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Transcript of Sales Cycle
I have been so slow..."
The case volume at the funeral home is off, thus the overhead per funeral is going to rise...making the profits go down.
buying down nowadays - they aren't buying the good stuff like they used to"
The funeral home is not earning the same profit levels on caskets that they used to.
Cremation is either break-even
or not profitable for the funeral home - the profits earned on burials are subsidizing the lack of profits on cremation cases.
"Money is tight..."
The funeral home needs more cash to be comfortable.
The funeral home has a concern for what the competitor is doing v. what they may or may not be doing. Is the competitor offering more value? Will the funeral home lose business over this?
just gotten so
high in price."
The funeral director is concerned that the supposed value they get from buying Batesville is break even or less than the premium they pay for their caskets
Be able to understand, recognize, and capitalize on problems and calls for help.
There is very little that any funeral director can do in order to influence the case volume of a funeral home, especially for mature businesses.
You are concerned your competition is
successful, at the cost of taking business from you.
People are buying down and your profits are largely in the casket, so your profits are down too.
A funeral director cannot control the amount of money a family has to spend on a funeral.
Cremation is priced so low that it is a
break-even or non-profitable offering.
Cremations will grow 1.5% -2% per year - you cannot dissuade a family from a personal preference for cremation. FD also can't control what his competitor charges for cremation.
You cannot control what your competition does... how they price funerals, caskets, etc.
Your money is
tight probably because a variety of factors affecting your cash flow.
Costs of business that a funeral director cannot control are rising: healthcare, gas, employees, etc. These costs are rising all the while profits are falling, creating a cash flow crunch.
You are concerned about the prices you are paying for caskets.
You cannot control the prices Batesville or any casket company charges for their caskets.
You need to reduce your costs per funeral to remain profitable at a lower case volume.
You need a product mix that produces a "healthy" profit at all price points in the selection room.
If burials have to continue to subsidize cremation, we need to make burials all that more profitable by reducing costs.
Look at your
business and find where you can control your costs - casket costs, supply costs, etc. Ease cash flows here first.
Keep business coming to your door by out-valuing your competitors
(ie. high eye appeal caskets).
Re-evaluate the tangible value that you are receiving from Batesville v. the difference in price you pay for their caskets.
Understand that there are parts of business that a business owner can control, while there other parts they cannot control.
They need to transition their focus from uncontrollable aspects to controllable aspects of the business.
This will help their business grow and maintain profitability.
Do not overspend on features like gauge, brush finish, memorial tubes, etc. if you are not going to bother educating the consumer on those features.
and creating profit margins in the process is easy
Only build options
into your product if you educate the consumer to see value in these options.
If I had 2 iphones displayed on a desk and one was $49 and one was $199, with no education, which one would the average consumer buy?
What if now a sign sat next to the $199 iphone that said... this model has an 8 mega pixel camera, video, internet, 10x processing speed, 24 hours battery life.
Now compare this with the sign on the $49 version that said... this model can take 3 mega pixel pictures, no video, email only, and 6 hours battery life.
Do you think I would sell more of the $199 versions with an education?
Use high eye appeal
products to create profit progressive visual value
Increase eye appeal and visual value as the profit points increase
Let the caskets speak for themselves:
Show appealing colors, themes, etc. in the higher price points.
Show earthtones, non-themes, etc. in the lower price points.
Parallel eye appeal and profit to build an effective product mix
For those consumers who do not understand, comprehend, and/or listen to your education, build in a secondary profitability protector - eye appeal.
$1,795 - $655 -
Hartley Silver Plain
$1,995 - $636 -
$2,195 - $707 -
$2,295 - $754 -
$2,395 - $754 -
$2,595 - $754 -
$2,795 - $825 -
Suggest a Solution
Aspects of Business & Reality of Today's Consumers
Listen for Cracks
in the Ice
Let's take a look
# of deaths
family's personal preference cremation v. burial
family's financial allotment for funeral
certain costs of doing business - healthcare, gas, etc.
pricing - don't want to raise prices though
volume - only minimally through relationships, advertising, etc.
profit - buy sensibly, profit reasonably
If your case
volume is off, and you don't have an answer of why it's happening
1. Buy Sensibly
2. Create Visual Value
3. Mind Profits
Go to showroom or other presentation where the funeral home displays casket selection
Expose Showroom Problems
Pick out best/worst selling caskets
from previous conversation
Recap the Current Showroom
(cc) photo by theaucitron on Flickr
1. Acknowledge the showroom (competitors, type)
2. State the "flow of the showroom (By Price, By Theme)
Best sellers are probably...
Priced at the lowest 1/3 of selection room
Caskets that people buy on price
A casket that looks too good for the price
Worst sellers are probably...
Priced in the top 1/3 of selection room
Caskets that are not visually appealing and not price sensitive (oddball colors, lack of themes, etc.
A casket that looks overpriced.
From previous conversations, acknowledge the best selling units in the showroom.
No Price Gaps...
If the showroom is laid out "Good, Better, Best"...
Prices should consistently be equal to or greater than the previous casket as you move up in the product spots.
