Why Adaptation May Not Be the Right Strategy
“You Can’t Manage Change…You Can Only Get Ahead Of It.”
Peter Drucker
Joe Weigel
Last year, for the first time in the history of the annual Best Global Brands report, it was reported that Coca-Cola was no longer the most valuable brand in the universe.Interbrand, a leading brand consulting agency, stated there was a new #1 brand: Apple. Following Apple on the list was Google with Coke finishing in the third position.
This year, for the first time in the history of North America, cremation is expected to overtake burial as the preferred means of disposition. What happened and how can we learn from Coke’s strategic “misdirection”?
Apple’s meteoric rise in value is due in part to the way it has continually reinvented itself. It has designed a seamless, multi-channel experience for consumers and has stayed consumer-centric in everything it does. Apple is able to determine what consumers want next and then deliver on it. Brands like Apple (and Google as well) are changing our behavior; how we buy, how we communicate with each other, even whether we speak to each other.
Now, to their credit, Coke has adopted these new consumer trends in communication. For instance, Coke has 92 million Facebook “Likes” compared to Apple’s 11 million and Google’s 19 million. But the important point here is that while Coke has embraced these technologies, Apple (and for that matter, Google) have had a hand in creating these emerging social media technologies. Not to mention, Coke has done little to move beyond marketing carbonated soft drinks – a category that’s been “attacked” by bottled water, energy drinks and specialty coffees.
Here’s the lesson:
Coke adapted while Apple and Google created. Coke responded to change (many would say appropriately). Apple and Google got ahead of it.
Yeah, but funerals and death are different.
Are they? Thirty years ago, everyone (consumer and practitioner alike) knew what to do when a death occurred. There were only two decisions: which funeral home and what merchandise. Today, no one knows (including the practitioner). Thirty years ago, we let change happen to us and the results are there for all to see. Today, we have a BLANK SLATE. WOW! We have a historic opportunity to SHAPE consumer expectations – to get ahead of change.
What about the economy? Well, gee. As the price of personal computers plummeted, Apple continued to introduce “pricey” options. Seems like those darn counter – intuitives are always winning. Remember this:
“Price is only ever an issue in the absence of value”
So – as it relates to funeral service, do you cling to your old business model since that’s the way you’ve always “done it”? Do you define yourself simply as a means for families to dispose of a body at the time of death?
Are you merely embracing innovations once others have created them? I certainly hope not! I hope your service goes being this functional need and creates value for families. But just how do you define yourself? Exactly what business are you in? Is your company one that has created new trends and now values innovation?
Alan Creedy loves to talk about how the Blue Ocean strategy applies to every business including funeral service. As he likes to say, the funeral profession has become so competitive that it seems we’re all part of a shark feeding frenzy – making the ocean red with blood as everyone competes for the same families with the same offerings – many times on the basis of price. What is needed is to find a blue ocean, where conventional wisdom and status quo is leapfrogged by zeroing in on what families truly value rather than just doing what everyone else has done in the past and is doing now.
Funeral directors love to benchmark themselves against other funeral homes. Personally, I am beginning to wonder about the wisdom of benchmarking against just another sinking ship. Kind of like the captain of the Titanic saying: “We may be going down but we aren’t going down as fast as that ship over there.”
Maybe it wouldn’t hurt to benchmark ourselves against something vital and growing; I would suggest looking to Apple and Google. It’s not that Coke has lost value – according to the Interbrand study, it increased its value 2% over the previous year. But Apple jumped 28% and Google skyrocketed 34%.
Don’t get me wrong, Coke is still a great brand and strong company (as are many companies in funeral service), but many long successful companies have lost some of their iconic stature. I have no doubt Coke will continue to grow value, albeit slowly, in the coming years. But in the final analysis, to continue to build a truly great brand, companies and firms must be externally focused on the consumer and anticipating their wants and needs. And perhaps set out for a blue ocean.
A ship may be safe in port. But ships were made to sail the high seas. Is your company ready to set sail for the wide open spaces in the blue ocean or will you continue to feed in the red ocean with everyone else?
