Cremation School is in Session

For tens of millions of kids around the world, the new school year has begun. But why should students have all the fun? CANA’s here with the 3Rs to start the (school) year off right for your business!

Reading: Data Tells a Story

I had the opportunity recently to present to a small classroom of savvy cemetery and funeral home managers. They hailed from nine states and represented a mix of nonprofits, for-profits, and combo business models. It was a remarkably diverse group that had one common struggle – getting good data out of their businesses.

And why is good data important? Our business data tells us our past, sets expectations for our present and, if we’re lucky, can help predict the future. For instance, CANA’s research has taught us that so-called “direct cremation” consumers opting for no service are actually just choosing not to plan an event with the cremation provider and are conducting services on their own. CANA’s statistics data has helped us plan for a future in which cremation is the preference for a majority of consumers. Time and again, data from CANA and others has proven that the #1 reason consumers choose cremation is no longer price but personal preference.

Cremation is the new tradition. It’s here to stay. What does your business data say about that? By now, you should know exactly what it costs to cremate a body along with all of the attendant administrative expenses. If cremation is a cheaper option you offer, it validates the public’s decision to keep up their tradition. Hence, the question I put before the class: Will you make it financially sustainable?

‘Riting: Disruption and Profitability / dis·rup·tion and prof·it·a·bil·i·ty

Business models change. We live in a world where disruption is a business model and a widespread career goal. Think about how frustrated you are with new employees constantly asking “Why?” They aren’t disrespecting you. They are genuinely interested in understanding and also finding efficiencies and new ways to serve.

CANA members have figured out how to make cremation profitable – and it can require disrupting some long-held processes. It comes down to a few simple rules:

• Change your business model.
• Offer services that people want.
• Practice personalization in those services.
• Present merchandise options that support the services and personalization that your families share with you.
  

This is easier to write about than it is to actually do. This kind of change is hard and time consuming. But, since urn sales will never replace casket sales, it means you must focus on services. Cremation families definitely memorialize their loved ones. The question is whether they will choose to do so with or without your help: your planning skills, your chapel space, or your cemetery placement.

There is a continuum of cremation providers serving families, and you may own businesses at every point of that continuum, from online arrangements and storefront branches to brick-and-mortar full-service funeral homes on cemetery property. Or perhaps you only own one or two along those lines and are considering opening more. Or you could be in the uncomfortable position where your business offers cremation subsidized by casketed burial. That is the worst-case scenario, but it’s not irreversible.

In order to sustain your business and serve your community, you need to seek sustainability and one element of that is profitability. Regardless of the size and scope of your current business, profitability pays your employees, feeds your family, and seeds future growth.

‘Rithmatic: Get Out Your Calculators

Now we’re back to our company data and your homework assignment. Fortunately, it’s open book and you can turn to your neighbor for help. In fact, I encourage you to talk about your data, your challenges, and your success with the colleagues you trust. Our classroom was a great spot for discussion and so is the upcoming CANA Convention – anywhere you can network with professionals with experience in what you’re working to achieve.

The remainder of this post is a series of questions for you to ask your accountants or attempt to find among your spreadsheets and software. I propose this process:

1. Benchmark – what are your state/provincial, county, regional or market numbers? CANA can help with some of those statistics, but so can local resources like your library.
2. What are your cremation numbers? At a minimum, measure cremation calls – direct and with services or merchandise sold. Bonus points for calculating average revenue per cremation contract and discussing these numbers with your team.
3. How do these numbers align with your strategic plan? Are you valuating your business for a generational transfer or sale? Or maybe you’re a new owner servicing a lot of debt? The solution to all is maximizing revenue and lowering expenses.
4. How can you maximize revenue, keep expenses down, and maintain your high level of service to your communities? I don’t have an answer to this one, but you will find the right solutions. Note the plural – solutions – it may take some trial and error.
5. Tell your story – you will not sell what you do not market. Are you spending more on marketing your low-cost options, and are you surprised that is what you are selling?
   

