Try approaching this a little slower and read carefully this time. Original Comment: FCA’s article with the above title is probably the most idealistic and most unrealistic view on funeral service which I have ever read. Josh: Really? The absolute most unrealistic you’ve ever read in your whole life? Come on, Josh. When did probably mean absolute? Original Comment: I would venture an educated guess that the number of firms operating in Iowa is a lot closer to the number of FCA suggested funeral homes “needed” , than the number of funeral home “locations” (many of which are simply “viewing” chapels) in Iowa. Josh: …2.3 funerals per week. Is that “full time?” If you have evidence that a substantial number of the funeral homes listed in Iowa by the Red Book are actually just branches or viewing chapels of one business, please present it and we’ll gladly take that into account. I researched the numbers with last year’s state association directory. We had 161 firms operating 377 locations. That equates to 2.33 funeral homes per firm;(I don’t think we have any reason to believe that this ratio would be different among non members) according to your estimate this should give each firm 146 funerals per year. This is more than adequate according to Alfred, and reflects that this balance you suggest is already in place. (Thanks for your help, Alfred. Having the perspective of a second person certainly brings things to light. The only thing I disagree about with Alfred is that it is not the Redbook’s fault they don’t list funeral homes by owner. It is a directory of locations, not owners. FCA knew they took raw numbers, and used them to their advantage. ) Original Comment: Firms are able to do this because they have consolidated staff, prep facilities and vehicles, so that grieving families and friends can be served in the comfort of their own community . . . In any rural area of the country, the funeral is a community event and will be entrusted to the local funeral director who has invested in that community. To suggest that we should have less funeral homes, forces the consumer to travel to get funeral service, sends their money out of the local economy and forces funeral and visitation goers to travel as well. Suddenly, the funeral is no longer a community event and the consumer becomes a number. Josh: But the economics are still the same: fewer calls per funeral home means higher bills, on average, for each call. It doesn’t matter why the number of funeral homes is what it is, the numbers are still the same. The economics are not the same. Mr. Slocum, what you do understand is how the economics of a funeral relate to the individual. But what you do not understand is that the attitude towards the funeral is much different in rural areas than densely populated areas, such as the East Coast, West Coast and larger metropolitan areas. The economics of keeping as much business in a small town is the big picture that, I guess, only community members will understand. I couldn’t wait to get to this part. Josh, the “An Oversaturated Market” article directly asks, “Why are so many funeral homes still in business?” Then you turn around and say “It doesn’t matter why the number of funeral homes is what it is, the numbers are still the same.” Which way is it Josh? Does it matter or does it not matter? You can’t have it both ways. Josh: What you’re not taking into account is the growing number of consumers who are not interested in using the funeral home as a physical location for a memorial gathering. As cremation rates rise, and as families choose non-conventional memorials, such as those at church or at home with no funeral involvement, many funeral homes are going to find themselves having to combine with competitors or close down. It’s already happening in some parts of the country. Like in Iowa. You would have known this if you would have done your research beforehand. Original comment: What does this invite? Pricing abuse? Not at all. It invites competition, keeping prices in check. Josh: Mr. Burke, you just contradicted yourself. Earlier you wrote, “the funeral is a community event and will be entrusted to the local funeral director who has invested in that community.” Now you’re claiming that consumers are shopping around shrewdly among funeral homes – not necessarily using the one “in the community/” Which is it? It can’t be both. Mr . Slocum, You find it very easy to twist what is presented in front of you. My “supposed” contradiction is in your words, not mine, that the consumer will shrewdly shop among funeral homes. Your suggestion to have less funeral homes, removes options for families and encourages other funeral homes to fill the gap, therefore increasing competition. The consumer/customer/funeral buyer, then gets to decide if they want cheap and inconvenient(which you suggest), or is it worth the price to stay local and keep their money in the community. Josh: Oh, and I think it’s more accurate to say the community has invested in the funeral home. It is after all, the citizens’ dollars flowing to your mortuary, not the other way around. Thank you, Thank you. You hit the nail on the head on the first sentence. However, when the community invests in the funeral home, the citizen’s dollars will “flow” to my mortuary, with the trust that I will keep my business “the flow of dollars” in the community as well. These community dollars come full circle, so more than you realize, it does go “the other way around” as well. Josh: You know as well as I do that most consumers simply return to the same funeral home over and over, generation after generation (although, thankfully, that’s beginning to change). Wait a second Mr. Slocum, I thought you said that there are no inducements to return to the same funeral home and that each consumer/customer can only purchase one funeral. Which is it? Can I have return customers, or can’t I? Josh: They don’t shop around nearly as much as they do for other important purchases. That’s what allows some funeral homes to charge, say, $3,000 for a direct cremation, while another firm 30 miles away charges $1,000. Since your customers don’t shop around, they don’t know about it, and the high-priced firms can get away with it. What you are not able to take into account here, is that people who choose to live in a rural area do account for the fact that prices for goods and services will be higher than if they went to the “City.” Businesses in rural areas cannot take advantage of volume discounts for the merchandise. Rural citizens understand that. FCA needs to get over the fact that just because a funeral may cost a lot, does not mean that the funeral does not hold value, and that a vast majority of the population I serve are willing to pay for something they value. Original Comment: When the consumer has a choice of funeral homes, the consumer then dictates what takes place. If funeral homes operated with the formula suggested by FCA, competition would be virtually nonexistent and the funeral homes could then dictate what takes place; Herein would lie the invitation to pricing abuse? FCA’s suggestion of efficiency certainly does not equate with effectiveness. Josh: You’re correct that when consumers have a choice, they can bring pressure onto the market. But unless they shop around and compare wisely, they’re likely to pay whatever the local funeral home charges. All consumers know they can shop around, but why would they when they already see value combined with convenience. Josh: You make a good point that if there were too few funeral homes, there would be much less pressure on funeral homes to keep their prices in check. But, there’s a balance to be struck between these extremes. A good example of this is the privately owned chain of funeral homes called Newcomer. Visit them here. They offer everything from direct cremation to the full service, but they offer it at a price that almost always beats their local competition. How? Through volume. The Newcomer funeral homes advertise heavily on price and value for the money, and as a result, their numbers are beating the pants off the good old boys in many locations. Hey Josh, If Newcomer is so great, what makes their $2900 Direct cremation offered in Casper, Wyoming that much better than the $1195 direct cremation offered in Denver? Is the Casper location “needlessly overpriced?” as you compare cremation costs later in your responses. Has Newcomer decreased the amount of funeral homes? I don’t think so. Looking at the population of the cities where they choose to do business(only two cities have populations less than 100,000), Newcomer’s approach is to position themselves where the people are. Hey, that sounds vaguely familiar; kind of like what the good old boys in Iowa have done for generations. Why don’t I see Newcomer in rural areas? Because FCA’s formula isn’t one size fits all. Original comment: Josh Slocum’s response to Don also is only correct in the shoe store comparison when he suggests that with more funeral homes, each has less volume. Josh: How’s that, Mr. Burke? That’s just a plain fact. There is a fixed number of deaths in any geographical area. That’s all there is to divide up among the funeral homes in that area. The more funeral homes, the fewer each gets, on average. How can you misunderstand that? Once again, try reading my original comment. I agreed with you on this. I understand the zero sum game. Original comment: He(Josh) says you can only sell one funeral to each customer. When we conduct a funeral, we don’t serve the deceased-we serve the whole family. If Jane and Bill are a couple, I can sell a funeral to Jane for herself, her husband, her parents, her in laws, her siblings, her children, etc. You get the point. Funeral homes can and do induce the same person/family to come back. Josh: Let me try again. You can only sell one funeral to each customer – because each customer only dies once . Think hard Josh. I have a family of six children and their father dies. They split the bill. I just served six customers. Technically the funeral is for the deceased, not by the deceased. After someone dies, they are no longer able to make decisions and sign their name. (I take that back, you can still be a registered voter in Chicago). In all seriousness, Josh, my customers are everyone I encounter in my funeral home, at each visitation and each funeral or graveside service. This is pretty much semantics. We both understand that you only die once. We just don’t agree on the definition of customer.
