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David Mills
By David Mills on September 20, 2019

How the Big Boxing of Funeral Home Ownership Impacts Local Communities

It’s a familiar story. The local hardware/barber/drugstore/physician/funeral home is bought out by a large corporation or is simply run out of business because they cannot compete. It’s the “big boxing” that has taken over so much of the business fabric in almost every community, including the funeral home industry. It’s important to ask whether it matters and if local funeral homes can compete in a sea of big corporations.

If we start by looking at the economic difference, here is the reality:

On average, 48 percent of each purchase at local independent businesses was recirculated locally, compared to less than 14 percent of purchases at chain stores. (compilation of nine studies)

When a “big box” takes over local business here is what happens in a local community, according to a broad array of research studies

  • Local business builds the middle class, while corporate ownership drives inequality.
  • Local businesses employ more people per unit of sales and retain more during a downturn.
  • Locally owned businesses are linked to higher income growth and lower levels of poverty, while big-box ownership can depress wages and benefits for retail employees.
  • The health of a local community and the strength of its social network is connected to the share of the economy held locally, while mega corporations undermine this health.
  • Locally owned businesses contribute more to the local tax base, creating stronger schools, infrastructure, and other vital services.

The impact of independent funeral homes goes deeper than economics

The economic and social impacts are easy to observe, but the impact goes much deeper. The healing rituals that funeral homes support within a community are tied directly to the health of that community. The strong connections between people, especially during the most difficult moments in a person’s life, allow for true healing and support to occur, and when the funeral home is knitted into the fabric of the community, the healing experience is much stronger. Any movement toward a less connected and more antiseptic experience can damage both the healing process and the community as a result.

Maintaining and helping locally owned funeral homes grow is a critical part of helping local communities remain vibrant and healthy. That’s the focus of Story Collaborative.

How can local funeral homes compete?

Corporate ownership of funeral homes is currently at more than 11%—but they often capture a large percentage of local funeral and cremation cases. Understanding how to compete in this environment is a vital part of how local funeral homes can sustain and grow their services. Effective competition requires an understanding of trends in funerals and cremations, but it also requires the ability to diagnose what gives the corporate funeral home any competitive advantage in the local environment.

Why the Best Funeral Homes Don't Win in Most Cases

Key competition factors:

Branding - While the strong traditional image and ownership of local funeral homes is a strength, it can result in the appearance of branding that looks out-of-date to most of the population, other than the oldest Americans. Branding has to address the felt needs and experiences of the people who are making funeral decisions and often must be updated.

Buying Power - The ability to buy at scale is a big area of competition, along with increasing pressure for price transparency. Strong vendor relationships and smart business strategies that build services rather than products are a vital part of competing.

Cumulative Insights Turned to Action - Corporately owned funeral homes have the advantage of high-level strategy and research. They are looking ahead to anticipate trends and prepare both operations and marketing. Participation of local funeral homes in effective associations and attendance at in-service offerings is critical, along with having strategic plans for both marketing and operations.

Capital - A significant advantage that corporate ownership brings to the market is low-cost and abundant capital. The effectiveness of business planning, accounting, and relationships with community lenders and investors is vital.

Technology - Corporate funeral enterprises have the advantage of enterprise-level software for a variety of functions. From HR, to accounting and marketing, this software reduces the cost of operation and improves the customer experience. The good news is that with the right choices, local funeral homes can compete and access the same types of software. There are free software tools that can help you begin building a competitive advantage.

Marketing - The marketing budget of a corporate funeral home is leveraged by national ad buys, creative departments and lots of testing that develops the most effective advertising and marketing. The ability of local funeral homes to compete requires more than the DIY use of social media and should include the expertise and support of funeral marketing experts who are committed to support the owners and managers of local funeral homes.

Customer Service - Effective customer service is the lifeblood of every funeral home, but an outside perspective can provide new insights into how phone interaction is perceived. What may seem appropriate and normal in a business that has been “in the family” for many years might not keep pace with the high expectations of modern culture. Customer preferences for communication are changing too, and total reliance upon the telephone may not be the best method for every type of communication. 

Reputation - Reputation building is something that almost every funeral home believes is critical—for good reason. It is the very thing that corporations want to purchase and sustain by retaining local names on the businesses they acquire. Reputation is not only communicated by word of mouth, but also by intentional referral programs and by online reviews. This is an area where local funeral homes must compete by understanding that while it may have a historically strong reputation, those who are younger and those who are new to town, don’t know about the home at all. When they need the funeral home’s services, they will be leaning on the way others talk about it you both in-person and online. Online reputation building is really important.

Should you let your customers know you're locally owned?

The answer is yes, it's important. Making this a part of your website story is critical. Whether your funeral home is still owned by the same family that started it is not as important as local ownership.

One way to do this is to participate in the "buy local" efforts that are lead in many communities by the chamber of commerce. You can also share this information on your website. You can also use language like, "proud to be locally owned and operated" on signage and social media.

About Story Collaborative

We're a growth agency that specializes in building a competitive advantage for locally owned funeral homes. Based on our industry expertise, we help these local companies stay competitive in a market with a growing number of large corporations.  We are motivated to work with these local companies because they make a real difference in people's lives and winning new customers is not only good for their business, it's also good for families and the community. We're located in the state and family-owned, too.


Why the Best Funeral Homes Don't Win in Most Cases


Published by David Mills September 20, 2019
David Mills