer driven and focused.  Green burials, alkaline hydrolysis and the like will continue to grow, but I don’t think in any large-scale way –  but enough to support businesses that offer these services.

Creedy: Funeral homes in Canada are offering their facilities for assisted suicides.  Consequently, nothing can surprise me anymore.

Anderson: A lesson I learned in business school is that consumers like options. Whether it’s burial, fire or water cremation, alkaline hydrolysis, green burial or natural composting, consumers will value having options available to them.

Of course, there are hurdles for each:

• Regulatory hurdles will slow adoption across the country until these forms of disposition are mainstream.
• The value proposition will need to be clearly understood by consumers. For example, just because you offer alkaline hydrolysis doesn’t mean your community will understand it. So, messaging and marketing is important.
• There are also logistical hurdles, such as the proximity to the nearest green cemetery option.

What book would you recommend funeral professionals read as soon as possible and why?

Heald: “Turn the Ship Around” by L. David Marquet, which is “A True Story of Turning Followers into Leaders.”  The title and subject alone are compelling enough to want to read.  I’d bet there are some followers in your business that will make great leaders, they just need a leader to help show and teach them.

Creedy: “The Art of Gathering” by Priya Parker.

One sentence summary: Human gathering, for whatever reason, should always have a purpose; we gather because we need each other.

One surprising fact: A venue comes with scripts.  When you choose a venue (a church, chapel or funeral home) for logistical reasons, you are letting logistics override purpose when, in fact, the venue should be working for the purpose.

One important quotation: “When we don’t examine the deeper assumptions behind why we gather we end up skipping too quickly to replicating old, staid formats.”

Anderson: This is an oldy but a goody — “Break Through Marketing Plans” by Tim Calkins. Essentially, it was written to simplify the marketing planning process, which is important for funeral service, so owners and staff can focus on serving families. It’s easy to read and provides a good framework, but here is the idea in a nutshell:

1. Develop 1-2 business objectives for the year (margin, revenue and/or market share target).
2. Identify the strategies to deliver those objectives.
3. Invest in specific tactics that will drive the strategies and the objectives.

Once established, funeral homes can implement their strategy, monitor their budget and track results to find out what works and what needs to change over time.

One key takeaway: Our role as funeral directors has undergone radical change for the fifth time in our 175-year history.  We are no longer facilitators and undertakers following society’s expectations.  We are hosts and collaborators facilitating an outcome.  Each outcome is inextricably tied to purpose and purpose is tied to our immediate family and friends.  As hosts, we have implicit authority in this event –and when we abdicate that authority (as we almost always do) – we create confusion and anxiety.  Every time people gather, they are brought into the opportunity to help one another, to do what they couldn’t do or think up or heal alone.  It is in gathering that we meet those who could help us.

What website, resource, app or other tool would you suggest funeral professionals look into as soon as possible, and why?

Heald: I recommend subscribing to ALL things funeral service.  All websites that provide news and updates on our profession.  Sites like FuneralVision.com, Funeral Business Daily, Connecting Directors, Undertaking the Podcast, A Brush with Death Podcast and A Grave Affair to name a few.  Also, the standard trade publications like The Director, American Funeral Director, Funeral Business Solutions and the Funeral Home and Cemetery News (formerly the YB News).  I love reading newsletters from Johnson Consulting Group, The Foresight Companies, Ring Ring Marketing, Selected Independent Funeral Homes and more.  All these sources, both traditional and digital media keep you informed on what is happening in our space.  From a consumer side, I just set up a Google news feed with keywords important to me and then get results delivered when a search comes up.

Anderson: Of course, artificial intelligence, or AI, is and will continue to change the world every day. @need has been using AI directly (i.e. content creation) and indirectly (i.e. pay-per-click) for some time now, and it has enhanced quality and effectiveness in multiple areas.

If you haven’t already, start using the AI platforms like ChatGPT simply to gain experience and comfort using AI. To illustrate my point, I asked ChatGPT to write an answer to the question, “Why should funeral directors use ChatGPT?” and the response is below. Note that it took me less than five seconds to type in the question and less to get that result from ChapGPT. Impressive. Efficient.

