“It is unwise to pay too much, but it is worse to pay too little. When you pay too much, you lose a little money – that is all. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the things it was bought to do. The common law of business balance prohibits paying a little and getting a lot – it cannot be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that, you will have enough to pay for something better.”
–John Ruskin, Philosopher, 1819-1900

    As I travel around the country, visiting with funeral home owners, the conversation inevitably turns towards the topic of Funeral Discounters. These are the funeral homes that habitually offer the lowest priced funeral and cremation services and merchandise in the marketplace. They oftentimes attempt to brand themselves (in one way or another) as being the “Wal-Mart” of local funeral providers. Is this a good thing or bad thing for funeral service?
    In my opinion, it’s simply the American free market system working as it was meant to work. Both the Discounter and the Non-Discounter offer the consumer good service and bad service; quality merchandise and substandard merchandise; cheap prices and affordable prices; caring staff and disinterested staff. There are no real winners or losers, based solely on price alone. There is much more to it than that.
    For the consumer, price is only one part of the total cost of doing business. Cost assessment differs between individuals, and depends on various personal and situational factors, such as socio-ecological awareness and knowledge, income, peer group and the purchasing situation.
    Falling victim to your impulse to charge less oftentimes will bite you. Why? Because there is no real good way to underprice your competition. If they’re game, they will also drop their prices until you are no longer in business. And even if your competition is not willing to fight for the bottom spot, what did you actually win? Will your clients respect you more for charging them less? Will they remember you fondly the next time they need your services? Will they even tell all their friends, neighbors and co-workers what a “great deal” they received from you? I doubt it. Be honest. If you have the absolute lowest prices in your area, do you truly believe you will attract that many more families, which will make it worth all you’ll need to sacrifice, in order for your low price strategy to work? Most funeral homes don’t survive long enough to find out.
    The whole concept of “low pricing” means that your funeral home consistently tries to be the provider with the lowest price in the marketplace for funeral goods and services. Having the lowest price can be advantageous to your marketing effort; however, the strategy also has several disadvantages.
    Let’s review what actually allows you to lower your prices in the first place. First, the costs of all merchandise you sell have must be cheaper than your competitors. Can you really buy everything you need for that much less? Now what about paying for good, caring, hardworking and honest employees? Will the fact you need to pay less wages and offer less benefits than your competitors attract and keep the quality talent? Doubt it.
    Consider this. If you charge less, to make a half way decent profit, what are you willing to discontinue providing your families? All of the “little extras” that mean so much to all those you serve cannot be afforded by the cheapest provider. No frills, no extra service. Just the basics. Why? The lowest provider simply cannot afford any additional overhead. No extra staff means less help. Minimal salaries, means minimal support. The cheapest vendors mean more defects. A low-price offering reduces your profit margin and forces you to operate on a low budget. If you cannot afford to hire the number of staff needed to maintain a high level of customer service, then low pricing may not be enough to maintain repeat business. The list can go on and on.
    The Internet offers everyone the ability to check your pricing against everyone else. Your firm stands to lose credibility, among your families, if your “advertised low prices” are not comparable to pricing found on the Internet, according to the Knowledge@Emory website.
    In some cases, you may be forced to sell product at a loss to remain competitive. Always being the lowest-priced funeral home sometimes creates the perception that your service and merchandise quality is lower than that of the competition, according to Karl Heil, writing on the Reference for Business website. Some consumers might assume that reconditioned, second hand, inferior and/or foreign made merchandise is the means by which you maintain your low prices.
    Instead of “rushing to the low price basement” why not take a higher road? Convene a strategy meeting of all your full and part time staff and those individuals who are “friends of the funeral home.” You know who I’m talking about. Those longtime, very satisfied and eternally loyal families that you have served for years and years. They love you and your funeral home and they simply cannot imagine going anywhere else. You are “their family funeral home – period.” They need to be a part of your strategy session, because of the invaluable input and insight they will bring to the table.
    When everyone is gathered together, begin to make a list of all the things (big and small) that make your funeral home special, unique, different and valuable to all those in the community that require the services of a funeral/cremation provider. What do you offer families, which they perceive as valuable, that they simply cannot get with anyone else? Put your thinking caps on and come up with a minimum of five things. It’s these five things that will help to form the backbone of your branding statement and your total service commitment. In short, why should I call upon your funeral home to serve me before, during or after a death, when all I want is the very best I can acquire, at a fair and reasonable price?
    I’d love to hear your thoughts and comments on the topic. Feel free to share them with me at
cpkuhnen@gmail.com.