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Funeral Home Pricing Strategies that can Turn Families into Customers

by Bowman & Company LLP | Jul 26, 2018 | Funeral Homes

If potential customers were researching your funeral home and wanted to know what funeral options were available and what they would cost, would they find pricing presented in an engaging way, or just simply listing prices? Would they be educated on all available options?

In my experience, funeral options and prices today vary considerably. It seems that funeral homes need to re-think the way they present pricing information to client families. How do you move from your current approach to pricing to one that will turn potential client families into customers who truly understand the value of the services you have to offer?

The following pricing strategies might be worth considering.

Incorporate price anchoring

There is a psychology to pricing, no matter what the product or service is. If you are looking for a household appliance and the salesperson shows you the most expensive option first, then the next most expensive option looks quite reasonable. In contrast, that same option could look quite costly if you are shown the cheapest option first.

The same thing can apply with funeral services. Some funeral homes offer information on the basic package first and then talk about the extras. Having added those on, the overall package looks quite costly… and confusing. In contrast, if a mid-range option were provided as well as a more expensive one, a potential customer may very well choose the middle package.

Price anchoring is all about priming people to accept a certain price. It’s something you see often on the internet where companies present three or four options with the main one highlighted. Do this and not only will client families feel like they have a choice, but you might see sales of your more expensive options and packages go up.

Bundle your services

If you were planning a vacation, what would appeal more to you:

– planning every element of your trip by yourself, paying for everything “a la carte?”
– choosing an all-inclusive package that has everything you need for the trip, leaving you with no worries or hassles?

If you’re like most people, you would probably choose the second option. Product bundling is a strategy many businesses use because it sells well with customers looking for value. Even if it isn’t a better deal, the value in not having to worry about all of the individual details of something often is worth the additional price. Think about how you can implement this strategy at your funeral home.

For example, some funeral homes incorporate different packages for cremations on their pricing page, and it’s been a huge success for them. They’ve found that bundle pricing not only helped them increase sales, but now more families are opting for more than just a simple direct cremation.

Offer “add ons”

While bundle pricing works, some funeral directors prefer not to group their services due to a fear of hidden charges or lack of transparency. As with anything in life, honesty and transparency are key. Research on bundling shows that bundle pricing is only effective if customers can also get the same services separately. This helps you maintain transparent pricing for all of your service options so families feel like they have a choice.

Some funeral directors break down the costs and outline the absolute essentials a client family needs. They then add on other items that are optional, so that there is an option to select only as much as families can afford.

Offer monthly pricing

With the cost of funerals rising, it’s difficult for some client families to pay for everything up front. Maybe it’s time to consider a payment plan. Taking a deposit and letting families pay for their service a few months could be the reason families choose you over your competitor. In addition, it gives you a great opportunity to show client families the value of a prepaid plan to cover the cost of any future funeral service.

Show your value

The ultimate answer to price resistance is to communicate value right up front. Here are a couple of ways you can do this:

– Provide social proof. If others in your community count on your funeral home to offer a celebration of life, why shouldn’t they? Many funeral homes offer testimonials from real families in print and on their website to reassure potential customers that they can take care of their family and loved one.

Answer their questions. There is a mantra in web design and usability that says, “Don’t make me think!” and your website can be the perfect example of that. Everything the customer needs to know to make a purchasing decision is laid out neatly for them. All of the FAQs are right there, and if they can’t find the answer to their questions, your website makes it easy for them to contact you directly and ask.

Do this and your conversation with client families is not just about price, but also about value – and that’s the best way to win new business and turn families into customers.