“Funeral directors can benefit from incorporating ChatGPT into their services for several reasons:

1. Efficient Customer Support: ChatGPT can be employed to enhance customer support services. Automated chatbots powered by ChatGPT can handle routine inquiries, providing timely and efficient responses to common questions about funeral services, pricing, and arrangements.
2. 24/7 Availability: Unlike human staff, ChatGPT can operate around the clock. This ensures that families inquiring about funeral services or seeking information can receive prompt assistance even outside regular business hours.
3. Preplanning Assistance: ChatGPT can assist individuals in the preplanning of funeral arrangements. It can provide information about available options, answer questions related to preneed services and guide users through the planning process.
4. Educational Resources: Funeral directors can use ChatGPT to provide educational resources to clients. This includes information about different funeral traditions, religious practices and the various services offered by the funeral home.
5. Cost Estimations: ChatGPT can help users get preliminary cost estimations for different funeral services. This transparency can be valuable for families in making informed decisions about their budget and preferences.
6. Streamlined Appointment Scheduling: ChatGPT can facilitate the scheduling of appointments with funeral directors. It can gather necessary information, check availability and assist clients in setting up meetings or consultations.
7. Language Accessibility: ChatGPT’s language capabilities make it a valuable tool for communicating with individuals who speak different languages. This can enhance inclusivity and ensure that a diverse range of clients feels comfortable engaging with the funeral home.
8. Privacy and Sensitivity: Automated systems like ChatGPT can handle inquiries with a level of privacy and sensitivity. Users may feel more comfortable asking sensitive questions or seeking information about bereavement support through a digital interface.
9. Resource for Grief Support: Funeral directors can utilize ChatGPT to provide basic information and resources related to grief support. While it doesn’t replace professional counseling, it can offer initial guidance and direct individuals to appropriate resources.
10. Adaptability: ChatGPT’s adaptability allows funeral directors to customize responses based on their specific services and policies. This ensures that the information provided aligns with the funeral home’s approach and offerings.

By integrating ChatGPT into their services, funeral directors can enhance customer engagement, improve efficiency, and provide valuable support to individuals during the challenging and emotional process of funeral planning. It complements the human touch of the funeral director, offering a technology-driven avenue for information and assistance.”

Voila!

What trends are you seeing in the mergers and acquisitions space, and what do you think we’ll see in this area for both funeral homes and suppliers to the industry in the year ahead? Will there be more or less consolidation, etc.? 

Heald: Continued acquisitions on the funeral home side but perhaps at slightly less valuations due to interest rates and acquirers being very selective in the types of businesses they want to bring into their portfolio.  Same for the supplier’s side.  While there aren’t as many opportunities for suppliers in terms of the number of businesses available, if there is a software solution or product from a consumer side that makes sense, those are up for acquisition consideration as well.

Creedy: The increase in interest rates has had a delayed impact.  I expect that some of the smaller consolidators could be forced to merge with other, better capitalized entities.  Unless you are a premium opportunity, multiples have gone down but only slightly.  During 2023, the actual raw number of acquisitions seemed to decline slightly but seems to be picking up.

Anderson: The death-care profession continues to be relatively stable industry. With 71.6 million aging baby boomers now into their 60s and 70s, demand for death care will continue to increase. As such, we should expect continued M&A activity with funeral homes and suppliers.

Additionally, companies continue to improve operational efficiencies and the benefits of scale. However, increasing interest rates can really slow this down through the increasing cost of capital. We can expect that financing acquisitions through debt will be more challenging and business valuations will decrease, causing some owners to hold onto their businesses longer.

What recommendations do you have for funeral homes to attract and retain high-quality staff, and what staffing suggestions would you offer to keep funeral home operations efficient?

Heald: This is a hard one but seems simple.  I often see well run funeral homes and try to identify some of the factors that make them successful, and it always comes back to employees.  Most successful ones have employees that have been their 10+ years and much longer.  Without even asking how or why, I can assume a few things.  The work environment and culture are a positive one, staff are well compensated, not overworked, and there are solid and fair schedules and support systems in place.  The funeral home reinvests in employee development for future personal and professional growth.

