The phrase of the day...WWW-MD

There’s a famous saying in Sunday School circles, “What would Jesus do?” abbreviated “WWJD”. People wear those initials on bracelets and charms as a reminder to think before they act, seeking better answers to life’s challenges in the teachings of Jesus. Well I think I’m going to adopt a new phrase for myself when dealing with salesmen, “What would Wal-Mart do?” or “WWW-MD”.

Recently a salesman presented me with a new register book concept in late prototype stage. [Note: I will not mention the company’s name because the product and pricing may well change before final release.] Full color, beautifully designed, organized so that families could add special “chapters” or theme pages designed to capture special attributes of the person remembered in the book (for instance, patriotic, special holidays, special vacations, marriage, 20 in all). Very comprehensive and again, very beautifully designed. However, the pricing is dramatically higher than what I pay today.

Here’s a portion of what the salesman wrote to me yesterday in response to my questions about pricing [Note: the numbers here are for illustration purposes only]:

“As for your mark up and what it costs a family?  Well that's relative.  You can buy a book for $20.00 and triple it and make $40.00 or you can buy a book for $40.00 and double it and still make $40.00.  The difference is about $20.00 to a family.  However, they get a much better value with the latter because they're getting dollar for dollar value for the additional $20.00 netting 50 cents in merchandise per $1.00 spent as opposed to 33 cents per dollar spent on the cheaper book.”

On the surface that sounds “reasonable”, but let’s turn this around and ask the “WWW-MD” question. Would Wal-Mart accept the idea that their costs would DOUBLE on a product and in the process they would make no additional money? No, they would not, so why in the world should I accept this form of cockeyed salesmanship? I shouldn’t and neither should you.

Doubling the company’s cost of register books (or any item for that matter) while seeing no improvement in profitability means your company has ended up losing money. At the very least you have to carry an inventory, so instead of tying up $2,500.00 in books you tie up $5,000.00 in books. This doesn’t sound like a lot but if you let that happen over and over again in a number of product areas, service prices have to go up in order to cover the cost of that money now “invested” in paper goods and lost to the operation of the business.

It is TOTALLY UNREASONABLE for vendors to come to our places of business and try to feed us this line of nonsense. Adding value means that EVERYONE—including the funeral home—gets to benefit. The family gets a better product, the funeral home adds profitability and the vendor gets to make money, a good old fashioned “win-win-win”. This other nonsense of the vendor makes more, the family gets more and the funeral home sees no benefit has got to stop. This only drives up service fees to cover the lost profitability and worst of all, that puts more and more financial pressure on those in our communities least able to afford funerals. That’s just bad business all the way around.

So start asking the “WWW-MD” question and see if that doesn’t change your perspective on how you care for your business, always remembering that a well run business has more, not less, to give to the families served.

Comments

[Englebert]

BRAVO BT! We can always count on you to tell it like it is. I hope that salesman reads this post and realizes had ghastly unreasonable he is being. You need to put food on your table just as he does while also meeting the value expectations of the families you serve.

[Robin Heppell]

BT...

“The real supplier is in the mirror!”

I always appreciate your way of examining an issue and putting it in a real world perspective. Your thoughts opened up some huge issues that plague our industry, and it is not the suppliers’ fault, they are just offering items that funeral directors want.

My take is that when the FTC rule of itemization was decreed, funeral directors didn’t know how to best price their services and merchandise separately. So who do they turn to for advice? The Casket Gods! – Not their fault, they are just serving their clients. Now, I am not sure if the calculations were done on purpose, but when the pennies hit the floor, two-thirds of them landed on the product side. The outcome was a 200 to 300% markup on those products. It is not a very good business strategy to starve the service side when you are in a service business.
The two main results are first, the dependency of funeral homes on merchandise suppliers as a large portion of profit comes from their products. Second, with so many eggs in the funeral product basket, our customers are telling us that their appetite has change and they don’t like buying over-priced eggs.

The way that funeral homes price their offerings – it should be called the “Funeral Product Industry.” Forward thinking firms have made the shift – moving the pennies over to the service side, and only having modest markups on products – this includes SCI. The new problem lies in that if you are going to charge more for your services you better provide service that has value to your families! For far too long the flow of education and advice has come from the vendors – I have sat in on many “product knowledge” days at the funeral home where the sales rep educates us on the features and how to convey those features into benefits for the family. How come there are as many “Service Knowledge” days where the funeral home owner or manager or even a staff member educates the rest of the team on different ways provide better, more creative services for their families?

Why? Because that takes effort. It’s just easier to look for the silver bullet from the vendors. In reality, the funeral home has all of the ammunition that it needs – its people.

When I signed up, it was for “funeral service” because we serve. We will never be a profession as long as we rely too heavily on products – in other professions it is about the people, lawyers, doctors, accountants.

So don’t blame the suppliers too much BT. We have looked to them for advice and answers for many years. Your example is just a company trying to provide something that its customers want. The real supplier is the one providing service to their clients – are they offering the latest and greatest in funeral (not products) services?

...Rob