Blueprint to Preneed Success

BY QUINN H. EAGAN

  Thousands of families are changing their allegiance from the Funeral Home they previously used. Hundreds of Funeral Homes are beginning to serve fewer families. Every day, Funeral homes are losing ground to direct cremations, alternative burials and competitors. One major problem is this: funeral homes defy traditional marketing strategies and systems. When families experience a death and need to choose a funeral home, superior service, location, or pricing matter less than abstract feelings of comfort and familiarity. For funeral businesses to grow over the long term, well-defined systems of marketing must be in place prior to a family’s need for services and selection of a funeral care provider. The alternative is shrinking market share; status quo is no longer an option. 

  While every funeral home has a system to care for families after the death of a loved one, few have an easy to use, successful preneed system. Most often, the atneed system is not written, but simply imbedded in the tradition and heritage of the operation: “This is the way we do things.” The typical home, therefore, is content to rely on tradition, with few dedicating the time to improving or building their consumer bases in advance of their needs. Most don’t have a blueprint for improving their pre-need marketing strategies. And this can lead to a business disaster. 

  Growth requires organized systems. About 24 years ago, Craig Henry, Mike O’Dwyer and myself began the task of figuring out how to grow funeral home volume for my family-owned multi-location operation in New Orleans.  To do that, we concentrated on formulating effective preneed systems. Our goal was to create systems that were easy to use, and continually put us in front of interested families. We began by keeping a notebook of all the reasons families told us “no” and constantly worked on how to change the “no’s” to “yes’s” for the future. The proof of our success would come, as the yes’s eclipsed the no’s as our business grew without telemarketing or high-pressure sales. 

  To our delight, the systems worked. Soon, we were writing three pre-need contracts for every at-need family we serviced. And it seemed to work for others too. We passed on our lessons to select progressive funeral homes in 27 states and across Canada. All were able to use those same marketing systems to increase their success and growth.  

  Successful pre-need marketing systems represent an organized, structured approach, requiring discipline and continuity. But they are also teachable and sustainable. Most funeral homes can easily adapt these systems and see a significant increase in funded pre-need contracts. It works almost magically, based on a simple, six-step philosophy:

1.  Follow up immediately with families who tell you “I want to come talk to you about preplanning,” but never do. 

2.  Your pre-need average should be equal to or greater than your at-need business. Sell a higher funeral amount on each pre-need contract. 

3.  Improve closing rates, by getting more families you present, to prearrange with you. 

4.  Assign, hire and/or train more dedicated pre-need counselors. 

5.  Decrease the length of time from prospecting to completing a pre-need sale.  

And most important,  

  When analyzing methods for getting your pre-need counselor to spend more time in front of families, consider that this is how a typical counselor spends most of his or her time.

Here’s how we changed our priorities – what we call the PFP Marketing System:

   Many funeral homes are unsuccessful having a full-time counselor spend most of their time talking to families about the advantages of pre-planning and never achieve satisfactory results. Many counselors spend their time seeking families. At the same time, thousands of dollars get wasted on ineffective advertising campaigns that do little, while homes leave themselves vulnerable to losing market share instead of capturing it.  

  Other funeral home owners are lulled into a false sense of security, because they do write some pre-need contracts. Often, far less than what is needed to grow their market share or even protect existing clients. 

1. Redirect advertising money into an effective direct mail campaign.

   Most funeral homes spend a significant amount of money on advertising with newspapers, radio stations or direct mail, but seldom measure the yield of those campaigns. That can lead them into an expensive trap. Using a proven direct mail piece can generate maximum performance from every dollar spent. This year, 35 percent of all Americans responded to direct mail advertisements. Direct mail sales are predicted to grow to $402.8 trillion in 2006. It can even target specific audience demographics, with a highly

   But a direct mail campaign needs to work with prospects. Analyze your direct mail campaign to make sure it doesn’t just look good on your advertising agency’s drawing board or is one an insurance company wants to sell you. The customers are the only ones whose opinions matter. Only their vote counts. 

   Effective direct mail campaigns are those that have been tested repeatedly and substantially outperform all others. You would be amazed at how many more sales you can realize from the same effort by just changing to a more effective piece.

   It’s certainly worked for our homes, and those clients who tried our techniques. We estimated that one of our direct mail packages brought in five pre-arranged, pre-funded sales per week compared with two per week generated by our standard advertising efforts.  Better yet, three of those families had previously used our competitors. Now that’s growing a business!

   That kind of success required us to test the offer constantly, examining a variety of factors. Those include the color and size of the envelope, fonts, the color of the ink used on the brochure, the photographs used, reply card options, giveaways, and so on to improve on our most successful combination. Testing never stops and we continue our attempts to develop an even better approach. We even tested what day the piece should be delivered into a family’s home.

   The typical funeral home should receive a 400 percent return on their direct mail investment – a $5,400 output should generate $22,000 in commissions. A direct mail system (done correctly) continues to be the most effective type of advertising and consistently generates a higher volume of preneed sales. 

2. Seminars provide an opportunity to teach families about funeral planning in a non-threatening environment.

   Sponsoring a seminar with classes on various topics – say veteran’s benefits, wills, or Medicaid – will create a positive association between potential customers and your funeral home. But figuring out how to organize an effective seminar can be challenging – it took us years to find the right ingredients.

   Don’t try selling too hard at a seminar. People don’t want a sales pitch about pre-need funeral planning. Ask customers what topics are of interest to them in advance, and develop sessions on the most sought-after topics. They don’t like salespeople. But they do like educators. Bring in outside experts to talk about nursing homes and funeral arrangements. Make sure people are comfortable with the situation, by sponsoring the seminars in neighborhood locations, with groups of local families that know each other. It is important to have a large group, so when families look around the room, they feel psychologically validated. Seek organizations such as churches or civic groups to co-sponsor the seminar. Once people have agreed to show up, make sure the sessions are relaxed, informal and informative.

   Done correctly, a successful seminar will generate many pre-need contacts. But done incorrectly, it could become a very expensive nap session. We found enough demand for outside expertise to start running seminars professionally, using what we’ve learned about presentation and delivery, for funeral homes across the country.  If you need help, feel free to contact us. You can also check out www.consumeradvisory.org. 

3. Don’t assume that your job is complete when you leave the cemetery.

   After a funeral, the survivors are faced with challenging tasks, resolving unfamiliar matters – Social Security, bank accounts, pension funds, life insurance claims, beneficiary changes, etc. My grandfather built our business by helping families attend to the details that come after the funeral. But many homes today simply hand a book of How-To’s to survivors and send them on their way. 

  Meeting systematically with families after a funeral also helps sell new services directly. After all, arranging for their own funerals is one item on the survivors’ checklist.  We’ve received more thank-you notes for after-funeral services than for the funerals themselves. Plus, we protected the loyalty of our clients with each new contract we wrote. It’s based on a system that took years to perfect.

Conclusions

Establishing the right pre-need marketing systems helps allow you to service more families. But spending money does not make a system - don’t confuse activity with accomplishment.  Always monitor and measure each system constantly, to make sure that you are getting a good return on your advertising investment and can count the families you are winning over. And if you need help, you can always call PFP at 1-800-529-7729. 

  Here’s a short anecdote that helps explain my point. When we decided to build a new funeral home, an enormous amount of time was spent on finding the right location. Most people have heard the adage about location and real estate. But we also learned a story about another business that considered location paramount to success – Pizza Hut. Once the nation’s largest pizza chain, Pizza Hut focused on placing it’s restaurants at prime locations, and lost out to a rival (Domino’s) selling the same product, but with a more effective marketing system.