The State of Pre-Need, Prospecting, Niche, no matter what you sell

I had a conversation, recently, with a friend in the pre-need business.  It was interesting.  I got his thoughts on the present environment for selling pre-arrangements.

It wasn’t formal, just two guys talking about how the business has changed over the years.  My ten years, his 20 years of experience from when we first started, 5 years later, 5 more years later, and all of a sudden, we ended at the beginning.

Yes, 2010.  The beginning of the New Year and the question becomes….What is the state of pre-need?  Will the recession have an impact?

“David,” my friend said.  “it’s a different world we live in compared to 20 years ago.  Cremation, memorialization, the attitudes now compared to way back.”

“Yes,” I said.  “I know many of my friends long for days gone by.”

Yes, indeed, it is interesting because for my friend the first 10 years were the most fun and for me the first 10 years were the most fun.  But, of course, my ten years came ten years later.

But, my friend thinks the industry has changed so much that he’s not so sure about the future.

I’ve often said that the reality of selling pre-need has not changed one bit.  You see, it’s still about the basics.  It’s still about the economics.  It’s still about the type of business you should be chasing….not anything…..but business that benefits you as much as your customer.

You’ve heard me preach this thousands of times but for the sake of the first of the year let’s try it again.

If you are new or an old-timer in the pre-need business (and for those of you who keep up with this site in the car, real estate, life insurance, and other industries) the same rules apply.

Figure out what your average sale equals (average commission on that sale) and what you have to do to get that business.  How much time and energy you must invest.  This is how you can figure out what your income will be.

If you are a cemetery or funeral home owner let me repeat this for you…what type of business do you want?  If it is traditional business that’s where you need to focus all of your energies.

Forget about the pocket change and don’t even try and compete against the really low cost providers…you won’t win….and by the way, they won’t win either.

No business built on being the “lowest cost” provider has ever survived in the long run.  None.  And before you begin emailing me on some of the current businesses that will remain nameless do some homework.

Being the lowest priced in town has been tried over and over again.  Just take a look in the history books of big name businesses that have bitten the dust because someone else found a better way to provide the lowest cost items.

There’s no loyalty in “CHEAP”.

I’ve been doing an experiment with a low cost (I mean very low cost) provider.  I’ll update you in a few months.  But for purposes of this conversation it isn’t working.

Cheap doesn’t work in the long run and it won’t get you any loyalty either.

Anyway, I digress.

We were talking about my conversation with an old-timer about the current pre-need selling environment including some attitude changes.

I took a marketing course in college once that described the life cycle of a business (and product).

The theory was that in the beginning you have a star, followed by a cash cow, and ultimately it becomes a dog and dies out.

Unless the product is reintroduced it will remain dead until it’s abandoned and forgotten about all together.

We had been studying about a certain soap that had been around for 100 years.  It was the top selling soap until all of a sudden it was losing market share quickly.

Finally, in a desperate bid to save it the company reintroduced it as a low cost brand.

For all my college years this really was fascinating because my teacher said it was a brilliant strategy.

But, if the teacher had thought about the strategy he would have ridiculed it because the company never recovered the product.  Yes, it is still around as a low-end alternative but none the less the profit margin is so low they have to sell truck loads just to make a couple of bucks.  For you owners out there that’s the problem with low cost strategies.  You make almost no profit and in some cases lose money and hope to make it up in volume.

What the maker of the soap should have done was reintroduced the new and improved soap and “niched” it for a particular segment of the population.  When you niche a product you’ll typically sell less but for more money and higher profit margin. 

In the deathcare industry traditional ground burial (mausoleum) offer the highest profit margin.  Are there as many traditional burials as there used to be?  NO.  But that doesn’t mean there isn’t a strong niche for this type of product/service.  One key to capturing this market is to know who your customer is and how to communicate your message.

That’s what I shared with my friend who had been in the pre-need business for 20 years.

“You’ve got to reinvent yourself”

He didn’t necessarily agree but I can assure you that the reason was simple.

When you reintroduce yourself you’ve got to figure out a way of prospecting for new business in front of the correct crowd.

That’s the real secret to selling pre-need (or cars, or real estate, insurance, you name it).

It’s about Prospecting in front of the right crowd likely to purchase from you.

I’ve heard it said that you need the correct:

• group of people
• and message to those people
• and delivery of the message

Niche prospecting is locating a group of people likely to purchase from you, develop the message, and deliver the message.

We’ll be discussing this and a lot more about how to locate the “niche” group in the coming days.

And, yes, I’ll be talking more about the long conversation I had with my friend about the present environment for selling pre-need.

Until Next time…Happy Selling!

David…

P.S.  I preach this a lot but because it is the first of the year and I need to bring it up again.  If you want to see a Doctor would you want that Doctor to keep up to date with all the latest doctoring advances.

Just because you’re in sales doesn’t mean you need to stop learning or re-learning.

What I’m saying to you is to invest in your SELF.  No one else will.  You’ve got to do it your SELF.  So, if it’s a book, a tape, a conference, or combination, training classes, start now. 

I’ve got stuff to help you.  Check out the catalog page but don’t get CHEAP like the low cost providers.

And, for Pete’s sake, don’t become obsolete.  Invest in YOUr self so you don’t become obsolete!

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