Creedy: The staffing shortage is, in part, a consequence of an outmoded business model.  Funeral homes are attempting to staff their firms as if all their business was burial.  The increase in cremation with its (largely) lower service profile, should have increased per unit productivity, and it hasn’t.  The situation is exacerbated by the insistence of many licensees to do non-licensee work on top of their own.  A similar shortage occurred in the nursing profession.  At that time, that shortage was largely resolved with the advent of nurse assistants and LPNs.  Funeral service laws need revisiting and updating to encourage a similar model.

Anderson: It’s no secret that staffing has been the No. 1 challenge facing funeral homes for quite a few years. My team and I are blessed to work with many of the leading funeral homes across the country, and we’ve learned that the best do the following:

• Invest time, energy, and money in building a company culture which creates a place where people want to work.
  • This improves retention as people don’t want to leave.
  • This makes staffing easier as the word gets out – people hear about it or see it and want to become a part of it.
• Never stop building the recruiting pipeline—always be on the lookout for great talent.
• Maintain a strong relationship with mortuary schools to identify the best of the best coming out of school and get their attention early.
• Keep in close contact with funeral directors from competing firms that have a good reputation in the community. You can often identify those individuals by combing your competitors’ Google reviews as funeral directors are often mentioned in the reviews.
• Leverage platforms such as LinkedIn throughout the year to advertise that you are always looking for talented people to join your organization.
• Make it easy for candidates to apply by having an application on your website.

What would you like to see the national death-care associations do that they currently are not doing, or what need do you see that they are not meeting or need to do better?

Heald: This is a challenging one.  As suppliers, we spend a lot of time and money supporting several different organizations, annual meetings and more, which has served many companies so well.  However, the landscape continues to change.  Consolidation will continue to happen on the funeral home side and supplier side, and I often wonder if it will or should happen on the association side?  There’s a dream among suppliers of holding a weeklong trade show where everyone can participate.  Like the Consumer Technology Association event in Las Vegas every year, this would be similar.  It may be unrealistic perhaps given current structures, but given the amount of money spent by each supplier with diminishing or unmeasurable returns, it causes you to think about what to do, where to invest, how can we do it differently and how or will this part of our business change as much as funeral service continues to?

Creedy: Unfortunately, the politics of these organizations impede their ability to do much that would be effective.

Anderson: Maybe it is the space where I operate, but a question that I often hear from funeral home owners is the following: “How are you going to help me grow and sustain my business?” That’s a question I must answer from the perspective of a marketing agency, and state and national associations are being asked the same question. If a company or organization can’t effectively answer that question, especially with the younger generation of owners, it’s tough sleddin’ ahead.

I think it is important for any business or association to revisit their value proposition to understand if the value they are delivering today still resonates with their customers as it once did years ago. For example, is the value that my dad received from a national organization when he was in the business still relevant to my brother who now runs the business? The business today is very different: the consumer is changing, competition is increasing, margins are lower, cremation is rising, staffing is more challenging, etc.

The Texas Funeral Directors Association is a very forward-thinking group as Jason Harrell, Starlyn Aurit, and Harvey Hilderbran have been addressing this opportunity with the goal of increasing member engagement and participation throughout the state of Texas. Many other associations could look to them for inspiration.

This is also a question that I hear from other suppliers at conventions. Conventions used to be a place where suppliers could expect to see many of their existing customers while engaging with prospects, but convention attendance has been declining while costs to attend and/or sponsor continue to increase. Thus, the value of convention support will continue to be called into question.

What other thoughts do you have to share for funeral homes to position themselves for success in the year ahead?

Heald: Stay focused.  Run your business like you’re a startup and everyone is coming for you.  If you’re a funeral home, families first!  For me at Legacy, it has and always will be funeral homes first!

Creedy: Learn the skill of appreciative inquiry, be bolder and more assertive in arrangements, learn to delegate.

Anderson: From a marketing perspective, I would say this: embrace change. Online marketing continues to change, whether it is a new offering from Google such as Local Service Ads, a new channel such as over-the-top advertising, a new social platform that captures the target audience, or a new technology such as AI. In all things, exercise discipline and have a plan for the future—but don’t be afraid to pivot when things change.

Follow FuneralVision.com on LinkedIn.

Follow FuneralVision.com on Twitter.

Follow FuneralVision.com on Facebook.