I hope you enjoy the articles in this issue of our Newsletter. Your Funeral Coach is a Coaching and Mentoring Firm that lives in the funeral, cremation and cemetery services space. We offer a wide variety of affordable consulting options and have joined with some incredible companies to provide the very best advice and education possible to help owners and individuals grow themselves and their teams in our profession.
We appreciate you and our clients and hope that the winter months have treated you well. Funeral Service has traditionally been busy during this time, especially the first quarter of the fiscal year. Spring is a time of refreshing, cleansing, painting the buildings, planting the flower gardens, and putting many of our annual goals in place. How many of you have put your goals in writing and shared them with your team members? I know this last quarter was a busy one for most of you, yet now that it is Spring, it’s a perfect time to set up your goals and action plans if you have not done so already. Growing a business and growing leaders is not easy. With a compass like SMART goals, (Specific, Measurable, Action oriented, Realistic and Time Based) you will be able to accomplish them in good time.
Since Spring brings many showers that water and feed plants, trees, and waterways. Should we not be feeding ourselves with goals, feeding our businesses with growth ideas, and feeding our leaders with great training and support programs? “No time like the present” my grandfather used to say. In other words, what are you waiting for?
This month we hear from John Schmitz, CPA about inflation and how it will affect business and our personal pockets. What are you going to do about these increasing costs? Raise prices, raise salaries? Many of you must consider this as your costs have gone up and so have those for your people.
What goals do you have this year in growing revenue in the face of inflationary cost increases? Are your prices keeping up with inflation or are you more worried about the competitor next door than your shrinking bottom line?
Also included in this Newsletter, we hear from Sean Fagan of Leap Tie, LLC who speaks about tips and tricks to develop and track a marketing budget for your business.
In March we welcomed our newest Collaborative Network Partner, Graystone Associates whose article focuses on the importance of why we need to increase our revenue per call. It is more than just raising prices, even though part of our goals this year should be to nudge them up a bit more than expected. It is about teaching and training our staff to properly present the service and product options you offer. This is where Graystone comes in with the comprehensive training programs and measurement tools they offer their clients. With over 100 clients in the U.S., Canada, and Southeast Asia, Graystone has the tools and management systems to help you “feed” and grow your business.
Founded in 2003, Graystone has close to 20 years of experience working with many of the best funeral service operators. These businesses include funeral homes, cremation providers, pet funeral homes, and cemeteries. With a combination of business experience and profession-specific knowledge, Graystone delivers improvements in both staff performance and business operations to the clients they serve. Graystone’s exclusive method of combining professional development with data analytics and actionable business insight is unlike anything in our profession. So much so, Graystone holds over 25 trademarks awarded by the United States Office of Trademarks and Patents. Graystone successfully helps their clients solve problems and foster growth in a continuous, sustainable way.
You can learn more about Graystone, their President, Scott Newton, and the Director of Business Development, Lisa Streiff, on our Collaborative Partners page at YourFuneralCoach.com
Last, we want to thank our readers and clients for spending time with us, on this newsletter, our blogs, listening in on our podcasts, and following us on Facebook, Instagram, LinkedIn and Twitter. We appreciate you and value you as professionals and caregivers that serve their communities during one of life’s most difficult times, the death of their loved ones.
This is a current hot topic on the news, blogs, etc. It is currently running about 8.5% this spring.
I think most of us didn’t believe the Feds (Bank and Government) when they kept saying inflation would be very transitory and then go back to the target goal of 2%. Anytime things rise, they usually stay up and don’t decline back So transitory was never going to happen. The definition I found by Chairman Jerome Powell in December was “The Fed has been using “transitory” to imply that prices rising at the current pace would not leave “a permanent mark in the form of higher inflation”. They are not using that term anymore.
So, inflation shows no signs currently of slowing down. To name just a couple of large companies realizing this, Starbucks and Chipotle announced that prices are rising at their locations, customers are not complaining, and more prices are on the near horizon.
Part of the reason for this is obvious – wages have increased, which everyone thought was great, and rents and food have increased dramatically. So, the buying power of this increase will soon be eaten up and the average person will be no better off than they were.
The reason to discuss this is that historically funeral homeowners have waited too long to make price adjustments or cost and labor efficiencies. Your casket and other supplier vendors don’t wait to raise prices for you. You either lose profit margin – which are slim anyway – or raise prices. And you can’t try to outwit your competition. Generally, if one starts to rise, others follow. But don’t wait to be a follower. The 7.5% is not going to go down (transitory) and in fact, will continue to go up for the near future (and hopefully not the long-term future as it did during the Carter Administration).
To avoid “sticker shock”, please consider doing some small increases to your prices. Better to have 3 or 4 price increases of a couple hundred than once annually increase of a thousand. Most funeral homes and cemeteries only do annual increases, usually when the vendors do. Even someone as large as the casket companies have to implement a short-term surcharge to help offset supply cost increases and inflation pressures.
