By Todd Carlson, Executive Vice President and Chief Sales Officer
Have you ever wondered if you are using the right preneed product for your funeral home?
Preneed products are not “one size fits all.” That is because your preneed product selection should align with your business strategy.
So, depending on your business strategy and typical preneed customers, you will need to select a preneed product that supports your business goals.
That way, your funeral home will be set up for success.
Let’s look at how a preneed product works.
When your funeral home sells a preneed plan, you essentially have two levers to pull:
In general, higher-growth products pay lower commissions. Lower-growth products pay higher commissions. Some products meet in the middle.
Essentially, you can ask yourself: Do I want the benefit of commission dollars upfront, or do I want more growth on my preneed business at claim time?
In short, do you want to be paid now or in the future?
Let’s look at three different business strategies and dive into the pros and cons of each, so you can feel confident making the right decision for your funeral home.
If you are running an active preneed sales program (one that utilizes a full-time licensed preneed sales professional), it likely has the following characteristics:
If you have an active preneed sales program, the best product for this strategy is one that offers higher commission rates offset by lower growth rates. Higher commissions allow your sales professionals to make a living selling preneed plans for your funeral home full-time. In addition, up-front commissions provide revenue to pay for marketing and lead generation expenses.
If your preneed approach is more passive (serving primarily walk-in and call-in business), then your preneed portfolio will probably look like this:
This type of program requires higher growth rates to offset inflation and shortfalls on plans with older average ages and single payment plans. So, the best product for a passive approach is to have a higher growth rate with lower commissions, which are not needed to support a full-time sales professional or market the preneed program.
If you fall somewhere in the middle with a moderately active preneed sales program, your program probably looks something like this:
If your program is moderately active, you’ll benefit from a product that offers a balance between growth rates and commissions. This strategy makes sense if your funeral home is a smaller business or operates in a rural area. You know you want to maintain and possibly even grow your market share through an active preneed approach, but your funeral home may not be able to support a full-time sales professional on its own.
The solution? You might partner with an agency to host a few marketing events and have the sales professional from the agency follow up with attendees. Another option is to share an FDL-employed sales professional with other non-competing funeral homes in the vicinity.
The next big question to ask is…what is your preferred strategy? And does your current product align with your desired preneed strategy?
As you can see, each strategy has its benefits and drawbacks.
The strategy you choose depends on your overall long-term goals:
That is why it is so important to talk to a preneed product and strategy expert, like our representatives at Funeral Directors Life (FDL).
Your FDL representative can help you understand the long-term implications for your business based on your current product and strategy. That way, you can gain clarity on what your goals are for the future and how to best meet those goals by matching your product to your preferred preneed strategy.
Simply fill out the form below to request a free consultation with your regional FDL representative.
Whether or not you choose to do business with FDL, you will be able to make informed decisions about your business that will help you meet your goals for the future!