Ask the Experts! Your questions about expanding your business answered by Foresight!

We were recently asked what the process would entail for a successful business owner to now branch out and explore new business ventures, specifically Pet Services. John T. McQueen, CFSP, Director of Client Experience provides some insights on how to expand your business and where to begin.

Question: My family and I have been running a successful funeral home for many years. We have begun to look into new ventures to expand our business and are interested in pet services. What advice can you offer us and where do we begin?

John T. McQueen: Pet services can be a great addition to your funeral home offerings, but it must be well-thought out and planned.  There are also three basic models you can use to start a pet business – pet burials, pet cremations, and combination.  Most funeral homes that start a pet burial business, or the combination option, typically own a cemetery or have strong ties to a local cemetery that allows for pet burials.  The most common pet option that funeral homes choose to offer is pet cremation services, which will be the option focused on in this article.

There are a multitude of considerations that must be made when beginning any new venture and pet cremation is no different.  This article will focus on some of the major considerations, but will not touch on the entire process, and should not preclude the hiring of an industry consultant to guide you through the process from feasibility to implementation to expansion and beyond.  Our team at Foresight is well-versed in the financial, legal, operational, and marketing aspects of pet services.

Legal Considerations – Begin by investigating your individual state laws on pet cremation.  Many states have little or no laws governing the disposition of pets.  However, in 1996 when my company opened a pet cremation business in Florida, the only law governing pet cremations stated that a pet crematory could not be co-located within a human crematory.  For us, this required some re-working of our plans, and the construction of an additional annex adjacent to our human crematory.

Community Acceptance – This is not a hard and fast rule but is a worthy consideration before investing in the development of a pet cremation business.  Do you live in a rural, urban, or metropolitan community?  In rural communities, many families still bury their pets on the farms, so paying for such services may not be a feasible alternative.  In urban areas, the acceptance rate will improve significantly as does the opportunity for success.  In metropolitan areas, pet services are a given, but competition among providers will also be more widespread.

Market Saturation – Another important consideration is market saturation, i.e. how many other pet cremation providers, or more importantly funeral homes offering such services, already exist in your marketplace.  In many urban markets, veterinarians’ contract with “wholesale” pet cremation providers that may be located many miles away from the community the veterinarian serves.  Most wholesale providers operate on what we call a “milk run” cycle where they pick up deceased pets from the veterinarian one day per week, and then they return the cremated remains the following week.  Depending on when the pet dies, it may take up to two weeks for cremated remains to be returned to the veterinarian’s office.

In addition to the wholesale operators, does your community also have retail pet cremation providers?  There are several franchised providers, as well as independents, operating in communities throughout the United States.  A thorough understanding of their processes is important when developing how your firm will differentiate itself to compete for the customer base.

Lastly, there are many funeral home providers that are entering the pet cremation marketspace.  Will you be the first to market, or are you much further down the provider list?  With specialty services such as these, being first can have some hurdles to overcome, but can also reap tremendous strategic advantages.  Being the early adopter is my preferred method but entering the game later does not prohibit you from being successful, but it will be an uphill climb requiring some well thought out differentiation factors.

Crematory Selection – Will you be performing the pet cremation in your own pet crematory or will you be outsourcing them to a third-party crematory?  In-house cremation will require additional upfront capital and development time but has many advantages to using a third-party crematory.  A few of those advantages include controlling the cost per cremation, chain of custody for pet, and owner witnessing of cremation process.

When considering your options, you will also need to consider the type of pets you want to cremate.  Most funeral homes that offer pet cremations focus on dogs, cats, birds, and other relatively small animals.  However, if you are in or near an equestrian community, you may want to consider cremating horses or other farm animals.  Of course, this will influence the type of cremation equipment, manpower, and other such considerations.

