There is a lot of misunderstanding and just plain myth about how much preneed a preneed counselor would sell if a preneed counselor would sell preneed.   In my 25 year experience operating one of the largest third party marketers I have found ways to discern between performers and underperformers

Annual Contracts

This math is pretty simple.  Assuming that they have good lead generation support, an average counselor should be able to sell 2 contracts a week.  Let’s say their average sale is around $7,000. Reducing the 52 week year by 3 weeks for vacation and holidays, that translates to $686,000 in Gross Sales yielding an estimated $620,000 in Net Sales (after lapses, deaths and cancellations).  Here is the math: 49 weeks X 2 contracts X $7,000.  That is a total of 98 contracts annually.

Much is said about preneed to atneed sales ratios.  Counting only contracts, you can easily see that a 1:1 ratio for smaller funeral homes (between 100 and 125) is almost a minimum.  For larger funeral homes (above 200 calls) that ratio becomes more difficult to maintain. More on that in a week or so.

While we are on the topic of annual contracts it is important to point out that, while there is a minimum, there is also a ceiling.  There are clear physical limits to performance.  Even working 50 hours a week it is physically impossible to sustain an activity rate that yields more than 200-250 contracts a year without burning out.  We have a few that do this, however, and they all have one thing in common: they are very focused and efficient with their time.  They prefer not to be drawn into meetings or anything else that will distract them from their mission.   My favorite is a man that sells between $1,250,000 and $1,500,000 consistently year after year.  He is a devoted family man who spends his personal time coaching his children’s sports teams.  HE WORKS AN AVERAGE OF 40 HOURS A WEEK!!!  But he is working all 40 hours.  He does not waste time hanging around the back room chatting with funeral directors during slow times.  He is adept at all the things he needs to do to generate appointments.

I am often asked how many counselors larger funeral homes should have.  Most people don’t realize it but this is really a political question.  The number of counselors is really a function of what you are willing to do to generate leads and what you are willing to put up with.  But, a general rule of thumb is 1 per 200 calls.  Again, more on this in a few weeks.

Quality of Business:

A second parameter for discerning who true performers are is the quality of business they produce.  I generally look for average ages below 72 and the ratio of single pay to modal pay in the neighborhood of 50% (preferably higher in the modal pay).  Chargebacks due to lapses, cancellations and early deaths should be less than 20%.  If they increase above 20% I begin to pay  closer attention to what they are doing to generate business and if it goes above 30% I consider letting them go.  There are exceptions, but high chargeback rates generally indicate something funny going on that I will have to pay for after the counselor suddenly disappears.

Average Sale:

I look for a minimum average sale equal to the funeral home at need average.  It is important to make this calculation from actual contracts as opposed to averages gleaned from insurance reports.  Counselors (with the support of owners) often include cash advances in their prepaid contracts and this significantly inflates their average.  Most of our counselor averages are above the at need average on an “apples to apples” basis.

A few factors contribute to averages below the at need average.  The first and less common is that they really don’t believe in the value of funerals.  There is no cure for this…they need to go.  The second, and far more common, is that they are not properly trained to present.   This can be remedied quickly by a competent sales trainer.

One final factor that you should be tracking is the percentage of cremation as compared to your current at need percentage.  When the counselor percentage is higher than the at need percentage we have found that this is not a market issue but a training issue.  Have your sales manager go on calls with that counselor and you will see what I mean.

And while I have touched on the topic of sales managers here is a few clues for them.  They need at least 5 counselors to be a full time manager.  They need to be in the field with their people at least 75% of their time.  Desk Jockeys are not good managers.  They need to be encouragers not tyrants…just my opinion.