Ask the Owners: What Sets a Business Apart?

Are You Part of the Death Care Industry or Are You Part of the Funeral Profession or Are You Playing in the Middle of the Road?

In our next installment of Ask the Owners, Diann Anderson, formerly of Anderson Funeral & Cremation Services asks you to consider what category your business model falls into.  She encourages you to pick one lane and get out of the middle:

What sets a business apart?  What drives a consumer to choose one business over another business that operates in the same sector? 

When it comes to purchasing real estate most everyone agrees that the biggest determination of a property’s value is “Location… Location …Location …”  Of course, there’s many more factors that must go into the decision, but most realtors agree that location is one of the most important aspects of a property.  When it comes to owning a funeral home, I will tell you that “Differentiation…..Differentiation…..Differentiation…” is the most important aspect of your funeral home business – not only for you as the owner, but also for your potential buyers when it comes time for you to sell your business.

We are continuing in our series of articles “Strategic Evolution Blueprint for Funeral Home Owners”.  In the previous articles we emphasized the importance of embracing change and having a “Strategic Evolution” blueprint.   In this article, I am going to talk about what I believe are three very different business models and encourage you to think outside the funeral home box so to speak and start thinking “What’s my Mission?” as it pertains to the operation of your business.

Where’s Your Mindset Right Now?  Are you going through the motions?

If you are an owner that has been just going through the motions and think that your mission is making it through one more day, I want to encourage you and tell you, you are not alone.  It’s so ironic that the brotherhood and sisterhood that we belong to as funeral home owners and operators is one of the most public positions and also the most isolating.  I can promise you that if we were all together in a room right now you would be hearing a lot of the same kind of struggles and concerns.  I hope that after you read this article, you may be able to take a giant deep breath, exhale, and start to take small steps to regaining your enthusiasm for your chosen profession and forward momentum in making positive changes to your business – a renewed sense of “I’m right where I’m supposed to be, and I have a lot to do before I’m finished.”

Being an overcomer mission driven business is my very favorite topic to talk about because it was transformative to Steve and I, both personally, and collectively as a couple working together in our funeral home business.  Being a mission driven business was literally everything to us.  It was the thing that kept “filling our tank” when everything was going great, but especially when we experienced difficult situations, and I can tell you that we had a lot of very difficult situations.  Our mission was the engine that kept us moving forward.  It defined every aspect of our business.  It was the force that energized us, kept us focused, and ultimately elevated our position in our community and the surrounding communities as the most trusted funeral provider and the leader in providing meaningful ceremonies.

Death Care Industry vs Funeral Profession

Rejecting the Dehumanizing Label “Death Care Industry”  – I don’t know how you feel about being in a profession that has been termed the “Death Care Industry”.    When I first started my career in the funeral profession, the term “death care industry” didn’t faze me because I came from a manufacturing business background and was used to business terms like that.  BUT…by the end of Day One of working in our funeral home I did not agree with the term “Death Care Industry”; in fact the term “Death Care Industry” became contentious for me.  I believe that it is an extremely dehumanizing label and connotates everything that is wrong with our profession.  This label dumbs down our profession to a commodity.

The Death Care Industry Label is used by many different businesses including cemeteries, memorialization product providers, body donation organizations, pet crematories and cemeteries, and mortuary supply companies.  The term really gained momentum in the 1980’s when cremation started to be accepted.  It also coincided with the 1984 FTC Funeral Rule and the influence that Jessica Mittford’s scathing book about the “funeral industry” called “The American Way of Death” had in our culture.   I could write a whole article about Jessica Mittford because I find her story quite fascinating and filled with ironic double standards that caused our profession to suffer some very negative ramifications.