The article is good on suggesting that funeral homes and manufacturers and distributors embrace change, and set sail to the high seas with open spaces in the blue ocean, or continue to feed in the red ocean with everyone else. However it does not offer specific solutions, and therefore most will adapt the attitude that a ship is safe in port, because of not knowing what to do, clinging to the attitude that it has always worked this way. Therefore what is needed for a successful change is specific solutions offered by successful funeral homes that adopted changes that were successful, with manufacturers and distributors of funeral products leading the charge with applicable solutions that were successful. Otherwise the funeral industry will as always remain and feel safe in port. The article needs expanded to encompass solutions, assisted by successful funeral homes, manufacturers, and distributors of funeral merchandise with specific solutions that others in the funeral industry may adopt and collectively lead the industry to focus on the consumer and anticipating their wants and needs, and begin to sail the blue ocean. Each day we need to be evaluating new products and services, reinventing old products and services that will better serve you and your families. We need to adopt the attitude that we are a “Remembrances Tribute Center” tm that have created numerous ideas and opportunities that will enhance our ability to become the consumer most valued partner. The goal is to establish a partnership that will provide increased market share and services beyond the consumer’s expectations. We must be continually searching for a competitive edge in a changing consumer marketplace. Create the leading edge in your marketplace with adopting a “Remembrances Tribute Center” tm a full-funeral resource center, and focus on creating the event your families will appreciate.Enhance your presence in the community you serve.
So nice to hear from you, John –
While I certainly would love to have offered some solutions – the point of this post was to attempt to convince funeral professionals that we have a challenge on our hands. Until we collectively realize this, no amount of solutions will bring about a change. Coke has been successful – but imagine how successful they might have been if they had looked outside the soft drink industry and focused on the refreshment industry. While I didn’t cover this in the article, Coca-Cola has watered down – pun intended – the Coke brand. Did you realize that Coke markets 15 brands with the “Coke” or “Coca-Cola” name in the US?
Joe: So nice to hear from you also. From my experience in the industry, funeral professionals are resistant to change, and even more so to develop solutions. The solutions usually come those brave funeral professionals and manufacturers and distributors who venture outside the box and realize they must re-invent, re-design, re-direct the old model and address the new model of creating a personal tribute in celebration of life, a better way to serve families. In other words changing the paradigm from a funeral to celebrating a life with a funeral resource center in which the funeral host and guests are introduced to a consumer friendly funeral experience in an uncomplicated and straightforward way, and is different from the historical standard approach. One could begin with this simple statement: “While we are together, we need to accomplish several things. Plan a final farewell for the family and friends that you will host. Establish a permanent memorial for your loved one. Create the most meaningful, appropriate and affordable way to memorialize your loved one. How do you think your loved one would like to be remembered. What kind of celebration of a life service would be most comforting to your family and friends? Every life is unique. What made your loved one special to you? What things were most important to your loved one during their lifetime? This is conducted in an educational atmosphere with displays and photos of services and merchandise you offer in “Celebrating A Life”. Displays must be self-explanatory. Particular product categories might include but not limited to: Floral Expressions, Stationery,Keepsakes, Cards, Literature and Pamphlets, Advance Planning, Dove & Balloon release, and etc., and finally a consumer friendly merchandise display that encompasses both burial, entombment, cremation merchandise. Efficiency is doing things right, effectiveness comes from doing the right things. Displaying the right products and services that today’s consumer prefers or are introduced to will help you succeed. Future belongs to those who move beyond the traditional traditional view of casket and services, and concentrate on the broader mission of helping families and their friends in a time of special need. The entire industry must bring enlightened solutions to funeral professionals to acquire the competitive edge. Dramatic changes you could and should make in your business model. Tools and products that will enhance the way you serve families. Importance of targeting your consumers by analyzing market diversity and defining your specific demographics. Increasing profits through products targeted to meet the needs of a changing market. Dramatic changes in every facet of our business can potentially be a dire threat, or an exceptional opportunity. We must stop doing the same things, and expect different results. Yes! It takes courage. Ensure the heritage and the reputation you worked so hard to create, with the next generation of consumer friendly services, products, and displays, to create a memorable funeral ceremony, with merchandise that show a visual value progression, displays that beg to be touched, and help depicting a life lived, all within a retail entertainment environment.
