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During the past decade, the growing number of funeral homes arranging for limousine services has led to more steady business opportunities for operators. But transporting mourners as a reliable revenue source requires being able to handle unique needs, offer flexible pricing and adust to varying service demands.
Getting in the Door
Funeral homes, by their stately and somber nature, can be intimidating places to conduct cold calls. Funeral industry associates interviewed for this article said they would frown upon a person without an appointment showing up at a mortuary to discuss a business proposal, and likely would not do business with the cold caller.
You should arrange an appointment first if you want to get into this industry. There are many people who work in funeral homes in various capacities. They have “pre-need counselors” who help a client select a plot and funeral details while the person is still alive. There are mortuary managers who might be a good starting point for contact, but they are not the people you need to develop your ongoing relationship with, says Mark Anspach, a third generation mortician.
Funeral directors run the show, Anspach says. The director is a facilitator who meets with the family and plans every aspect of the service. These services may include many “accommodations,” as they are known in the funeral industry. This includes everything from the release of doves to having a mariachi band perform graveside. Funeral directors maintain a wealth of contacts to set up the accommodations and have the ability to pitch ideas and companies such as limousine transportation for the family, says Jim Lamar, president of Greenlawn Mortuaries and Cemeteries in California.
While the common joke is people are dying to do business with funeral homes, the truth is that mortuaries have experienced the same bad economic conditions as the rest of America in the past five years, says Jessica Koth, public relations manager of the National Funeral Directors Association (www.NFDA.org). As much as people think of the funeral industry as being a recession-proof industry, it takes economic hits like any other, Koth says. The profitability of funeral homes is based on the sale of ancillary items that may or may not be required for a funeral. Premium, high-dollar caskets have higher profit margins for funeral homes, but as consumers are squeezed financially, they tend to take what they can afford rather than what they might want. This decreases the overall profit margin of the mortuary.
An average funeral home does about 150 services each year, Koth says. With that number remaining constant but the profit margin shrinking, Koth has noted a trend by funeral homes to retire limousines without replacing them. Instead, they are contracting with local limousine services to perform transportation services as an “accommodation.”
In other words, when the funeral home uses its in-house limousine, it is considered a “service” and the funeral home makes money on the use. When an outside firm is used, whether it is a dove release or a limo ride, the actual cost is passed on to the consumer with no mark-up. It is a request accommodated on behalf of the family but not a service of the funeral home. The NFDA does not keep any official statistics of how many funeral homes own limousines versus contracting for them, Koth says.
Likewise, they offer no formal guidelines or expectations. However, in realizing the national trend to contract outside sources, the NFDA has created two contracts for mortuary members to use when engaging outside services. One is a contractor agreement and the other is a confidentiality agreement.