Michael Manley


Our friends at Funeral Business Advisor (including Michael Manley, a regular contributor to Final Embrace) have been enjoying continued success.

 In fact, the success is so… well, successful, that they’re increasing their page count for their January/February issue.

In a private email (don’t worry, I got permission to share this with you), Michael told me how increased advertising demand is forcing him to expand his magazine by four pages!

But it gets better for you, my readers.  Michael’s new plan calls for 56 pages, but because the printing company only charges a miniscule amount to go four more to 60 pages, he wants to offer something special to our readers.

FBA has a limited amount of additional advertising available at full-, half- and quarter-pages.  He’s also adding content, which means you’ll see some an editorial from me in those extra pages and an ad from COTCOVERS.com.

Michael has given me the ad rates (they’re quite attractive!) and has allowed me to share them with any interested readers.

Want to know more?  Call Tim (that’s me!) at 321-287-0628 or email me at finalembraceonline@gmail.com.

Time’s short, so call or email ASAP.

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One of the recent discussions here in posts and comments has been negotiating lower prices from suppliers.  It all started with a guest post, Michelle Carter on “The Funeral Director Mindset”.  Several comments were added by our readers (and we appreciate comments!), including one I reposted as Jim Bauschke on “The Funeral Director Mindset”.

We’ve also received the following comments from our reader, Paul:

Bravo.  Yes, we should be thinking more outside of the box, and challenging our suppliers. Batesville is not the only game in town, and one should constantly be looking for better pricing.  As you stated, they seem to be scared to ask, or think it might cause a problem–who is the customer??  Companies like Dell and WalMart are great at playing the suppliers against each other to get the best price.  Granted we are not in the same position, but if we took those thoughts and mindset and applied them to our FH’s then maybe we could change the game.

I agree that what I call the ‘Flintstone funeral homes’ are going to blow away in the wind if they don’t see the change in the air.  I know, they will say (of course many do not even have computers, so it would be hard for them to read this) well, that new guy does not know what he is talking about.  Hmmm, I think because you are still using your business plan from 1890, might be a sign that things might not be so bright.

This is not meant to say all ‘traditional’ funeral homes are this way, but it is amazing as I talk with people like this how much they are the same.  Same small thinking, plenty of complaining and no one doing anything about it.  Why?  “Because the Wilbert guy or the Batesville guy is ‘my friend’ and have known him forever.”

–okay folks time to wake up–they really don’t care about you or your business.  Honestly, think about it–they care about their paycheck.  Well, that may not be bad, but WE should think about OUR paycheck also.

The ‘well it’s always been done that way’ thinking is what is killing them.  I say bravo to those standing up, and willing to dump their current suppliers for another.  The margins are shrinking, and FD’s need to wake up and shake the trees.

Okay off my soapbox…

I’ve been thinking about this for a few months now.  It started in earnest with an email question that I wrote about in Can You Negotiate SCI-Level Casket Discounts?

Then we had a response from Michael Manley on a Possible FBA Buying Collective.  In the post, he describes a buying collective for funeral professionals that he plans to get off the ground in the coming years.

But all of it comes back to a basic issue:  maximizing income and minimizing cost.

As a business owner, I wrestle with keeping my costs down.  I’ve sought out lower costs by buying materials in bulk, buying from traditional retail outlets during sales and using coupons and promotional codes on websites.

I’ve figured out how much it costs me to have my assistant handle bill collecting versus the fee I’d pay for accepting credit cards, which has lead me to put off having a full merchant account with a credit card processor.

We save every peice of fabric that is cut off of our wholecloth when creating one of our quilted mortuary cot covers and look for new uses.  Some scraps (big squares) have been stitched together to form the quilts I’ll give as gifts this Christmas.  (If you’re a member of my family, forget that you just read that or risk not being surprised!)

Many of the fabrics we use are wider than we need, so we cut off a strip.  Those strips (about 12″ wide) are the perfect size for our latest product (still under wraps!) that we created after looking at our materials and thinking “What can we make out of that?”

Of course, there are opportunities to save money that we don’t take.  We could get a cheaper version of the nylon lining fabric that we use in our covers (we call it the FluidBlocker) but we’d have to sacrifice some of the protective qualities, so I said “no.”

How does this affect the typical funeral professional?

You need to keep your eyes open.  There are always methods to save money, but they’re not all beneficial and some will actually negatively impact your standing in the community.

Want to be seen as a prestigious firm with community roots?  You can’t have a crappy hearse that’s ten years old.  On the other hand, a price-focused funeral home can’t be located in a large, expensive building in the swankest part of town.

