As I was preparing this week’s article my friend, Dale Clock, posted this question and a followup on his blog Dale Time. (please click on the highlighted words and read his full comments) This is a phenomenon that has become all too familiar and one that deserves discussion and feedback. How do you handle price shoppers? Do you have a system? How successful are you? You can comment on his blog or mine.
Now is the time to share.
The irony of Dale’s question is that this week’s article in The Creedy Commentary is about pricing strategy and is entitled “How to stop customers from fixating on price.” It is based on recent research reported on in an article in Harvard Business Review. I decided to delay my article in favor of helping Dale hear from even more readers. So stay tuned.
I find this question is one that we find more common today….because we are in a “changing” economy. We can focus on either a 10 % unemployment OR a 90% employment rate. Consumers hear often in their world how many businesses are offering substantial discounts to generate a cash flow. This hits their “reticular activator” part of the brain which draws attention of what they are aware of (like a car you want to buy, you see it on the road more often)….. so since they don’t know much about funerals and aren’t regulars at buying it–and many marketing messages today are about price savings– they discuss the ONE issue they ASSUME is important, which is price. I believe as a compassionate person that for consumers, their perspective, talking price allows them to enter an intelligent decision…discussing other benefits is not on their radar, and they don’t want features. I believe thats what they bring to the table as we discuss various options and (hopefully) we can teach them the various options available to help them make a sound buying decision.
I find that when a consumer brings issues of not understanding the benefits of a full service funeral home compared to a value-oriented firm, and they don’t always perceive that full service professionals will deliver what they want and, more importantly, what they need in terms of support, validation, and guiding them the only road past their bereavement–which is “through it” . THis only becomes evident after the ceremony they choose (and hopefully we aren’t order takers asking what were they thinking or want).
What works for me is outlining our topics, from gathering information about the person who lived, the family currently living, and cost information. I discuss total costs will cover the 3 areas of funeral home, cemetery/crematory, and other disbursements as we all know. I had a price situation with two families I met in one day last week, and as much as both wanted the least expensive steel casket–one asked where I could take something off the bill and I said we can arrange less than full service. The 2nd family “told me” that caskets are much less at outer vendors. THe first family had 2 funerals within the last 18 months, 2 pre-plans and some on the in-law side, so I weighed the “lifetime value” of the family….and when asked if I would remove $ 300 from the full bill for payment in cash..I said a check or credit card would be fine (since digging in and NOT being paid serves nobody). The 2nd family I talked about things, and presented the information that “many people feel they can save money at the other store….then they felt we honestly showed them differences where they could save money, and they found our casket prices and what we offered was truly in line with their budget.” I suggested they use our older facility, I told them the time and when they told me the cash they could pay I said we are flexible and took payment in full at a more substantial discount, and they agreed to “buy in” by going with our time schedule, no limo, the other building, etc.
I think we need to absolutely know our operating costs, merchandise costs, extra help costs and a basic lowest profit we will accept in this situation…..and that is our price. For other services or merchandise, I don’t find any pushback in price and we are grateful for many 5-figure funerals for simply funeral home fees. Last year, we had something between 15 to 18 families choose another firm for price (lowest service bracket anyway), and we were about 15% lower market share than average; this year, we are going at about 8% higher than average.
In short, I believe in getting our regular prices. We can help people get clear–to decide if price is most important, or a great tribute or something more simple. They have to get clear and take something off the table if we are going to adjust our price. That said, I also believe there is a market serving an Ideal Customer who values simplicity and is willing to find we are NOT available 24 hours a day NOR on weekends, yet that is served from a different facility and different staffing.
I guess this issue is considered simple…..just not easy!
My own humble thoughts about what works for me.
Phil
If and when it appears that price is the main reason for the phone inquiry (this should be obvious to a seasoned director) …my directors are required to ask a simple question to confirm that their assumption is accurate…..”Is price your primary criteria for choosing a funeral provider” This takes the guessing out of the conversation, for both parties and put’s both at ease to talk freely. You the funeral home then have the decision of discounting or other language to get them in the door. Obviously many ways to take it from there…..since inplementing this question, my directors on many (not all) occasion have retained the call. At the very least the director keeps the caller on the phone long enought to establish a relationship….