It is never too late to make the increases your company needs to keep up with inflationary costs that will eat into your bottom line profits if ignored.
HOW TO DEVELOP AND TRACK A MARKETING BUDGET FOR YOUR BUSINESS
Most funeral and cemetery businesses I encounter do not have a structured marketing budget. In fact, most don’t know how much to budget, how much is too much, and they are not tracking anything well. If you don’t have a specific, structured budget for marketing, you do not have a marketing plan, but simply activity. This is bad for your business because poorly managed spending can affect the health of your business in different ways. These include being a factor in poor financial reports that will be examined when you aspire to add new locations or when you begin to look at different avenues of succession planning.
When I start working with a firm, one of the first things I do is to ask them if they have a structured marketing budget, or what I like to call a retrospective budget. The latter is where they ask their CPA, “What did I spend on marketing last year?” I ask this question gently and playfully because I know from experience most firms have the retrospective type and we laugh about it.
How to get started: The first thing to do is to go back a year or two and look at what you have spent on marketing, or which expenses you have called marketing. These expenses need to be categorized by type and by month. Any CPA can usually get your monthly expenses by vendor. I have a spreadsheet that I use structure this information into a proper budget format.
Analyze: Next, look at what was spent. Many things that funeral homes call “marketing” are really giving. There is a difference. You can do both, but they are separate. We also look for bad spending. This involves obvious mistakes like yellow page spending. Not so obvious mistakes are paying to get exclusivity on apps, or gimmicks like reputational badges and licensed brochure content.
Calculate: After we have established what you have generally been spending, we calculate what your budget for marketing should be. This comes after assessing your competition, your market, and clearly defined objectives that are measurable. We have often found that firms are overspending on marketing. A general rule for calculating a number is that it should be in the range of 3% to 8% of gross revenue. Most firms are 4% to 5%. A firm that grosses $1.5 million, might be looking at a budget of $60 - $70,000. Several factors determine whether a firm should be budgeting higher or lower than that range.
Allocate: Once we have stripped out wasteful spending, identified overspending, and correctly allocated some spending as “giving,” we take the number and start putting it toward the things that will best help us reach defined objectives. Those can vary widely, as objectives can be completely different for two similar sized firms.
Measure: Very few firms are measuring returns on ad spend. That goes along with not having a structured budget in the first place. Very often, we find firms working with marketing vendors who don’t give meaningful reporting. Clicks, click through rates, costs per click, visits, bounce rates etc. are all measures of activity, not results. Good measurement looks like knowing how many leads were acquired, from which efforts, and what happened to them.
As you can see, creating and tracking a marketing budget is not difficult if you have the right tools and the right partner. The right partner will give you the tools and be a good accountability partner. Leads and opportunities should be going into a CRM or noted in a phone log so that you can get an idea of how many of your opportunities you are converting, and which spends work best.
Working with roughly 110 family-owned funeral homes across North America we can safely say everyone should be up on volume and therefore revenue since March 2020. Most recently, we have seen more families choosing services again along with their burial or cremation. But compared to pre-March 2020 there is still a national spike in direct cremation, direct burials, and gravesides and all in one day events in general. This mix shift poses challenges for revenue and therefore cash flow. Given the high call volume from the last couple of years people have not felt this mix shift in their revenue and cash flow. Not only was volume at record high levels, but the addition of PPP money and other government programs have created a financial safety net allowing revenue per call to be out of sight out of mind.
We are now seeing volume return to more normal levels starting about Mid-February. There are plenty of grand theories that we may be entering a long-term volume surge from the aging baby boomer generation, but do not assume this is a sure thing in terms of timing. Hope isn’t a strategy. Remember, too, many of those boomers will elect simple services and not necessarily traditional burials so yes volume will help but be prepared for ongoing changes in mix shift and the need to clearly understand revenue performance within service types.
We can’t emphasize enough how important it is to make sure you’re taking time to study and action item your revenue per call opportunities. Yes – it is time intensive and many funeral home owners and managers do not consider themselves numbers people. However, as a business owner you have the responsibility to make sure you or someone on your team understands how to review revenue by service type and then communicate successes and opportunities with your arrangers. Dedicate time, now, to start a concerted effort to improve revenue per call. Start with:
·A review of all strategic pricing options, packages and a la carte charges. Charge for what you do and confidently explain the value proposition of your services, so client families understand what they’re paying for and value it.
·Audit contracts post arrangement conference for errors, omissions and unnecessary discounts and giveaways. Provide immediate feedback good, bad, and indifferent to all arrangers. We find people want feedback on how they’re doing so take the time to provide objective, unemotional commentary on actual results.
·Analyze consistency among the team and find top performers in all areas including service fee recovery and all merchandise sales. Know your results by location and by arranger and hold people accountable to targeted goals.
Those with the best track record of maximizing revenue per call focus on it consistently. It’s not an annual exercise but something firms should always be reviewing monthly, or at the very least, quarterly.
Graystone helps over a 100 firms with these type of reports and the training that accompanies them.
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