Written by Jarod Bernat, Senior M&A Analyst
Over the past few decades, we saw the introduction of the FTC rule requiring funeral homes to provide families with GPL’s when requested, the introduction of the internet providing a whole new interface with consumers, and the newest FTC rule requiring online access to GPL’s in some states. Given that the industry is well-known for not being early adapters to new technology or trends, it is no surprise that there has been significant pushback to the utilization of the internet to display pricing within the profession. Business owners fear that when prices are posted online, they will be compared to their competitors, and prices will become a race to the bottom. But while this may seem like the only possible conclusion at first glance, there is much more to consider as the internet can really be a massive opportunity to those who harness it properly.
Let us think through a typical shopping experience for a moment: You are shopping for an office chair online. There are three chairs you are considering – Chair #1 is a cheap chair listed on ebay.com. This option only costs $55, has no description of the product, has no reviews, and the sale is final. Chair #2 is a nicer chair on Amazon.com. This option costs $400, has the manufacturer’s description of the product, and has a few positive reviews. Chair #3 is a top-of-the-line HermanMiller Aeron Chair. This option is $1,400 and has hundreds of 5-star reviews, a detailed explanation of the various benefits of the construction and features of the chair, is fully customizable, and offers a comprehensive 12-year warranty.
Of these options, the “cheap” chair is NOT purchased most frequently. “But it’s the cheapest!” you might say. While this is true, the minimal information about the product, lack of reviews, and non-existent warranty combine to leave the consumer with almost no confidence in the product beyond the “cheap deal”. Chair #2 has a higher demand than Chair #1 because the description and reviews provide the buyer with comfort in their purchase. They know they will get a good product from a reputable seller.
Now, knowing that Chair #3 is $1,000 more expensive than Chair #2, would you even expect ANYONE to buy this chair? Using our earlier logic about comparing funeral prices, you would say no. But there are in fact many eager buyers of Chair #3! This is because HermanMiller conveys their value proposition of their premium chair to customers so effectively. How? By providing numerous pictures and videos of the chair on their website. They have extensive descriptions about each intricate detail of the chair and how the benefits and quality of the product substantiates the price. You can tell serious investment and care went into the research and production of the Aeron chair. Additionally, hundreds of positive reviews from previous buyers validate every claim touted on the website.
This same principle can be applied to our industry, and those who have already done so have started to reap the benefits. Stop worrying about price shoppers choosing a competitor over you due to pricing alone, because shoppers are sophisticated enough to understand differences in value. By properly conveying the value of your services to your customers, they will justify paying a higher price for a higher-quality service. To capitalize on this, here are a few helpful tips to consider when investing in your internet content:
- Add your packages to your website and provide clear descriptions – While some states require GPL’s to be posted online, 95% of families will not understand what each line item is based on the GPL alone. By adding summaries of your packages separate from your GPL on your website, families can better understand what options are available to them and what additional value is added at each service level. This is perceived as having “transparent pricing” which is viewed favorably amongst consumers. According to our 2023 Funeral and Cemetery Consumer Behavior Study (FCCBS) results, 70% of consumers stated that their trust decreases if prices are not online. In a time where the price of almost anything can be found online, our industry continues to raise red flags with consumers when clear upfront pricing is not offered. Furthermore, customers find added value in transparency according to the 2023 FCCBS. Consumers reported being 35% more satisfied with their experience and spending 16% more on average when they believe the profession is being transparent.
- Add Customer Reviews to your Homepage – Customer reviews are helpful to any business when they are plentiful and positive. This establishes that your quality of service has been recognized and confirmed by those you have already served. In fact, customer reviews have become so important that our 2023 FCCBS confirmed that 53% of consumers do not purchase products from companies that do not have good online reviews. Knowing this, you can add a simple plug-in to your website to display your Google, Yelp, and Facebook reviews directly on your homepage. Providing immediate validation to claims of quality upon first introduction to the business substantiates your value proposition and inspires confidence in your customers.
- Distinguish Yourself from Your Competitors – Get creative with how you show your families that what you do is more valuable than what anyone else does. As noted in the first tip, providing clear descriptions of your services educates families on what each package truly includes. Record a short video describing what is included in a “Cremation Memorial Service Package” and briefly walk them through an example of one. Describe the history and lineage of your business in video and pictures. Highlight your premier-quality staff with biographies or brief interviews. These all add a personal touch to your website and offer multiple opportunities to connect with your customers before they even walk in the door.
The options are endless when it comes to conveying your value proposition to the families you serve, but it must be done one way or another. The quality of your service, as judged by your customers, starts with their first introduction to the business. 90% of the time these days, that introduction is made on your website. If you can prove your worth and promise quality from the very start of the interaction, your prices will be justified from the start, and your families’ trust will be strengthened.