How you spend money at your firm should reflect the image you want to project.  Caskets aren’t your image; they reflect the image your client family wants to protect.

And to be brutally honest, the family has no idea who makes the caskets you carry or how much you pay for them.  Casket manufacturers have done little to brand their identities with the public, so why should you worry about the name?

I see three strategies for firms trying to decide which caskets to carry:

1.  Meet with every possible casket rep. in your area.  Tell each of them that you’re picking a brand and will be taking into account the discount offered, showroom assistance provided and speed of delivery.  Pick the one who gives you the best deal and offers the most benefits.

2.  Order caskets from a lot of different makers and have them on your floor.  Or get corners or pictures from a bunch of different suppliers.  Let your families decide which caskets they want to buy.  You might find that families choose based upon color and features (“Oohh… it has butterflies embroidered in the lid!”) and not the manufacturer.  If so, find the best caskets you can at the lowest price and don’t worry about who makes it.

3.  Stick with what you’ve been doing.  What’s the most you’ll save per casket?  $50?  $100?  Don’t worry about the small percentage you might save and use your time to do some more P.R. in your community.

Having run a small firm, I can tell you that we employed each of these strategies at different times.  In fact, our “proprietary showroom”, with fancy cut corners and pictures, often played host to several inexpensive caskets from the local casket company.

If a cash-strapped family wanted the simplest casket possible, we’d ask them what color they wanted and order a 20-guage, non-gasketed unit from the nearest independent casket company.  Their prices were half of York or Batesville and their quality was less, but not one of those families complained.

In fact, each family was impressed that they could get such a “pretty casket” for so little money.

Sure, we funeral professionals love a pretty casket (I saw some beauties in Vegas), but most consumers don’t even know how to close a lid properly, let alone discuss the merits of swingbar handles, urn corners or stainless steel.

So do what’s best for your company. 

Leading up to the NFDA convention, we had several options for advertising our booth.

 We finally chose the convention issue of Funeral Business Advisor.  What helped me make that decision?

Besides the great feedback and participation that the publisher, Michael Manley, has offered to Final Embrace, I was also impressed by the reviews of several funeral directors (they love FBA) and the unpaid, unsolicited endorsement of several of their previous advertisers.

When I interviewed Greg of 24 Karat Rose, I asked him if he read FBA.  He told me that he actually advertised in the magazine, and that it was the best industry ad they’d ever run.  The phone actually rang after the ad was placed and he sold a slew of product.

In fact, he told me that he was so used to ads costing more money than they generated that he was surprised when the ad broke the trend.

So I spent a few bucks and got our product into the NFDA Convention Product Showcase in the latest issue of Funeral Business Advisor.  It’s a good thing I did; both of our competitors, Quilted First-Call Covers and The Last Quilt Company are also featured.

Click here to see our product (and a bunch of other great products) showcased in the pages of Funeral Business Advisor.

Tim Llewellyn of FSE Caskets shares this about a Group Purchasing Organization: 

fse_caskets002003.gifI would like to add my two cents to this interesting subject. First of all I have had experience with GPOs with a previous medical business that I had owned. My business served as a primary vendor to over 8,000 nursing homes nationwide buy way of a vendor for a GPO. Our company changed the dynamics of how business was conducted with GPO members a contributed to the value of the organization.

The pros and cons of a GPO can be equally balanced in many cases but keeping the balance heavy to the beneficial side is strategic battle that takes careful planning and innovation. The value for independent funeral homes to gain the purchasing power to improve profitability and longevity rests in the ability to understand and participate in an active and beneficial Group Purchasing program.

Here are a few things that I can share:

• Providing discounted products to members can and is being accomplished at no extra cost to the members in many cases.
• Manufacturers and vendors (bound by signed agreements) participate in the GPO because they have something to gain that is offered by the GPO.
• Directors purchase directly from the manufacturers and vendors under the new GPO program structures. (The GPO has no need to be a re-seller of products and services, just a coordinator and implementer of benefits).
• The sales are tracked in a simple way that account for GPO fees.
• The GPO offers much more than better pricing on products and services, it enables both the director and the manufacturer/vendor to obtain advantages beyond product procurement.

I am sure as you continue in the research of GPO implementation you find that many of the large manufacturers do not want to see a GPO in place. This means that the manufacturers will have to compete with or join the GPO, and if they do join they would have to discount products and pay a set percentage of the sales back to the GPO.

