Operations

Penetrate the Funeral Market By Staying Abreast of the Trends

Mark Becker
Posted on January 1, 1998

In today’s highly competitive marketplace, business people are always looking for ways to increase revenue. The limousine business is no exception.

An often neglected revenue source is the funeral market. Why do so many operators ignore this potential profit center? Several operators across the country have had staggering success working in this market.

Larry Dunn of Carey Limousine/Johnson-Williams in Minneapolis/St. Paul, MN, generates more than one million dollars in annual revenue from funeral work.

“My first livery venture was 99 percent funeral-oriented work,” says Dunn. “From there we’ve had great success in other markets. Revenue from our corporate accounts has now surpassed the funeral side of our business.”

According to Dunn, funeral work is much more difficult to obtain than corporate work. “You almost need prior involvement in the funeral industry to acquire accounts,” he says. “It’s a different environment. I came from a funeral background and had a working relationship with many people in the industry. Funeral directors are very nervous about who they do business with. They have to deal with an operator who is very focused on their program.”

Chuck Bradway, owner of Bradway’s Limousine Service in Springfield, MA, agrees. “You have to have a personal relationship with the funeral director,” he says. “Personal contact is the single most im­portant factor when you are trying to penetrate this market.”

Dunn says it’s crucial to keep up with change within the industry. “You’ve got to take care of your customer and that means staying abreast of change,” he says. “Being good in the funeral world stems from my experience in funeral livery. We pay attention to the trends and to detail. In the funeral business there is no second chance. You don’t get to replay a funeral tomorrow if it didn’t go well today. Operators doing funeral work are performing a service for a client who is under con­siderable emotional duress. You have to make it look good and be good.”

According to Dunn, you can be successful even if you don’t have prior funeral experience. “However, you really need a good understanding of the client’s needs,” he says. “If a livery operator lacks funeral experience and is interested in penetrating that market, he has to establish a relationship with a funeral home and learn how the business works.”

Dunn suggests finding a mentor. “Ideally, you should try to find someone who will teach you about the market,” he says. “You should work funerals and learn the business firsthand.”

Bradway believes it’s important to display your equipment when making a call on a funeral director. “You should drive up in your best limousine and be attired in full chauffeur’s uniform,” says Bradway “You must make an impression. Additionally, a funeral director will often inquire about the various services your company offers. Some operators have sedans with flower rack mounts which can be rented as a flower car or lead vehicle.”

According to Ed Feliciano, owner of Feliciano’s Limousine Service in Rochester, NH, in order to find a - good funeral home, you have to visit the facility and check out the operation just as you would a limousine company. “A funeral home has to come across as very professional,” says Feliciano. “If you’re dealing with a funeral home that is lacking in some way, it will reflect negatively on your business, as well.”

Opportunities within the funeral market have increased in recent years. As an operator, you have to be cognizant of the trends in the industry and adjust your business accordingly.

“There is a definite increase in cremations and that affects some of the services you offer.” says Dunn. “Many operators are apprehensive about getting involved in this market segment. However, in any given city or population there is going to be a certain number of deaths. That is the nature of the death rate. You have to take care of your program or someone will come along and take that business from you.”

Edward Defort, editor of the American Funeral Director in Iselin, NJ, also cites cremation as one of the major trends within the industry. “The cremation rate is getting higher every year,” says Defort. “More than 20 percent were cremated this year with the figure expected to reach 30 percent in the next 10 years.”

Feliciano says that many funeral homes are cutting back on costs because of the recent trend toward cremation.

“About 15 years ago, people always wanted big funerals,” says Feliciano. “Now people shop for price. Before, no one would dare call a funeral home and check price. Today, like everything else, people are trying to find the best deal.”

Feliciano is also seeing a trend toward eight-passenger limousines being used by funeral homes. “Funeral directors want black cars and appropriately attired chauffeurs in black suits,” he says. “Additionally, funeral directors are looking for limousine companies with hearses in their fleets. Funeral homes do not like to incur the expense of buying a new vehicle, as well as the added expense of purchasing insurance, storing the vehicle, and hiring drivers. They would rather just call a limousine company.”

Feliciano believes there is significant opportunity in the funeral market. “This market can generate good business for limousine operators,” he says. “New limousines and hearses are very expensive. Funeral homes don’t want to spend that kind of money.”

A funeral director will seek to establish a relationship with a limousine operator that has new vehicles. “The biggest fear of any operator is having a car break down at a wedding or a funeral,” says Feliciano. “The money and the loyalty is definitely there if you have the equipment and you do a good job.”

Feliciano emphasizes that an operator can also acquire extra work from funeral clients. “Rela­tives are constantly flying in from other areas,” he says. “They need transportation. The last thing a grieving family wants to do is pick up relatives at the airport.”

Dunn says it’s also important to establish volume with your funeral accounts. “We are fortunate to have very loyal firms in our area that have used us exclusively,” he says. “You have to generate volume and that means being persistent, patient, and confident.”

According to Dunn, generating volume is a two-way street. “Our clients are loyal to us and we’re loyal to them,” says Dunn. “This consistent revenue allows us to provide new equipment. Clients never have to worry about our vehicles. We work extremely hard on our comprehensive plan to the people who take care of us.”

Value-Added Service Is Important

Dunn believes an operator should offer as many value-added services as possible. “Our company has a telephone answering exchange for funeral clients only,” says Dunn. “We also bought a police escort service three years ago. These escorts lead the funeral processions to the various locations. The services we offer make it convenient for the funeral director because he’s calling our company for every facet of the funeral.”

Dunn’s company also offers funeral hearses for the scheduled day of the funeral, family car and pall bearer limousine service, formal lead cars for the procession, and vans to haul flowers.

Feliciano says a funeral director often requests pall bearers from a limousine operator. “I’ll send four drivers to the funeral to assist in carrying the casket,” he says. “They’ll also help park cars. We charge $75 per person. Where is a funeral home going to find four guys dressed in black suits who look good and are able to carry a casket?”

Funeral Industry Consolidating

The funeral industry, like many other industries, is seeing a trend toward consolidation. “This is definitely something that’s happening,” says Defort. “There are currently three major consolidators.”

These companies include Service Corp. International based in Houston, TX; The Loewen Group, based in Vancouver, Canada; and Stewart Enterprises in New Orleans, LA.

“These groups are buying up funeral homes and cemeteries at a rapid pace,” says Defort. “There are about 24,000 funeral homes in the United States. Service Corp. owns approximately 2,000 funeral homes, The Loewen Group has approximately 1,500, and Stewart owns a little less than that.”

“There is currently a trend toward consolidation in the funeral industry, but consolidation is a trend in the business world in general,” says Dunn. “As far as I’m concerned, it started after World War II when supermarkets burst onto the American scene. Since then we’ve seen various supermarket chains. Business chains are a fact of life. We are a licensee of Carey International and our company is global. You can’t be afraid of those things. It’s kind of exciting to be part of a big program.”

According to Defort, the nature of the funeral parlor business is multi-generational. “Each generation has received the business from the previous generation,” he says. “If a generation is not interested in carrying on the business, it is a prime candidate to sell. In the funeral business, it’s very important to have a legacy. If the current owner is not interested in staying in the business, he will be able to sell his business for a lot of money because his name has been established over the years. A company in the acquisition mode will be all too happy to keep the name going in the community.”

Related Topics: funeral business, industry trends

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