Industry Spotlight: Trends

In this industry spotlight, we want to highlight key insights on the trends occurring in our profession.

A trend is defined as “a general direction in which something is developing or changing”.  We use trends all the time and many are very clear to us.  For example, funeral home “Calls”.   If a firm over the past 3 years performs the following:

Do you see a trend?  No, not as it pertains to Gross Number of Calls.  But, drill down into the data a bit and look at the following:

Do you see a trend here?  Yes, the trend is that Revenue is declining and since case count is level, the revenue/call is therefore declining.

Looking at a trend and understanding it are two different matters.  For example, the trend above shows that Average Revenue/Call is declining.  Now, the analytical question is, “why”?

Let’s build out the top chart a bit.

We can now see the Average Revenue/Call trend could be facilitated by the increase in Non-Casketed Calls.  We all recognize that the average Non-Casketed Call generally produces anywhere from $1,500 to $3,000 less revenue on a per call basis.  That could explain the trend of less Revenue/Call.

But, other matters could account for that decrease in Revenue.  Look at the following chart.

The revenue generated by the use of Facilities and Staff as well as Staff and Facilities (on site or off site) for a Service, could be $1,000 to $1,400 in revenue per call.  Therefore a Direct Burial, even thought a casket is being purchased and maybe a vault (two charts above) will generate less revenue.  Keep in mind, Revenue from a retail item is not 100 cent dollars.  When you sell a casket for $2,000 that costs you $800, your profit is 60% of the revenue.  Service fee revenue is 100% of the revenue.  So, given the choice of losing $2,000 on a casket sale or $2,000 on service fees, the lost casket sale only costs you $1,200 lost but the failure to capture service fees cost you all $2,000!

This is a discussion on trends.  My point is maybe confusing.  Let me give you the bottom line… you need to see your trends clearly.  In running a funeral business you have so much data if you know what to look for.  We generally only watch a few points, but that is not enough.  As the owner, your job is to watch the data and interpret it –or- hire someone to help you.

Trends tells you “what” is happening.  The “why” something is happening, is a deeper dive and that is what we have the experience to foretell.  The “how” to correct the resulting trend, is where our experience of working with thousands of funeral home over four decades is our true value to you.  You are the “who” that will be at ground zero executing the changes.  Running a business is a fluid matter.  You got to constantly check the direction, speed and reason for the currents or you get into a rip tide!