Below is the worksheet I created for class discussion. Challenge yourself to answer as many of these questions that apply to your business as possible. Think about and discuss the questions with your advisors and staff you trust. Attend a CANA meeting and network with attendees to learn new strategies. Then repeat in future years.

Homework for Funeral Home and Cemetery Owners and Managers

Complete the following worksheet to the best of your ability. Prepare to discuss with your leadership team, accountants, etc.

Complete as much as you can based on your business operations. If you can’t complete a question, ask yourself why.  If you aren’t currently tracking that information, consider starting to do so.

NOTE: All questions are related to cremation cases only.

Funeral Home

1. Number of cremation calls to date in 2024:
   1. _______ cases
   2. _______% of total cases (cremation + burial)
      
2. Total cremation revenue to date in 2024: $_________
   

Now, gather the same information for the past three years.

1. What trends emerge?
   1. How many cases were embalmed?
   2. What was your service revenue?
   3. Merchandise revenue?
   4. Cremation profit?
   5. What was your average cremation contract?
2. List the most popular things sold beyond cremation disposition. (i.e. urn type, keepsake, etc.)
   1. .
   2. .
   3. .
   4. .
   5. .

Cemetery

1. # of Cremation interments or inurnments to date in 2024: _________
2. Inurnment rate of cremations performed by your cemetery to date in 2024: %_______  #________
3. Inurnment rate from other cemeteries/crematories? %________       $ ________
   
4. Cremation Profit: Show your work!
5. How much have you spent on marketing cremation and/or cremation memorialization to date in 2024? $__________
   Now, gather the same information for the past three years.
6. What trends emerge?

Questions for further discussion:

1. What do these numbers tell you? Were you surprised? Validated?
2. When looking at cremation contracts, were there differences among staff members? Why?
3. What is your embalming/cremation ratio?
4. How is technology creating efficiencies and lowering costs?
5. Cremation Marketing efforts – what works for you?
6. What are your bestsellers regarding merchandise?
7. Who are your competitors and what do they offer?
   

Coach Kemmis Closing Remarks

In my family’s experience, cremation was a form of disposition that initially solved a dilemma and quickly became a family tradition. We didn’t “believe in it” or think about it much at all, but when my family made the switch 30 years ago, we did spend money, time and other resources on the services surrounding the cremation… just not with the assistance of death care professionals. I think this dynamic is more common than ever but does not support business sustainability.

The key to sustainability is changing that DIY dynamic and remaining relevant to cremation customers. Many of you are working in funeral homes and cemeteries with generations of experience and it must be maddening to provide the same services you have traditionally offered but with different results. Cremation has changed the equation for many death care businesses. Now that you know your numbers, break it down further to understand how cremation has specifically impacted you so that you may effectively respond.

Demonstrate your cremation expertise and the value that accompanies the disposition services you provide. Our profession is not easy, but that isn’t the goal. The goal is to make the hard things – like, serving an ever-changing customer base while sustaining a business – possible. You make the hard things bearable for your families every day, and you deserve the same experience.

Remember that you don’t have to face this change and these hard things alone. You can turn to your neighbor for support there, too. Looking for a bit of community? You can find it in a Convention, a peer support meeting, or on the other end of the phone. Looking for some inspiration on handling the hard things better? Duke University head coach Kara Lawson provides some words of encouragement.

We can handle hard better together.

With special thanks to my class at ICCFA U for being open-minded, asking questions that challenged, and engaging in thought-provoking discussion.

Barbara Kemmis is Executive Director of the Cremation Association of North America. After more than 20 years of experience in association leadership, Barbara knows that bringing people together to advance common goals is not only fun, but the most effective strategy to get things done. A Certified Association Executive (CAE), Barbara previously served as Director of Member Services at the American Theological Library Association and Vice President of Library & Nonprofit Services at the Donors Forum (now Forefront).

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