Comments on: Death of Preneed?

By: Mike

Mike — Thu, 07 May 2009 13:49:43 +0000

I disagree, as a matter of fact my organization has seen steady increases in pre-need funeral and cemetery accounts (profit as well). Once demographics are factored out, we can arrive at only one conclusion, pre-need is becoming more mainstream than ever before. If your staff is not creating pre-need accounts, then you need new staff. I have heard the argument of the cremation market for years and have always given the same advice, you sell what you present. Assuming of course that staff know HOW to present. As far as issues such as profit and pricing, these drill down to basic business practice and unfortunately for those who can’t make it work, will simply leave the market.

By: George

George — Tue, 05 May 2009 20:27:39 +0000

If we all charged what our services are worth regardless of what merch is purchased we would not have any problems. As long as we continue to try to derive any of our profit from merch we will continue to have these problems. It is a matter of being the first to take the plunge, raise service fees and lower merch prices. No one is willing to do this because we all continue to base our service chares based on our competition. We must stop the madness. As to the preneed crisis it should never have been allowed in the first place. It does not guarantee future business and the only thing it has done is to allow unethical individuals and companies raid trust funds and create the mess we are all dealing with now.

By: Philip

Philip — Thu, 19 Mar 2009 06:05:38 +0000

It seems as though here in Australia we are mostly seeing changes being brought about by current world financial circumstances, opportunism by Insurance companies as they tackle another income stream, rather than any fall in Pre-Need sales.

While our PN contracts appear to have the same components as those mentioned above – Prof. Fees + Coffn/Casket + Disbursements + Cremation – we also include transportation (transfers) within a certain radius – the real difference between ourselves and the current flood of insurance company offers is the need we have to collect a minimum up front payment for anyone wishing to pay off the balance over 3 years, or, payment in full on signing of the contract. Naturally insurance companies talk about ‘for the price of a cup of coffee a day’ you can take out Funeral insurance. This can’t yet be matched by any PN contract we enter into.

What uninformed consumers fail to digest is that Funeral Insurance is a life long payment plan – as against a once off, or, a short term installment plan. When comparing to Insurance schemes, if people no longer have the available funds for a one off payment we need to make it easier for them to make the right choices. We believe this is about education – if we can get the benefits message across then that’s half the battle. Having the flexibility of customising a service outcome is easy compared to counteracting the deep pockets of insurance company marketing budgets.

Is it that PN funds are not getting the returns on their investments at present? Optimistically this will change, however, I’m not so sure that it means pre-need is dead and buried, does it?

As a baby boomer I know I’m about to lose my parents now and I also know I’m not alone. My friends, and no doubt others, are very capable of seeing the benefit of locking down costs. For mine it’s a matter of reaching our potential PN clients in different ways than before.

I agree with the proposition that to survive we have to adjust the PN equation, as you can see from my ramblings, and without fully understanding your circumstances in Canada, I believe for us the challenge is about our proposition.

By: Frank

Frank — Fri, 06 Mar 2009 15:19:46 +0000

The industry again and again is its own worst enemy. Most funeral homes price structure is that they lose money on every service they provide and make their money on merchandise. As cremation increases and the customer spends down on caskets they are losing money. Preneed is the same story. They guarantee and then lose money because they growth can’t keep up with the increases in prices and a expenses. Just last year the caskets alone when up 8 to 10% and no way is the PN growth going to keep up so they lose money every time a PN contract turns AN. And to make matters worse who do they sell PN to people that were going to use them any way.

The industry needs to stop shooting themselves in the foot.

By: Randy Baugh

Randy Baugh — Thu, 05 Mar 2009 17:58:07 +0000

The largest impact with to our delimma for our industry with regard to funded pre-arrangement services is the continued growth with cremation disposition. No longer do we have attractive, higher dollar arrangements to fund within a trust or life insurance plan as we have in past with a burial as a disposition. These lower averages make it virtually impossible to develop an attractive compensation plan for those we employ. Add to this the continued growth of discounters within our market areas. A full, “traditional” funeral home has much difficulty in competing with these ‘bottom feeders’ who continually promote price as the major or only concern to our potential consumers. It is foolish to guarantee our cremation services at such low prices for those anticipated deaths in future. Our expense growth in operating our establishments exceeds the growth of those monies prefunded. There exists few opportunities today for our traditional funeral homes to combat this. Yes, we are seeking to promote value through other offerings such as catered receptions, etc. But many of those making pre-arrangements see little value in these services for themselves. They do not involve the family in the decision making. Secondly, our mobile society (dispersed family) decreases their perception of value accordingly.

The picture is much larger than the avenue of how and with whom we engage our funding with. There lies an exorbitant need for positive change within our industry. Shame on our forefathers for not having a clear vision with strategies developed. It is not only the pre-arrangement services that is in jeapordy. We can only hang on for so long.

By: Larry Schildmeyer

Larry Schildmeyer — Thu, 05 Mar 2009 17:22:25 +0000

Hep,

I also believe that preneed needs to change in as much as letting the consumer giving us the personal stats, family info, service info, possibly selecting merchandise but not guaranteeing these services and products. Instead using a final expense product to fund the memorial celebration events. The major preneed insurance companies need to quickly get on board and get these products to the frontline preneed people. They need to know that we are funeral planners and not insurance people and need to keep the process simple.