If you choose not to build your own pet crematory, but choose to use a third-party crematory, you can still have a viable business option.  My pet crematory handled the pet cremations for another funeral home colleague outside of our immediate trade area.  Just like on the human side of your business, you’ll want to visit the crematory, ensure you have proper procedures in place for maintaining custody of the pet and the cremated remains, as well as options for client confidentiality.

Crematory Equipment – If you are installing your own pet cremation equipment, there are a multitude of companies to choose from in the cremation arena.  Most human crematory manufacturers also offer pet cremation equipment.  Consideration should be given to budgetary constraints, maintenance, size of the unit for type of pets to be cremated, average cremation cycle time, as well as the types of cremation you intend to offer (i.e. individual, private, communal, or a combination).  The team at Foresight can help you find the right manufacturer to fit your individual needs.

Branding – This is one of the biggest decisions you must make when contemplating entering the pet cremation business.  Is the purpose of your new venture to be a stand-alone pet business offering services to your community, or is it intended to aid in the marketing of your existing funeral business and expansion of the funeral homes market share?

Historically, the industry is somewhat split on how to brand your new pet business.  Some experts say that the pet business should have its own name and identity separate from the funeral home enterprise.  There can be advantages to this option, especially if you are wanting to open a new venture that is exclusive of the funeral home.  Also, some experts feel that a separate identity is good from a legal standpoint should you have legal issues with your pet crematory, perhaps providing some separation between the pet crematory and the funeral home.

On the other hand, if your desire is to grow market share and awareness of the funeral home through the addition of pet services, I prefer the co-branding of the pet business with the funeral home.  For example, when we opened our pet business, it was called Pet Passages by Anderson-McQueen.  (Note: the name Pet Passages is now a registered trademark of Pet Passages, LLC, owned by Mike Harris, and available under licensing agreements).  I prefer the co-branding option for several reasons, here are a few:

• Credibility – When marketing your services, especially to veterinarians, you will be the new guy or gal on the street, so co-branding with the funeral home will give your new business instant credibility because of the reputation of the funeral home.
• Loyalty – As your pet business continues to grow and prosper, it will provide customers with a constant reminder of your funeral home operation. As we all know, most families only intimately experience a human death two or three times within a lifetime.  Even if we factor in distant relationships (aunts, uncles, cousins, etc.), our funeral home experiences are far and few between, making the market ripe for others to capture a family you previously served.  However, pet services can provide you with the opportunity to touch families more often, solidifying the relationship between customer and funeral home.  Think about how many families have pets, or even multiple pets, with the average life expectancy for pets between 7-10 years.  By co-branding your pet business with your human business, you can continue the relationship of trust and improve retention rate, not to mention secure new funeral home calls from previous pet clients.
• Cross Marketing – By co-branding your pet business with your funeral home business, you can promote both options at many of the functions in which you advertise. As an example, we would market that we were “Proud to serve your ENTIRE family” and use both logos on many of our marketing pieces.  We would also promote that “pets are part of the family too” and market both companies.  In addition, pet services can secure free advertising for your funeral home too.  Local newspapers or television stations are looking for that “feel good” story and pets are near the top of their list.  If you are the first funeral home in your market to provide pet services, this is a newsworthy event, especially if you have some form of differentiating factor, such as a goodbye option for pet owners.  Often, the free publicity will be significantly better than anything you can buy from an advertising standpoint.

Service Options – Another decision you must make is whether you want to offer your services only on a retail basis, a wholesale basis, or both.  Some funeral homes market their services solely in a “direct to the public” format.  Although this option may result in a higher per ticket sale, it can diminish the volume needed to adequately cover overall cost and reduce possible market growth opportunities.  Offering wholesale cremation services only requires an extensive network of veterinarians to provide enough volume to make the process profitable.  A combination of retail and wholesale is the best option in my opinion based on personal experience and here is why:

• Gatekeeper – Veterinarians are the gatekeeper in pet loss services in most communities, consider them the “hospice” of funeral service for pets. Offering wholesale services to local veterinarians will provide you with a constant stream of business.  When a pet owner loses a pet, they typically call the veterinarian in search of what to do, and the veterinarian tells them to bring the pet to them.  Veterinarians tend not to upsell their customers on enhanced cremation services, but they do mark up the wholesale charges.  It seems most veterinarians provide cremation services to clients as a service, but they are not looking to be associated with death.  Instead, the veterinarian is trying to remain relevant to their customer, knowing that in most cases the customer will secure a new pet, and they want to remain the veterinarian of choice.  Most veterinarians, like funeral directors, are slow to change and they are used to the wholesale pricing models.  Therefore, we need to provide them a reason to change, such as enhanced client services, while being cognizant of their preferred method of operation.
• Retail – Through the promotion of your new services, you will secure families directly. For these families, you will want to service them at a retail price point.  Many providers still follow the weight / pricing model which entails a separate price category based on the weight range of the pet, such as small, medium, and large pets.  You may also want to implement a pricing option for what is called a pocket pet, one which is under a pound.  The retail option will afford you the best opportunity to upgrade the urn or offer other services such as family goodbyes, cremation witnesses, and more.
• Market Share – As mentioned earlier, if your goal is to increase market share, offering a combination of both retail and wholesale will allow you to build a database of clients more quickly. Understand that your veterinarians can be somewhat cautious of providing too much client contact information, but many times the customer will contact you directly and say they used their vet but then found great comfort when learning that their pet had been handled by your funeral home.  Also, it was not uncommon for us to hear that the reason a family chose our funeral home for their loved one was because we had handled their pet previously.
• Marketing – We would include all families (pet and people) on our newsletter mailing lists at the funeral home. We made sure to include articles in the newsletters that covered topics for both families.  Our holiday help and grief programs included both pet families and people families and were well attended by both.

Segregation or Integration – Some funeral homes prefer to keep their pet families segregated or separate from their human families.  In these cases, they will either have separate facilities for receiving the pet families or they will have a separate entrance for the pet operation.  Other funeral homes prefer to integrate their pet families into their operation fully, making no distinction between the two.  There can be advantages to both, but personally, I prefer the integration model as opposed to the separation one.  Both families, human and pet, have suffered the loss of a loved one and should be cared for with the same dignity as respect as we would care for any family.  However, by integrating the process, you also have an opportunity to showcase your facilities and staff to families who otherwise may not experience it.  Remember, if your goal is to grow market share through pet services, it will be necessary to allow families to “see” what makes your firm special.

I know, you are thinking “what if a family walks in carrying a dead pet?”  They will, and your team needs to be trained on how to handle it, without making them feel out of place or unwelcome.  The proper training piece is vitally important to the success of the program, and the growth of future business, because pet families can and will be some of your strongest advocates, provided they are made to feel welcomed.

Personnel – A common question asked is “Do I need to hire additional staff?”  In the beginning our answer is typically “no”.  That said, please understand that many in the funeral profession did not enter it anticipating they would be handling dead pets.  Therefore, you may experience initial push back by some staff members.  It requires a lead from the top mentality.  As staff see firsthand that you, as the owner or manager, are willing to roll up your sleeves and handle pet intake, they too will become more willing to handle deceased pets.  Also, most funeral directors enter our profession from an altruistic belief, in other words, they want to help people who are grieving.  As they begin to see a pet family’s profound sense of loss, and the comfort they provide to the family, along with the multiple thank you notes afterwards, attitudes will begin to change, as will their willingness to serve pet families.  As your operation grows, it may become necessary to add additional staff to handle the cremation process, and perhaps a dedicated pet transfer person to serve the local veterinarians.

It is my hope that this has answered your immediate question pertaining to the implementation of pet services to your existing service offerings.  For more specific questions or to schedule a Strategic Performance Analysis on the implementation of a pet business, you can call us at 602-274-6464 or email us at info@theforesightcompanies.com and our team will gladly assist you.

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