Aug 22, 2017
ASD is pleased to share this Guest Blog post from Glenn H. Gould, CEO of MKJ Marketing. Founded in 1982, MKJ has assisted thousands of funeral homes, cemeteries and death care industry vendors to accomplish their marketing objectives using Market Research, Advertising, Website Development and Training Programs. In this guest blog post, Glenn discusses the importance of customer loyalty and different strategies funeral directors can use to retain it. Glenn draws several parallels between funeral service and the auto industry to demonstrate how essential it is for all businesses to give customers a reason to come back again. He outlines some potential barriers that might prevent a family from giving their business to a funeral home twice and offers suggestions for analyzing customer preferences.
Guest Blog Post: Making Loyal Families A Strategic Objective
Every business wants repeat customers; but not every business makes it a strategic priority.
Recent research studies conducted of car buying consumers discovered that approximately 60% of new car buyers will return to the same auto maker for their next car, but some auto makers enjoy greater customer loyalty than others; the difference is not by chance, instead the auto makers have given consumers reasons to be loyal.
The top ten auto makers with greatest customer loyalty in descending order are:
Ford enjoys the highest level of customer loyalty with slightly greater than 60% of Ford owners indicating they will return to Ford for their next car. Why? Primarily because Ford has such a broad line of vehicles from the smallest fuel efficient, trendy models to the largest, most popular trucks and SUV’s. The broad line means any customer can find a vehicle that meets their specific requirements; so, experienced Ford owners comfortable with the brand have no reason to go anywhere else. Selection is critical; if you can’t be the best, have the best selection.
Mercedes Benz is the Ford of luxury vehicles; a very broad line of models including large, commercial vehicles. Again, the luxury car buyer can find a car that meets their specific needs without going to another brand.
There was a time when luxury cars came with the promise of longevity; Mercedes were purchased to be driven 200,000 miles by the original owner. But times, and auto technology, have changed. Today the luxury car buyer (or leaser) is less concerned with longevity and more interested in the newest digital technology. Luxury vehicles today are built to go 100,000 miles; after that its constant repairs.
The middle-income buyer (not the luxury buyer) is interested in longevity, which is why Toyota has a loyal clientele. Toyota buyers want full and mid-size vehicles they can depend on for a decade or longer. Camry’s and Corollas are built for long use which is the basis of there customer loyalty.
Nissan is less expensive than Toyota, and has a broader product line.
Chevrolet has the largest volume sales, and highest customer loyalty within the General Motors brands, and a very broad product line ranging from Corvette’s to Suburbans. One reason their customer loyalty is lower than Ford is their competition within GM; every Chevrolet model has a competitor wearing another GM badge.
Subaru has a limited line of vehicles but they are in the most popular niches. Subaru has developed a cult like following like Volvo and Saab in the 1970’s. Subaru does not claim to be the best car or the best value; instead they differentiate themselves from other auto companies by making the “Subaru Love Promise” which involves contributing to civic and ecological charities. It’s a risky long term strategy as it might not translate well over the long term; but on the short term 50% of Subaru owners are committed to buying Subaru again.
BMW has a similar cult following based upon performance and speed. They have a limited line that includes only a few SUV’s with the concentration on sport instead of utility.
Honda has a very limited product line, and they are slow to change technology and styling; but they are very popular with women and represent a good value.
Lexus loyalty is based upon customer service and quality. They are built as well as Mercedes, and as fast as BMW, but their competitive advantage is customer service before after the sale. For this reason, Lexus RX 350 is the most popular SUV in the world, and very popular with women buyers.
Hyundai is buying customers with greater value. Several of their models come with 10 year warranties, and all their models include more features than competitive models and the Hyundai costs less.
The take away is that auto companies with loyal customers have given their customers a solid, tangible reason to be a return customer. Many funeral businesses want return customers, but have not made it part of their long-term business strategies. Building long term loyalty means eliminating reasons why families would consider another funeral firm:
• Change in ownership; consolidation is a reality in our industry, but acquisition will cause families to select another firm.
• Staff turnover; the second most common reason for preferring a funeral home is knowing a staff member.
• Incompetent staff that fails to meet the customer’s expectations of professionalism and creativity. One of the factors contributing to the increasing cremation rate is the failure of staff members to meet families’ desire for creative, personalized services. Frustrated affluent families decided to hold memorial services at country clubs and other alternative locations.
• Out of date facilities, or poor locations. There was a death care industry building boom in the 1980’s, 1990’s and presently, all caused by changing downtown populations. Funeral businesses that expect their families to return to the old neighborhood will be very disappointed.
• Affordability; the rise of discount funeral homes has caused consumers to think more about price. Because price advertising from the discounters has been so direct, many funeral home owners feel their advertising should not include prices. The objective of price advertising is to educate the consumer as to your affordability, which is very different than trying to get customers purely on price. Hyundai buyers don’t start out at Mercedes dealerships; instead they start out at Honda or move up from the used car lot. Funeral homes need to move families up from the discount funeral homes before they become accustom to the lower level of service and become return customers.
Car buying and funeral service are analogous as both represent major consumer purchases for the middle-income family. They both offer the opportunity to save thousands of dollars, which can represent a significant per cent of their annual income. Because the auto industry is so much larger than death care, we can learn much about long term marketing strategies.
When lamenting the passing of customer loyalty, the change isn’t so much with the customer as it is with the business. If we want the customer to be loyal, we need to give them tangible reasons to return. The first step is to understand why families prefer your firm, and why they prefer a competitor. This information can be difficult to gather without consumer research, but without consumer data, it can be impossible to create productive long term plans.
About Glenn Gould
Glenn H. Gould, CEO of MKJ Marketing, is routinely sought out by owners and managers in end-of-life care for his research and strategic planning. He has conducted more than 600 Market Profile and Prospective Trade Area studies in the US and Canada as well as moderated and created research reports on 100+ test panels and focus groups sessions for various vendors, cemeteries and funeral businesses and associations. Glenn’s articles appear regularly in all of the major industry publications, and he is a frequent presenter on funeral service marketing at seminars and conferences. His books Deathcare Marketing, 25 FAQ’s and Funeral Home Marketing: Moving the Bottom Line serve as textbooks in mortuary schools throughout the U.S.
About MKJ Marketing
Founded in 1982, MKJ Marketing has assisted thousands of funeral homes, cemeteries and death care industry vendors to accomplish their marketing objectives using Market Research, Advertising, Website Development and Training Programs. Over the years MKJ has received nearly 100 advertising awards and citations from The National Advertising Federation, CANA, ICCFA, and other organization for our outstanding creativity and production quality, particularly in the area of television and industrial films for death care vendors, such as Wilbert Vault Company and others. For additional information visit www.mkjmarketing.com or telephone 888-655-1566.
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About The Author
Jess Farren (Fowler)
Jess Farren (Fowler) is a Public Relations Specialist and Staff Writer who has been a part of the ASD team since 2003. Jess manages ASD’s company blog and has been published in several funeral trade magazines. She has written articles on a variety of subjects including communication, business planning, technology, marketing and funeral trends. You can contact Jess directly at Jess@myASD.com