27
Jul

Check Their Math! How The Herd Instinct Works In Funeral Service

WARNING! This is not about caskets!

cowherdA couple of decades ago I was visiting with 3 funeral home owner friends. They were discussing among themselves that the expensive makeovers of their selection rooms, popular at the time, were not working as advertised. Having heard nothing but glorious praise about these “retail” style showrooms I was taken aback by their private comments among themselves.  Even more curious was the response when I asked them why it was that such a widely praised concept wasn’t working for them. In unison they said:

“It doesn’t work for anybody…they just don’t look at the numbers.”

“Well, then, why does everyone say it does,” I asked.

“Alan, if you had just spent $50,000 on something you would tell everyone it worked too.” They chimed, again in unison.

I have never completely recovered from that conversation. And, by the way, my answer to them was: “The heck I wouldn’t…I’d take out an ad.”

In more recent years I have seen several vendors become somewhat dependent on this phenomenon.

  • A pre need marketer consistently sells significantly below their client’s At Need average creating a future shortfall of unprecedented proportions…even when they publish their own statistics! Because they have so many clients and so many of them are highly respected no one dares to do the math. Could you survive on an average sale (with cash advances) below $3,700?
  • A pre need insurance company carefully states a growth factor in such a way that client’s are led to believe they are getting more than they actually are.
  • A consulting company provides analytics and training that most of their clients never use other than for bragging rights. The work they do is excellent but produce very few results.
  • An advertising specialty company sells a preneed lead generator that drives leads but the leads (while many) are poor and are unaffordable.
  • Casket companies offer discounts that aren’t discounts at all. They also lock you into long term contracts with the intention of raising prices. You will know prices are up but you won’t realize you are paying much more than you expected.

So, the formula is: Get industry leaders excited, make a lot of noise and no one will actually DO THE MATH!

I am not sure that this really is an anomaly. Seems to me this is symptomatic of our whole society.

Adolph Hitler made this a core part of his strategy. He said: “Tell a big enough lie and tell it often enough and people will believe it.”

I prefer to remind myself that many of the people who watch wrestling on TV believe it is real. It is, however, discouraging to realize they all vote.

Here are some rules to live by:

  • Your colleagues do sometimes exaggerate
  • Never believe everything people say at conventions
    • If you like something you hear spend the money to go see their operation
      • you will be surprised to find that most of what people tell you they are doing is really only stuff they wish they could do if their staff would cooperate
      • and if it is, in fact, real then you will recoup your investment with some real learning.
  • Do the math:
    • Figure out the average sale
    • Make them work out an example in front of you
    • Know what your operating ratios should be
      • all operating ratios for funeral service are calculated on NET sales
        • net sales are gross sales NET Of cash advances
  • Quit Drinking Downstream from the herd
  • Try thinking for yourself. It will often give you a headache but rarely the pain in the rear end the alternative yields.

Sorry for the cynicism. But somebody’s gotta say something.