Three Ways Funeral Homes Can Reduce Costs – Without Impacting Customer Service

There are hundreds of articles for consumers about saving money on funerals; like Motley Fool’s “Save Money on Funeral Costs: Here’s How”, the FOX Business article “10 Facts Funeral Directors May Not Tell You” or HuffPost’s “Keeping Funeral Costs Affordable”.

You know what most say: consumers can reduce funeral costs by shopping around, skipping embalming, choosing a lower priced casket, not ordering flowers, holding the funeral at home instead of the funeral home; opting for cremation and (for ‘ultimate savings’) body donation.

But, you’ll not find a whole lot of ‘cost cutting’ information online for funeral homes. Still, common sense tells us funeral homes can reduce costs in three ways:

Reduce Overhead

Cutting overhead can be an easy way to reduce costs without impacting customer service. Do what you can to save on both fixed costs (such as your facility mortgage or fleet purchase or lease payments, and business insurance) and as well as variable expenses like those incurred in marketing and promotion, facility and fleet maintenance/repair and the fulfillment of client family arrangements, like caskets, urns, and prep room supplies, just to name a few.

The first step in reducing overhead: get the all the facts down on paper. “How to Calculate and Track Overhead Costs”, from QuickBooks is a great resource, as is Alan Creedy’s Break Even Calculator, which will tell you exactly how many cases your funeral home will need to process in a year to break even, based on the overhead costs entered.

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Reduce Employee Inefficiency

Factors such as sleep deprivation, on-the-job stress, obesity, smoking, substance abuse, occupational injuries, and grief all reduce employee efficiency and cost employers thousands of dollars each year.

But there’s something else: employees who waste time on their smart phones can also cost you – plenty. In truth, recent survey findings are dismaying: “Professionals surveyed…said they squander an average of 56 minutes per day, or the equivalent of nearly five hours a week, using their mobile device for non-work activities in the office.” (Source)

All businesses, including funeral homes, could benefit from creating (and enforcing) a Cell Phone Usage Policy.

Increasing employee efficiency involves communicating effectively, being clear about employer expectations and business goals, a willing to prioritize and delegate tasks when necessary, providing them with the right tech tools and, at the heart of it all, an observant, watchful nature.

For other ways to improve employee efficiency, check out “10 ways to increase your efficiency at work” or the National Business Research Institute’s “5 Factors that Affect Your Employee’s Productivity“.

Create Consumer-Driven Service Packages

Because the families they serve want both convenience and value, funeral homes around the country have long offered ‘packages’ of services and products.

Using the search phrase “funeral home general price list,” we randomly selected 4 such documents from the first page of Google search results: the price lists of the Amos Family Funeral Home, in Shawnee, Kansas, Bryan-Braker Funeral Home in Fairfield, California, Brown Funeral Home in Niles, Missouri, and Schmidt & Bartelt, a firm with four locations in Wisconsin.

No surprise: all four funeral homes were actively increasing customer satisfaction by offering packages at varying price points – ranging from the economical to the premium.

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Great for the families they serve–and it’s good news for funeral homes too: by “shopping around” for the best prices on funeral-related products and through skillful negotiation with selected suppliers, funeral homes can reduce the cost of packaged services and products.

The key to success here lies in intimately knowing what your customers want and ensuring you have those things available to them at the lowest possible cost to your funeral home.

There you have it: the three ways funeral homes can reduce costs while remaining focused on customer service and satisfaction.

If the subject of reducing costs while providing meaningful funeral services interests you (of course it does!), check out our September 15, 2017 post, “How to Create Meaningful Funeral Services for Families on a Budget”, where funeral directors Kristan McNames and Caleb Wilde weigh in on a related topic.

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