John –
You offer several viable suggestions, but I’d like to reference my previous post. It’s not prudent (and sometimes maddening) to offer up solutions when folks refuse to believe they have a real problem. I know funeral professionals long for the good ol’ days, but are hesitant to take that first step – or seem to want others to take it for them.
Exactly the point. They do refuse to believe they have a problem. They are hesitant to take the first step, because they don’t know what the first step should be. That is why the best funeral professionals, manufacturers, distributors who have solutions to present them to funeral professionals to help save the industry. With just a few offering changes, will not be broad enough to send a message to the funeral consumers who seek a change, one that will on a broad scale announce the new funeral paradigm “Celebrating a life lived”, and offering selections in a consumer friendly atmosphere, and retail entertainment, which they experience on a daily basis. We must as a whole and not as a fractional representation of funeral professionals attempt change. The new message must be adopted by a majority to be effective. The funeral is for the living, and to provide them all the current expected amenities they are accustomed to in their every day social experiences, and shopping. This is the next step in that evolution. Do assume that boomers are open minded, have a lot of disposable income, and will try new brands. Don’t assume once a Toyota buyer. always a Toyota buyer, or that Boomers shy away from new technology. Present remedies to treat their reluctance to follow tradition, and present remedies that fit their traditions. Focus on “Celebrating a Life” and not a funeral. Offer them retail entertainment, and a consumer friendly atmosphere. Do tailor products and services and funeral home design to boomers new value calculus.They are not set in their ways as you may think. 52% of boomers say they’re willing to change brands, the same % as the total population. With kids gone, second careers starting, and divorces common, boomers are open to new experiences-and products that fit this new paradigm. They are open to try new products and services. On the flip side, such open-mindedness also can make those consumers highly unpredictable. Honda thought mini-vans were just for the 50 and under soccer moms. Reality is 40% of Honda mini van buyers are empty nesters, full of leather and featuring zone climate control and other pricey features wealthier older buyers covet. The same is also true for the SUV evolution. As Funeral Homes address older consumers, and that is shortly coming to an end, boomers with their numbers, spending power, and high energy lives, will force the industry to change if not they will search for their new paradigm “celebrating a life” coupled with retail entertainment, thus opening the door for new competitors, as wedding planners and etc. look for additional revenue streams, they and others will offer the new paradigm of “celebrating a life” and retail entertainment. By the way, they don’t need a funeral home when there are hotels, country clubs, and etc. We need to love those boomers, their new attitudes and lifestyles can be a funeral professional’s dream with a Remembrances Tribute Center tm, by remembering they drove every significant cultural and marketing trend for 50 years. If you are going to expand your business, you will have to market to the aging boomer.
One still cannot give up on them, due to the fact they don’t know they have a real problem. We in the industry at different levels must attempt to get them to understand, present 3rd party examples, that show how without their cooperation and participation, we collectively will continue to be part of the problem, and not the solution. We must show them based upon their statistics that they are heading for disaster, and there are solutions to this problem, and that solution is the sum of the parts collectively applying the solutions, or independently one might be impressive, together, extraordinary. We collectively must return to the funeral industry solutions that will allow it to continue, and prosper. Our responsibility since we benefited and must therefore return the favor to sustain future generations the opportunity to do the same. Thank them for allowing us the opportunity to provide the support they deserve. A favor presented must be returned. People don’t react until they understand their problem, and consequences, and the solution will cause them to begin to understand, and they may possibly agree to participate in the solution. An opportunity exists to those who accept that their responsible for current conditions, and an exceptional opportunity presents itself, dependent on the choices you make today.
I think it was Steve Jobs who once said something like this: he wanted to make something people did not know that they wanted before they wanted it.
This went along with his “Think Differently” mindset.
Something that made Apple go in different directions and create new products that created demand.