Example: Batesville would have to take a 12% drop in profit for all the members participating in the GPO, many of which may be present customers of theirs.

Even though this is a difficult challenge to implement a convincing GPO program, it is totally possible with the right business structure and marketing plan. Creating benefits that are equally enticing and compelling for both the manufacturer/vendor and members takes more than great pricing and catalogs.

As I step down off my soap box I would like to add that a GPO is over due for the funeral industry and the benefits can be a strong advantage for independent businesses that require better pricing and support. I would be interested in assisting in the development of a GPO to ensure the health of the industry and the insurance of sustainability for continued growth.

Since my friend, Michael Manley of the Funeral Business Advisor, has been so kind as to share his plans for world domination (insert maniacal laughter here) I thought I’d rain on his parade a little.

Actually, Michael has basically (in not so many words) asked me to give him my impressions, so I’m going to do it.  Hopefully he can use these questions and the suggestions I’ve offered (without being asked) to make his plan more robust.  No sense conquering only half the world if a little tweaking could help you take it all.

If you’ve got no clue what I’m talking about, read Can You Negotiate SCI-Level Casket Discounts?, where I answer a reader’s question about creating a collective, and then check out Michael Manley on a Possible FBA Buying Collective, where Michael Manley describes the plan he’s already formulating.

Here’s a recap of Michael’s plan, as I understand it:

1.  Solicit vendor members and funeral home members using the current advertising and subscription list from Funeral Business Advisor.  The vendors will get orders and advertising while the members will benefit from group-only discounts.

2.  For a fee ($99 a month for vendor, $19 a month for funeral home) the collective will create a website to show off all the discounted products.  The collective will also have a “Buying Guide” section in the Funeral Business Advisor magazine.

3.  Twice a year they’ll publish a “Buying Group” catalog for members.

4.  The collective will handle the ordering and invoicing for members. 

And now, my questions:

1.  Encouraging a funeral home to spend $19 a month for this service means you’ve got guarantee you’ll save them at least that much on merchandise.  Without signing up every casket manufacturer (a difficult task), how can you guarantee that big a savings, especially if the funeral home doesn’t use one of the casket makers you’ve signed up?  While I know Final Embrace will be offering our quilted mortuary cot covers through your collective, I can’t imagine that even a 10% savings on a product someone buys once every few years will make up for the expense.

2.  Will you allow more than one vendor for each market segment?  In other words, will you restrict membership to just one casket maker, one cot cover maker, one fluid seller?

3.  How do you keep advertisers from abandoning the more expensive advertising space in your magazine by joining the buyer’s group?  Do you think you’ll be able to encourage companies to continue advertising in the other sections?  Or is the buying collective one way to encourage smaller companies, who might not be able to spend a lot of cash on big ads, to utilize your ad services?

4.  Will you charge a transaction fee to the vendor?  If your collective makes great strides, handling orders, invoicing and collections might cause a strain on your administrative staff.  And since they’re aren’t infinite numbers of potential vendors and clients, wild success might mean a huge strain on your ability to service the group without equal gains in cashflow.  It’s possible that charging a transaction fee after the first “X” number of orders might be more appropriate.

5.  Would you streamline the process by requiring all vendors to offer the same discount (say, 10%) or would you allow each vendor to create their own offer?

6.  Could you expand the group by buying a few pages in other industry publications and advertising the group?  This would help mitigate any credibility issues your magazine might have with people who haven’t yet received your publication.  Of course, just because I hadn’t seen it doesn’t mean most of the independents haven’t.

7.  What keeps the vendors from simply raising their price by 10% and marketing exclusively to your 17,500 prospective buyers?

8.  How will you handle firms with multiple locations?  Will they be receiving an unfair advantage because they only pay $19 for all their locations? 

9.  Now that I’ve finished giving you heck, when can I sign up?

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Michael Manley, publisher extraordinaire and frequent Final Embrace contributor responds to the recent question Can You Negotiate SCI-Level Casket Discounts? by describing a buying collective he’s already begun brainstorming:

This was an interesting post. I found it especially interesting because it won’t be long until I will make this very concept a reality, by forming a BUYING GROUP. Having been a “sales director” in a previous career with a large manufacturer in a 150 billion dollar/yr industry, I do believe this concept will work. The industry I previous worked was comprised of about 20% corporate owned business, and 80% independent.

In that industry, the independents had very little purchasing power, but in 2001 a “cooperative” formed, a Buying Group created, and it created an “equal playing field.” Maybe not 100% equal, but it was a big step in the right direction to give the little guy something they lacked- a collective voice and strength in numbers.

