August 27, 2001

            TIP #1:  If you want bigger business, then head for the suburbs the next time you expand.

            Not only is that where you'll find a pre-need gold mine, it's also where funeral homes make more money and have a higher call volume, according to an exclusive FSI survey.  The data are a continuation of survey results we shared with you last issue.

            Average revenue and call volume for our respondents:  280 calls and $1.10 million in revenue.

            Funny enough though, casket sale averages actually decrease in the suburbs.  A comparison:  we found a $1,960 average in the 'burbs' versus $2,130 in small towns and $2,300 in urban areas.  (The overall casket average was $2,100.

            One possible reason for the suburban slip:  For one, rural areas are typically well-known for traditional (read:  pricier) funerals with services.  As for the urban angle, consolidators have acquired in more cities and that may have prompted FDs at nearby independent firms to raise their casket prices, says Quinn Eagan, president of Preneed Funeral Program, Metairie, La.

            TIP #2:  To boost casket sales, experiment with the number of caskets to show in your selection room, suggest FD A.J. Daoud, Cox-Needham Funeral Home (220 calls), Pilot Mountain, N.C.  He thinks FDs who show 30, 40 and 50 caskets ultimately confuse families.  He also sees FDs shot themselves in the foot by focusing on 20-gauge non-sealers.  Instead, introduce some sealer and stainless steel caskets into the mix and aim for around 18 caskets - that's his magic number.  Result:  Nearly one-third of his families purchase a stainless steel last year.  He also sold 12 coppers and 1 bronze.

             Now, here's an interesting thing about casket sales and cremation:  Our survey shows their averages decrease by about $500 when you work with a firm that does more than 30% cremation.  The numbers:  Firms with a 1-9% cremation rate have average casket sales of $2,320.  Yet firms with a 31%-50% cremation rate have average casket sales of $1,850.  Suggestion:  Don't include your rental and cremation caskets when you calculate average casket sales, advises Eagan.  You'll get a better sense of your true casket average.

             TIP #3:  You've got to build more of your overhead recovery and profit margin into your service charge, not your casket markup.  Cremation and casket stores will continue to eat up what you  pocket from casket sales.  Yet you can't lose if you offer great service and have a justifiable charge for it.