“Words and terms matter” I would bet you have heard that phrase before.  I’m not an English teacher but I do agree that words and terms hold great power, and they are the beginning of transformation in our culture.  Words and terms shape the way we perceive, understand, and communicate concepts and ideas.  Using specific terms helps convey precise meanings and avoid confusion.  Your choice of terminology reflects your underlying values, beliefs, and perspectives.  Before I can fully unpack the idea of having a mission driven business, I think it’s very important to think about some of the terms in our profession.  Some of the ideas I’m going to cover may cause you to bristle because I’m going to be saying the quiet thing out loud so to speak.   My goal is to encourage you to step deeper into the funeral profession with a mission to help the survivors of loss take the necessary steps to regain solid footing as they step into their new reality of living without the physical presence of their loved one.

Definition of Profession and Industry:  It is important to understand the role and the difference between being part of a profession and participating in an industry.

Professions: Professions are characterized by:

• Specialized Knowledge and expertise in their field, typically acquired through formal education, training, and experience.
• Ethical Standards: Professions are governed by codes of ethics and professional standards that guide the behavior and conduct of practitioners, ensuring integrity, accountability, and professionalism.
• Regulation and Licensing: Professions are subject to regulatory oversight and require practitioners to obtain licenses or certifications to practice legally. This helps maintain standards of competency and protect the public interest.
• Client Service: They are expected to prioritize the needs and interests of their clients, acting in their best interests and providing high-quality service.
• Continuous Learning and Development Licensing Requirements: Professions require practitioners to engage in ongoing learning, professional development, and continuing education to stay current with advances in their field and maintain competency and licensure.

Industries: An industry is a sector of the economy that involves the production of goods, or the provision of services related to a particular field or activity. Industries are characterized by the businesses, organizations, and economic activities involved in the creation, manufacturing, processing, distribution, and sale of products or services within a specific sector.

“Quality is remembered long after the price is forgotten.” Gucci

“Stop Selling and Start Helping” Zig Ziglar”

“The art of marketing is the art of brand building.  If you are not a brand, you are a commodity.”  Philip Kotler

“People don’t buy what you do; they buy why you do it.  And what you do simply proves what you believe.” Simon Sinek

What Are You Selling?  Businesses are categorized as either selling a commodity or selling a  non-commoditized product or service.

A Commodity is:  A basic good or service that is interchangeable with other goods or materials of the same type and is typically produced and traded in large quantities. Commodity goods are generally considered to be undifferentiated products and services.  They do not possess unique characteristics that distinguish them from similar goods produced by other suppliers.  Commoditization:  Is the process by which goods or services become standardized and interchangeable, often leading to price competition and a loss of differentiation between products or services.

Commoditized Funeral Business :  If you had to choose one major attribute for a commodity driven funeral business, it would be pricing.  In a commodity business model there’s standardization of products and services with little or no differentiation in terms of features, quality or performance.  Commoditized funeral businesses are typically High-Volume Providers in the cremation segment of the Funeral Profession.  This business model is more successful when they operate in large demographic areas where differentiation is limited, and price competition is the driving force. Common elements to High Volume Providers are keeping their product offerings standardized with little to no interchangeability of product offerings, minimal customer engagement, high reliance on internet technology with consumer-friendly interactive website and payment options, focus on cost efficiencies, competitive pricing, and basic storefront or industrial settings.

Non-Commoditized Funeral Business:  If you had to choose one major thread that connects the non-commoditized business model, it would be “experiential” value-based products and services that have strong differentiation.  For the most part, this model is not price driven because it is highly specialized. Two different funeral business models fall under this category: Full-Service Provider and Customized Service Provider.  Non-commoditized funeral businesses can thrive in most demographic locations.  They tend to focus on strong differentiation, customer engagement and satisfaction to maintain a competitive edge in their market.  This business model does have the potential for higher profitability; however, success depends on effective differentiation.

Your Funeral Business Falls into One of These Categories

1. Commodity Business Model also called High Volume Provider
2. Full-Service Provider, a.k.a. Middle of the Road Provider
3. Non-commodity Business Model also called Customized Service Provider

So…What’s Your Business Model?  You Have to Pick a Lane

All three business models have market dynamics and competitive pressures in their respective business environments to contend with.  In this article I’m focusing on Full-Service Provider and Customized Service Provider because they are the two models that are consistently confused in our profession.   Do not be fooled, these are two very different business models.