Example: The Richmond is priced higher than the Hamilton
Families on the fence between two casket selections are easily dissuaded by price gaps
Price gaps should not exceed $100 - $200 under $3,000 and $200-$300 under $4,000
Example: Mental price gap between Centura and Agean ($3,995 - $5,540) with nothing in the $4,000 price range
Promote eye appeal at higher than average sale/happy profit point
As the price increases, the visual value of the casket should also increase.
To move up average sale, alter product mix to show themes and appealing colors at gradually increasing levels
Use lesser appealing earthtones and/or non-themed caskets in lower price points to bump families up to higher price ranges
Example: No one bought the Centura because it didn't have a theme and it was at a higher price point than Mansfields that are in the same color scheme.
Shift earthtones and non-themes into lower price points.
Example: Ashland was at price point of $2,995- only the 2nd spot up in woods since the Abner never sells.
This is the only wood casket with the ability to be themed.
Money is being left on the table making the only "themeable" wood at the 2nd to bottom wood price point.
People will obviously pay for theme at this funeral home (Mansfields).
Gradually raise wood sales by moving the price point of this casket to $3,295.
Progressive Visual Value
Do not spend unnecessarily
Haphazard pricing typically leads to ignorance of profits.
Example: The Hamilton is only generating about $1,000 (at $2,695 retail price) in profit and the Camry is generating about $900 (at $1,895 retail price).
A funeral home may be spending more money on a "spot" than they need to.
Can another casket with a lower wholesale cost serve the same purpose?
"I sell it for what I think I should sell it for"
Example: Richmond was only serving the purpose to move people up to the themed caskets. Any non-themed casket with same color will serve the same purpose.
Pay approximately $600 less for casket ($1,700 v. $1,097)
Reduce price by $100 ($2,995 to $2,895)
Earn $500 more in profit ($1,295 v. $1,798).
Profit levels should rise consistently as the retail prices rise.
Make the Pitch
Gather the Materials
Offer to do a Profitability Analysis / Proposal on their Casket Selection
Reiterate the problems you exposed
1. You will include in the analysis, Thacker products that will fill the holes and plug the problems that you uncovered.
2. This will also include any tweaks and changes to the retail prices (if applicable).
3. The analysis will also include profit points detailed on each spot in the selection room (Thacker's and competitor's).
1. Secure a copy of the price list.
2. Ask permission to take pictures of the room.
Crucial for picking right colors, themes, price points, etc.
This is needed in order to help you remember hot/cold spots in the showroom... you want your products with high visibility.
Establish a Goal
1. Tell me your "happy casket" - the casket in your showroom now that you are happy selling.
2. We will build a product mix around this profitability point.
3. Our goal will be to achieve this profit, but to keep the retail prices the same.
Reiterate importance of profitability reviews
1. Casket are one of the top 3 contributors to the bottom line of the funeral home.
2. Profitability of the funeral home generates your net worth.
3. Why would you regularly review with your family financial advisor, but not regularly review your casket selection... a top three contributor to whether you business is profitable.
Question Competitor's Support
Thacker does more than just sell you a casket
Give me responsibility for the caskets in your selection room that are ours... you have too much to do.
I only succeed if you succeed.
It is in my best interest, and our company's best interest to make sure you meet the levels that you need to be at.
Do you review your casket profitability on a regular basis with your current vendor?
Don't you agree that it is very important to review this on a regular basis?
These are the reasons why Thacker has grown so much over the past years- because we do these things!
We will help you with the cost savings on the buy, but also analyze the sell aspect of your business.
Do's and Dont's
If he is committing 100% business...
Ignore profits of the funeral director
- Make sure that his profits gradually increase as his retail prices increase.
Rock the world of the funeral home if they are happy with their current product mix & pricing structure and it is yielding decent results
- Make minor changes where you have previously exposed problems and do "even swaps" for caskets... build the funeral director insurance.
If the funeral director is not committing 100% of his business...
Lead the funeral director to believe that Thacker is responsible for his profit leves (one casket can destroy the entire showroom merchandising plan).
- Put "high-turn" units in the showroom to earn satisfaction with funeral home and increase your commissions.
Thank the customer for the original meeting!
1. Restate what the customer is happy with.
2. Bring to light and issue the customer is unhappy with and how Thacker alleviates that issue.
3. State the discount you will be giving the customer.
4. State how Thacker will be the most viable partner for the funeral homes in terms of their goals.
List major changes to the selection room... not one for one product swaps
List other changes or issues you see that are not product related
Get the Contract Signed Right There
Set a date and time to
come back and get it signed
Leave it to the customer
to sign and return
Give the FD something -
showroom, consignment, etc...
ANOTHER VISIT REQUIRED
VERY TIME CONSUMING!!
MULTIPLE VISITS, PHONE CALLS
Each of these bullet points must be reviewed with each customer.
NO PART OF THIS SECTION SHOULD BE SKIPPED OVER WHEN PRESENTING THE PROPOSAL.
This is how our company brings intangible value to the funeral home!
Change the Funeral Home Name, Date, and "Prepared By" sections
Reality of Today's Consumers
Consumers do not desire to purchase a casket.
Same size, same shape
All caskets perform the same task equally as well -- "they all get grandma to the grave."
Begs the question for the consumer... why do some cost twice as much as others?