Not to get too morbid here, but one in every 113 people in the world will die this year. This is bad news for the majority of us unless, of course, you’re a funeral home operator.

 

With the global population increasing, one might assume that death-related services represent the quintessential growth industry. But success in the funeral industry, unlike the end itself, is anything but assured. Like any sector, there are a number of forces that dictate the ebb and flow of the market.

 

Take the quickly greying Japanese population. According to the Mitsubishi Research Institute, by the year 2020, the Japanese funeral industry will become the country’s largest business, outpacing the automobile and dental care sectors. Based on these estimates, it will gross US$34 billion annually at a rate of 1.7 million funerals per year, with $20,000 as the average cost for a basic funeral.

 

This stands in stark contrast to the United States. With baby boomers still many years away from reaching the pearly gates, competition is fierce and green burials are gaining in popularity. America’s roughly 23,000 funeral homes are facing a much grimmer situation than their Japanese counterparts.

 

To survive, funeral businesses in the US are turning to market research. It’s not uncommon now to see funeral homes conduct focus group research to identify and cater to new customers, such as the growing population of Hispanics.

 

But catering to minority populations is just part of the equation. To endure in the funeral business, marketing has to be undertaken with care and sensitivity.

The sixth sensitivity

Death might be seasonal (it happens more in colder months) but marketing is a year-round task. Yet, funeral homes are stuck between a rock and hard place when it comes to getting the right message across.
Senior account manager Donna Goff knows this all too well. Her company CAPRI (Community Awareness & Public Relations Investment) is a Las Vegas-based agency/marketing consultancy firm that caters specifically to the funeral industry hers is anything but a dead-end job.

 

"People don’t want to be reminded of their mortality," she explains. "Marketing has to be done with sensitivity and discretion. It has to cut through during a time when the furthest thing from people’s minds is making a purchase. It’s a very touchy subject." She adds: "Messages should be full of emotion you don’t want it to be creepy."

 

An example of heeding sensitivity is trans-creation marketing. The concept is simple: don’t present messages in Spanish (or other languages) that are directly translated from English. A funeral home’s marketing, Goff argues, "must be placed within the cultural and emotional context of a group’s experience. It helps to transcend language barriers and maintain a high level of sensitivity."

 

Whether spoken in English, Spanish, Hindi, Cantonese or Korean, the crux of the funeral industry’s marketing message is that people must go through the proper mourning process after a loved one has passed.

 

Funerals are healthy and natural. They help loved ones remember and move on. This is what funeral homes are selling they are offering a way for people to celebrate a life through the steps of mourning, explains Goff

 

But with lower cost alternatives flooding the market and burials costing upwards of $15,000, funeral homes are facing a grave situation.

A grave situation

There are a number of reasons why it’s getting harder for funeral homes to survive these days but cost is the main factor. Many people have simply turned to more affordable burial alternatives such as cremation, which can sometimes run nearly $10,000 cheaper.

 

The green burial movement has also been (literally) eroding market share away from traditional funeral homes. The process entails being placed into a pinewood box and buried without being embalmed or using a grave liner. Over time, the body and pine casket return to the earth naturally. The do-it-yourself funeral movement gained popularity in the 1990s and has been gaining ground ever since. At the same time, funeral expenses, adjusted for inflation, have risen 26 per cent over the same period.

 

Even US retail store Costco is getting involved. Two Illinois stores have recently begun test-marketing caskets. Placed in the mattress section, they come in a variety of colours and are made of 18-gauge steel. The cost is only $799.99 with a guaranteed 48-hour delivery time, which may be a problem for quick ceremonies.

 

And that’s just the tip of the iceberg. Imagine having your body freeze-dried and then shattered to make a soil-enriching powder. A Swedish ecologist is proposing the idea as an environmentally friendly alternative to burial and cremation. If you come from the soil, you should also give back to it, says environmental consultant Susanne Wiigh-Masak. Her proposals have already won provisional approval from the Church of Sweden.

 

Her process involves placing a body in liquid nitrogen (at less than 196C) then bombarding it with ultrasound waves so the nitrogen can penetrate and deep-freeze it to the core. Applying a vacuum removes water from the remains. What you are left with is a hygienic, odourless powder that is less than one per cent water. The method however bizarre it may seem has already been tested successfully on dead pigs and cows.
What can the industry do to counter high costs and competition?

 

Out-of-the-box research

To dig up market share, funeral homes are increasingly turning to market research to identify niche audiences, creating tailor-made funeral arrangements and beefing up their branding.

Like any business, funeral homes have to position their brand and market it successfully to remain profitable, says CAPRI president Darcy Neighbors. The companies that are investing in marketing are winning. They are the business that will stand the test of time.

 

Las Vegas independent funeral home operator Palm Mortuaries, Cemeteries & Crematories is a prime example. They have been investing heavily in marketing since 1997 and, today, are one of the top five mortuaries in the US.

 

Market research has also stopped Palm from making unwise investments. A few years ago, it had plans to open a funeral home specifically for Hispanics in Las Vegas. After working with CAPRI to conduct focus groups on the idea, they quickly changed their mind 11 out of 12 respondents said they didn’t want to be segregated like that.

 

This has been a very challenging market research project. But the focus groups have given us some real meat; theyve been extremely beneficial, says Neighbors.

 

Typically religious with strong family networks, Hispanics have become an important market for traditional funeral homes. According to the 2000 US census, nearly 7 million Hispanics call Texas home, second only to California. In total, the Hispanic population increased 57 per cent from 1990 to 2000, accounting for 40 per cent of the increase in the nation’s total population during this period.

 

Wilkirson-Hatch-Bailey has been operating funeral homes in Texas since 1925. Recently, they hired CAPRI to help them target the growing Hispanic market.  After gathering an advisory board of prominent local businessmen and conducting focus groups among Hispanic adults, Wilkirson-Hatch-Bailey re-branded their Waco downtown operation as Funeraria Brazos, with the slogan: Servicio con un abrazo de familia a familia (Our family embracing your family).

 

Focus groups also revealed that Hispanics traditionally conduct overnight vigils to honour their dead. In response, Funeraria Brazos created a living room that is accessible 24 hours a day  it’s comfortable and decorated with spiritual symbols, such as a statue of the popular Mexican Saint Lady Of Guadalupe.

Light at the end of the tunnel

It’s not all doom and gloom for America’s funeral industry. If anything, increased competition has led funeral home operators to embrace marketing and new technologies.

 

By building brand awareness through print, television or radio, funeral homes are jockeying to be at the forefront of the consumer’s mind when the situation arises. Coupled with the use of sensitive marketing, branding is no longer the exception, it’s the rule.

 

Many funeral directors have also found ways to make cremation more costly read profitable by offering custom-made caskets, urns and services. The cost can often run $10,000 to $14,000.

 

Pre-planning has also become a main revenue driver. Many funeral directors use customised software that leads customers through the decision-making process in real-time. In the process, they sell insurance policies to ensure clients rest in peace  and provide peace of mind for their loved ones.

 

And some, like Benjamin’s Park Memorial Chapel in Toronto, are even offering online broadcasting to boost its numbers. So, with one eye on innovation and the other on market research findings, funeral homes in the US are shaping their vision on better branding, new consumers and burying the competition.