Full-Service Provider:  This has become the description for “traditional” funeral homes that are trying to be all things to all people.  This describes a funeral home that offers different kinds of packages and discounts depending on the package.  This describes the funeral home that offers cremation packages at a discount to compete with the high-volume commodity business and also offers specialized funeral services at a premium price.  This also can describe a funeral home that doesn’t have a sound pricing strategy because they are trying to keep in step with all of the funeral providers in their demographic.  They are in the middle and their messaging is very confusing to consumers.

Customized Service Providers are Mission Focused – This category of business is very well defined because every aspect of this business is intertwined with its mission.  Common traits of Customized Service Providers are:

• Personalized Consultations: These providers prioritize in-depth one-on-one consultations with families to understand their wishes, preferences, and cultural or religious traditions. They take the time and every effort to practice active listening skills and offer guidance, ensuring that every aspect of the funeral service reflects the individuality of the decedent and their family. You might refer to these highly professional Funeral Directors as “Expert Guides” in their field.
• Flexible Service Offerings: Instead of rigid service packages, Customized Service Providers offer flexibility in their offerings. You will never hear “No” or “We don’t do that” as a response from a Customized Service Provider.   Of course, if it’s something that is impossible, illegal, or would cause an ethical dilemma, an Expert Guide would figure out a viable solution to achieve the family’s request.
• Attention to Detail: From selecting floral arrangements to designing commemorative keepsakes, Customized Service Providers pay attention to every detail to create a truly memorable and personalized experience. They understand that even the smallest gestures can have a profound impact on grieving families.
• Creative Expression: These providers encourage creative expression and innovation in funeral planning. Whether it’s incorporating unique themes, multimedia presentations, or unconventional venues, they strive to celebrate the individuality and passions of the decedent in meaningful ways.
• Compassionate Support: Beyond the logistics of funeral planning, Customized Service Providers offer compassionate support to families during their time of loss. They provide emotional guidance, resources for coping with grief, and ongoing assistance throughout the funeral process and beyond.
• Community Engagement: Customized Service Providers actively engage with their communities, building relationships and fostering trust. They understand the importance of being active participants in their local communities and supporting families not only during their time of need but also as they navigate the journey of grief.

If you are operating a Full-Service business model that could be described as having footing in both the Traditional and Discount Business models, you would be much better off changing to the Customized Service Provider model.  I say this from experience.  When Steve and I were deciding the direction of our business it was confusing because we found there was A LOT of “industry chatter” proclaiming funeral homes must operate in both business models.  That’s called operating in the middle of the road.

“One of the first things I learned as a child was that it wasn’t safe to play in the middle of the road.  Playing in the middle of the road is where you can be killed.” – Diann Anderson

The Funeral Profession Has Played in the Middle of the Road for Too Long and That is Why Funeral Home Owners are Burning Out and Consumers Are Confused – There are two dynamics that have greatly contributed to our profession’s struggle with differentiation.  The two dynamics are the dramatic rise in cremation and the internet.  Our profession has been notoriously slow to change and for many years viewed the rise in cremation as a trend that “won’t affect me”.  Well, it has affected all of us because we didn’t view it as a legitimate part of our profession until recently.  Unfortunately, because our profession dragged its feet pertaining to cremation, we have the uphill battle of educating a confused consumer.  For many years, the main marketing message for cremation has been that it is less expensive – much less expensive. Funeral homes used to be okay sending families to cremation facilities because it was a very small segment of their business.  When traditional funeral home owners finally woke up and realized that cremation was not only here to stay, it would be the norm and not the exception, they morphed into middle of the road business operators. Total confusion ensued and still exists for many funeral home owners.