You mentioned that it may not be beneficial to the manufacturer, because they have no assurance that a member of the group won’t defect and go to another supplier. Two things on that point; first, the appeal or allure for a manufacturer is not to ensure that every member uses their product, it is to ensure that they have the ability to mass market to a large group of buyers (funeral directors) at one time. Also, a true buying group actually facilitates the transaction on behalf of the manufacturer, thus providing them a savings by streamlining the entire transactions. Most buying groups solicit, market, advertise, take orders, and invoice for the vendor. This streamlining of the sales process is the allure to the manufacturer, not the assurance that like SCI that once a deal is signed, it guarantees a certain amount of business. Not all buying groups operate exactly like this, but the opportunity and the advantages are numerous.

Now, you are right, it can be a daunting task to think of beginning a buying group. After all, how do you solicit both Manufacturer’s as members, and funeral director’s alike? How do you promote the group, and ensure that everyone has an equal opportunity to participate? In fact, you mentioned (IOGR). I have actually discussed this same concept with George Darte. The disadvantage they have, like any organization, is the marketing of the group to the entire industry, both supplier and funeral homes. They have members, but they ONLY have access to their members, unless they wanted to go outside of their members and promote the group.

Well guess what? I am actually deep into the process of beginning just such an opportunity. It won’t be long until you see, for lack of a better term, the FBA Buying Group. This whole idea was born out of something I realized a long time that FBA has given me; a distribution network of 17,500 funeral homes, crematories, and vendors. Unlike IOGR or NFDA, I don’t have an allegiance to just my members. Every independent funeral home and crematory gets my publication, so I can mass market the concept better than them.

I refer to this concept as the”Starbuck’s” principle. They didn’t invent this next concept, but they have done it as well as anyone. What is this principle? Not too long ago, Starbucks realized that they have 22 million individuals walking through their doors to purchase coffee or beverages each and every day. Twenty-Two Million consumers that they could sell anything to. It didn’t take them long with that market to realize that selling coffee may not provide them with the only opportunity to exploit this group. They soon began to moonlight as a CD retailer. They began selling pictures, cups, mugs, etc. CEO Howard Schultz has now gone and is doing what McDonalds and Burger King has done successfully for years. You soon will begin to see movies promoted on sleeves of Starbucks cups and on the Wi-Fi network.

Another example; I worked 10 years with UPS, my last 5 as a National Account Manager. So I have a fairly detailed working knowledge of UPS, and most probably don’t know that UPS business plan says that by 2012, over 50% of their revenue will come from their Logistics business (they set up distribtion channels for companies, handling everything from receipt of orders, order entry, warehousing, packaging, shipping, tracking, and reconciling statements for companies). They allow companies to outsource rather than do it themselves.

Point is, Funeral Business Advisor affords me very much the same opportunity. We have a captive audience of virtually every independent funeral home and crematory in the United States. We have relationships with over 100 vendors through the magazine. So with the distribution network in place, the next step is to organize my “cooperative.” It will be as simple as providing 2 very inexpensive products. One for the vendor, and one for the funeral director. Then for a very nominal fee ($99 per month for Vendor, and $19 per month for funeral director), we will do what we do best. Bring BUYERS and SELLERS together. The vendor package will include FBA advertising the Buying Group in each issue, forming the website with individual vendor pages that we will build and maintain for the vendor, being included in a twice annual “buying group” catalog, market them to over 17,500 readers, and numerous other benefits I can’t mention yet, all for less that $1200 per year. That is the cost of a 1/2 page color ad (1X) in most industry publications. The funeral home will receive a simple, but yet, important benefit. A minimum discount that each vendor will agree to offer the group. The will get a free annual subscription to Funeral Business Advisor, a free “buying group” catalog twice a year, private access to the website, full access to participating vendors, and a simple one-stop shopping mechanism for all of their purchasing needs. All for less that $120 per year, or amount they would save if they bought just one casket from our vendors.

Now, I agree this may not be on par to what SCI can bring to the table when they negotiate with Batesville, but interesting enough, I have a very good relationship with Joe Weigel, communications director with Batesville. And I have discussed this concept, and although he didn’t do back flips, he did say it was interesting concept and feels if done properly, would have a strong appeal.

Anyway, I am not an expert on buying groups, and i would be interested in your thoughts. Even though there may be challenges, I can’t help but believe our distribution network is our biggest asset. I value your advice, and we have always managed to have good conversation and exchanging of ideas. Waiting for feedback…