Apple products early on set out to change the paradigm of everything they touched and in the process people’s expectations.
It is a difficult role to maintain. Only time will tell if Apple can maintain such high achievements.
Coke is like an old dependable brand. When you order a Coke you know pretty well what you will get. Aside from a few marketing blunders, you get a predictable outcome each and every time with no real change. Apple on the other hand has a history of true innovation. From my experience change in one form or another is difficult to get many people to embrace.
Why else do most funeral homes and crematories do pretty much the same thing as all other funeral homes and crematories? Because they are convinced that they are doing what their families want them to do and that their families do not like change and neither do they.
But do they? Apple has less than 20% of the personal computer market share, and according to Forbes is dominated by Android smart phone who has over 80% of the market but Apple is not upset because in the third quarter of 2013 “Apple made more money than all of its competitors combined, taking in 56 percent of the profit in the mobile device market.”
So are there lessons that might be learned from this?
First it is natural in many of us to “beat out our competitor,” to win the big game on Saturday afternoon, to take home the championship trophy. For many that are measured by how many “cases” you do each month and each year. If Apple thought that way they would have folded their tent and sold out to the other guys long before now. You will need to get out of this way of thinking.
Second, the secret we can learn I suggest is to focus on what it is your business does and how it can be innovative in doing it better and become more profitable each and every day your doors are open. What can you do DIFFERENTLY that not only will exceed, but far surpass your families expectations? This involves you, your staff (and your entire staff by the way), your facilities, any and everything that has to do with the business.
That goes back to the “Blue Water” concept of getting out of the shark infested blood red water of head to head competition. Dare to look at what you do DIFFERENTLY. Dare to set yourself apart from everyone else. Work hard to ignore everyone else and set your own goals to serve your families.
Apple changed the technology game with its mindset. What can you do in funeral service that will change your game?
Howard –
Right on!
And let’s not forget that Apple is about to enter the watch market (or should I say continue to innovate in the communication space) with their Apple watch. And they’re not afraid to announce the price (or rather the investment) one must make to own one.
Joe,
in reading this brought me to think that Funeral Directors in the 50s, 60s, 70,s 80,s 90,s to today have done as good of a job branding as Coke did. In this time when Coke was the “real thing”. Funeral service was “traditional thing” full service, caskets, vaults and cards, etc. Just as Coke was faced changing taste and healthier drinks, so is funeral service changing ideas about what they want after death. Unlike Coke they were able to discover different taste that the consumer wanted. Coke may not sell as much Coke, but have made up for it in water, juice, and other products to replace the revenue lost to a change in taste. Funeral service has had a different change then the beverage business. The growth in cremation in North America has grown at a rate faster than just about anyone would have expected. As being very active in CANA and love to watch the numbers closely, the growth has surprised me. The consumer who thinks the funeral is not important as they did years ago, and want to have limited services without the body present. Therefore not spending as much on products and services. Unlike Coke we do not have other items to sell them, we have tried with keepsakes, and jewelry, etc. however those things do not replace the revenue lost to the traditional service. The only good news is as the baby boomers start to die off, we will have a increase in business that will help. Of courses this will be at a record cremation rates, and business will have to prepare for it. As for branding, we will never have as strong of a professional brand as a “Funeral Director” was. But in the future what do we want to be as death care providers brand. Personally we have chose a brand with the word “cremation” in it.
Sincerely,
Kevin Waterston
Thanks for the post, Kevin –
As I read it, I couldn’t help but think of the conversations you and I have had over the years on the topic of the family’s choice of final disposition. Some have suggested one reason for the early growth of cremation stemmed from this – at the time of death, some consumers weren’t sure what they wanted, but they knew they didn’t want a traditional funeral (which at the time meant burial as the means of disposition). So, some providers offered up cremation as an option to the traditional funeral.
What if funeral professionals had brought forth another alternative to the traditional funeral – and said we have something different, but the funeral involved some different service components or perhaps even no service at the cemetery, however, it still included burial as the means of disposition? I’m not sure exactly how those service options might have been different, but had someone figured this out, the profession certainly might look different today.
