Expert Opinion: Some Things Are Obvious

Rick Baldwin

Here is an excerpt of an interrogation of a witness in a Massachusetts trial court:

Lawyer:  Doctor, before you performed the autopsy, did you check for a pulse?

Doctor: no.

Lawyer: did you check for blood pressure?

Doctor: no.

Lawyer: so, it’s possible the patient was alive when you began the autopsy?

Doctor: no

Lawyer: how can you be so sure, Doctor?

Doctor: because his brain was sitting on my desk in a jar.

Lawyer: even so, couldn’t the patient still have been alive?

Doctor: well, I guess it’s possible he could have been alive and practicing law somewhere!

Some things are just blindingly obvious!

Alan Creedy asked me to read and comment on an article published by the Harvard Business Review from the standpoint of applying its logic to the funeral service industry.

The name of the piece is Integrating Around the Job to Be Done.  The central theme focuses on market segmentation – with market segmentations being defined as the subdivision of markets by “category of product,” or “price point.”  And of course, once a market has been segmented, potential customers for the segmented products may be identified and the various competitors listed (as the enemy).

Until about 1975 or so, the markets for the services of funeral homes was identified as basically everyone who might die – and the competition was identified as the funeral home down the street.  For our relevant history, price was an unimportant competitive determinant.

But then, the cremation societies began to emerge in areas of the country characterized by general family mobility, financial affluence and higher levels of education – and the market for death care services segmented.  Thereafter, funeral homes were no longer the exclusive ‘one size fits all’ providers of death care services.  And of course the markets fractured along the lines of product segmentation [traditional funerals –vs- cremations] and price [the cremation societies advertised their prices whereas it was considered unethical for funeral homes to advertise or to speak about theirs].  By definition, classic market segmentation occurred.

What has happened since then is that the cremation societies became aggressive marketers while most funeral homes remained traditionally passive, aloof.    Today, that segment of customers seeking simplicity and affordability when a life ends increasingly does not hire a funeral home – they hire what has become billed as an affordable specialist.  In practice, as well as by definition, classic market segmentation occurred in the funeral industry.

Can there ever be a return to ‘one size fits all’ market segmentation in the funeral home industry?  I speculate that ‘probably not.’ However, I believe that if traditional funeral homes are to stop the momentum of the cremation societies, and roll-back the profound impact of market segmentation, lots of painful changes will be incorporated into how they think, act, and deliver.

Summarizing my thoughts, here is an imaginary interview with a funeral director by the Harvard Business Review:

HBR:  What do funeral homes do?

Funeral Director: Funeral homes, through their staffs and facilities, care for the dead while attending to the living.

HBR: How do they do that?

Funeral Director: when someone dies, funeral homes arrange observances that generally involve putting the body in a box, gathering friends and family, asking a preacher to recount the benefits of living an upright life that lead to the kingdom of heaven, placing the box the ground, and erecting a memory stone on the place.

HBR:  How long has it been done that way?

Funeral Director: As long as anyone can remember.

HBR:  Is anything different today?

Funeral Director: Yes, almost everything is different.

HBR: How are things different today?

Funeral Director: when someone dies, people increasingly don’t want boxes anymore, friends and family don’t generally live in same town anymore, people don’t trust preachers or believe in heaven anymore, people don’t want burial in the ground, and they don’t want memory stones.  They also want much lower prices.

HBR: What have funeral homes done to adapt – to deflect the negative effects of product and price-based market segmentation?

Funeral Director:  I can’t think of anything.

HBR: Huh?

Some things are just blindingly obvious!

Alan Creedy Comments: If you are looking for a new way of thinking about your market the article referred to by Rick “Integrating Around the Job to Be Done”  written by Clay Christensen, the author of “The Innovator’s Dilemma” is a MUST read.  You can purchase a copy for $6.95 by clicking here.  


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