In case you don’t believe me, read through this small list of adverse effects when a business tries to operate in the “middle of the road” and see if it resembles our profession.  I also want to stipulate that most funeral homes are located in small to medium size demographic areas.  Obviously, the larger the demographic area, the more opportunities there are to operate with different business models at the same time.

Playing in the Middle of the Road Causes:

• Market Saturation and Competition: A proliferation of funeral homes trying to cater to both ends of the spectrum tends to lead to market saturation. This increased competition can result in pricing pressures, reduced profit margins, and overall financial strain for individual businesses.
• Confusion for Consumers: As I mentioned earlier, operating from both business models can cause confusion for consumers. This lack of clarity may lead to dissatisfaction, as families struggle to understand the value propositions of different funeral homes and make informed decisions.
• Diminished Quality of Service: Funeral homes stretched thin by attempting to cater to both commoditized and non-commoditized markets may struggle to deliver high-quality service experiences consistently. This can lead to a decline in overall customer satisfaction and the reputation for our profession as a whole.
• Inability to Innovation and Adapt: Funeral homes trying to be all things to all people may find it challenging to innovate and adapt to changing consumer preferences and industry trends. Lack of specialization or clear focus could hinder their ability to differentiate themselves and stay competitive in the long run. Seth Godin says, “The reason it seems that price is all your customers care about is you haven’t given them anything else to care about!”
• Loss of Professional Standards and Ethics: Operating from both business models could potentially raise questions about professional standards and ethics within the profession. Funeral homes may face dilemmas related to transparency, integrity, and conflicts of interest when trying to balance competing priorities.

Attention Funeral Home Owner!!!!   Operating in the Middle of the Road is More Complicated, and Exhausting Do I need to repeat that statement?  You will be taxed on so many levels due to the complexities and demands associated with catering to a diverse range of client families while maintaining profitability and service quality.  You simply cannot be everything to all people, or as one of our sons would say, “You do not have the bandwidth to properly deal with the complexities of not choosing which lane you will operate your business.”  Or, you can think of it like being married to two people at the same time.  Would it be possible to invest adequate energy, time and resources simultaneously into each marriage to make both marriages highly successful? The purpose of your business is to create a customer and serve your customer better than anyone else in your market.

Operating a Mission Driven Customized Service Funeral Home is Energizing.  This probably sounds counterintuitive because on paper it looks like more work, but it’s not.  The requirement is to strategically map out your approach, aligning every aspect of your business with your core mission and values. By doing so, you create a cohesive framework that guides decision-making and fosters a sense of purpose among your team.

In a mission-driven environment, every task, from the initial consultation with a family to the final moments of a funeral service, is infused with meaning and significance. Rather than viewing each funeral as a transaction, you approach it as an opportunity to make a meaningful impact on the lives of those you serve.

This sense of purpose not only fuels your own enthusiasm but also resonates with your community. Families are drawn to your funeral home because they recognize your commitment to honoring their loved ones in a deeply personal and meaningful way. They appreciate the attention to detail, the compassionate support, and the creative expression that characterizes your services.

Moreover, operating a mission-driven funeral home cultivates a positive work culture, where employees feel motivated and fulfilled in their roles. They understand the importance of their work and take pride in their ability to make a difference in the lives of others. As a result, they are more engaged, productive, and dedicated to delivering exceptional service.

In essence, operating a mission-driven customized service funeral home is not just about providing funeral services, it’s about making a positive impact on your community and leaving a lasting legacy of compassion, empathy, and dignity. And in doing so, you’ll find that the work itself becomes its own reward, energizing you and your team to continue serving with passion and purpose.

Thank you for reading my article and I hope that you have found something to implement that will help you move forward enriching your business and the lives you touch.  I am looking forward to continuing this journey with you and sharing more insights and expertise in our next exploration. You have but one life to live and you have been placed in this timeline of history for a purpose.  What you do each day matters and has the potential to make a positive difference in the lives you touch. If you have a question or need a boost in moving forward, please call me at 815-299-0100 because I would love to help you achieve your goals.

With warm regards,

Diann Anderson