Joe,
My compliments on providing a very thought provoking piece.
In my village undertaker opinion, getting out in front of contemporary consumers with something they might actually find relevant requires understanding who they are (2012 Pew Research) and what 50% of them have likely just experienced (2014 Hospice Facts & Figures from the NHPCO) and recognizing that it is hospice not funeral service that owns the conversation about death.
Your statement, “Price is only ever an issue in the absence of value,” is spot-on. I sincerely believe that positive experiences hinge on ceremony options rather than the stuff. Cutting or eliminating the margins on merchandise forces a firm to focus on ceremony/service value. To that focus, I believe certified celebrants are the best means for addressing the realities today’s world. More than ever our profession needs to listen to our customers. It’s not about the nail. http://www.youtube.com/watch?v=-4EDhdAHrOg
Albeit comprised of many components, our profession is really pretty simple. Our work is to take care of dead people and the grieving loved ones and friends left behind. How well we execute that sacred, solemn responsibility with contemporary relevance will determine economic success.
Ernie –
Good to hear from you. You make a very salient point. Even if/when our profession believes we have figured out what the consumer “wants” or “needs”, we need to listen first before we respond. Early in my funeral service career, I had the opportunity to complete the Carew “Dimensions of Professional Selling” training course. They espouse a technique with the acronym LAER, where “L” stands for Listen.” I couldn’t help but recall this as I read your post.
John,
Everybody lectures, but nobody teaches.
Everybody seems to know what the problems are, but nobody is providing solutions.
Everybody has a plan, but nothing is sustainable.
Life Celebration teaches proven, executable strategies, and provides solutions for sustainable growth.
To learn more, visit us at http://www.lifecelebrationinc.com and learn WHY we do what we do.
This is a great article…..thanks for the supportive inspiration! I’m passionate in my belief that we have always had the potential within to step up and serve the people going through a loss in a way that helps them begin their healing together as a family! Sometimes it isn’t the “legal custodian” who has a stronger connection to the deceased….which at first may have the perception of a challenging issue. I love the idea of brand development, and creating blue oceans that a business will “cruise.” Many great thought leaders are represented here….Life Celebrations, Ernie Heffner, Alan Creedy, Joe Wiegel and I’m not sure if I’m acquianted with the others. We all know that at our core we follow the basic human instinctual drive for gathering in times of tragedy and in times of joy; this is an ageless concept. WE can help 100% of families in grief, and can suggest all Funeral Service Professionals follow a course of action–yet we can paradoxically know that not everyone shares a single perception and that creates frustrations (or the myth of “do it MY way or the HIGHWAY”). Buckminster Fuller had a quote, to paraphrase, “We cannot create change my innovating an old model—we must develop a NEW model that makes the old model obsolete!” Think of taking care & bringing to surface the emotions in families going through a loss—that there is NO other way past the pain other than to go “through” the pain. It’s not about bringing the deceased along—it’s about families healing! What we have done is instinctually a benefit to starting the healing, but nobody is helping consumers understand this concept. When we look at helping consumers in their transitional shift–think of the Coaching Profession. Our Funeral Service market is ONLY about 17 Billion….with a very limited offering of what, 2.8 million deaths. Now, think of about 15 Million people who are affected—compared to a coaching market of $ 147 Billion in 2013 which is projecting growth to approximately $ 250 Billion in 2016- 2017 and I don’t know if you see what I see—but there is a wondeful ocean in which to cruise! Also, a spirit of collaboration in building out a team of professionals that work together…..like J Paul Getty said “I’d rather have 1% of the efforts of 1,000 than 100% of my own efforts…..so building the network and collaboration because the collaboration capital will always trump competitive capital! I don’t care about burial or cremation, since in MA no funeral home can own a cemetery nor a crematory…..we can only create a revenue stream by offering a mix of service and merchandise. Who says cremation must be priced lower than burial? Blast out that paradigm! Ok, gotta go…..lets all work to improve what we can do for consumers and for those who won’t change let them be……what someone else thinks about each of us is irrelevant….only what we think about ourselves is most relevant.