Episode 3: Dan Isard and the State of the Modern Funeral Industry

In the United States today, most funerals are arranged by licensed funeral directors, most bodies are prepared for disposition by licensed embalmers, and many funerals take place in licensed funeral homes.  The funeral industry has been handling the dead in America for only a century.  This is largely an industry made up of “mom and pop” family owned businesses, passed down from generation to generation, although there are a few large companies and even a few that are publicly traded.

I thought that an interview Dan Isard, the president of The Foresight Companies and an expert on the funeral industry, would be a great way to begin to lay a foundation on Death, et seq.  We can’t understand how the world of death care may be changing until we understand how that world functions in the first place.  In today’s episode, Dan and I discuss the structure of the funeral industry and some of the challenges that it faces.

Dan Isard has been providing management and financial consulting services to the funeral industry for 25 years.  He is a frequent speaker on topics related to the funeral industry and writes a column for The Director magazine.

 

Takeaways:

⇒   Isard’s research shows that there are between 19,000 and 20,000 funeral homes, down about 10% from a decade ago. About 15,000 funeral homes are owned by approximately 9,000 to 10,000 privately owned “Mom and Pop” businesses.

⇒   About 60% of bodies are embalmed.

⇒   Number of locations is declining, total deaths is increasing, our population continues to increase and our death rate is increasing. I asked Isard: “That should suggest boom times for the funeral industry, right?”

⇒   Recent trends cited by Isard: Dramatic increase in cremation disposition and large increase in pre-arrangement, but the profitability of those pre-arrangements is decreasing.

⇒   Isard argues that in order to save the funeral services industry, we have to “blow up” the licensure regime.

⇒   The pricing of cremation also needs to be “blown up” because “burial is subsidizing cremation.”

 

Selected quotations from Dan Isard:

⇒   “[The] brick and mortar funeral home of the past is not being used as frequently as it had been.”

⇒   “We don’t see entrepreneurial activity being the mainstream [in the funeral industry].”

⇒   “The average consumer doesn’t understand the use of a funeral home.”

⇒   “The value equation is changing. Picture if you will, if you were committed to a religion and that minister led you through that service, you’d feel a value equation.  … But 30% of our society today acknowledges that they are ‘nones.’ The ‘nones’ may or may not be atheists but they are not believing in the tradition and ritual heretofore assigned to death, so therefore they aren’t feeling that they get value when a person stands up in front of them and leads prayers that don’t mean anything to them.”

⇒   “It isn’t that cremation has grown, it’s that casketing has declined. Families don’t see the value.”

⇒   “Ritual can be whatever you want it to be.”

⇒   “The next generation of funeral directors are those people that are drawn into this business as a passion and as a calling, a lay ministry if you will.”

⇒   “What we have to do is blow up funeral service to allow it to succeed in the future. We’ve got to change our licensure.”

⇒   “We have to make it easier for the people that sit knees to knees with the grieving family to help them plan a personalized funeral.”

⇒   “The baby boomer is not against tradition, they’re in favor of personalization.”

⇒   “I am very much in favor of transparency and communication. I think it benefits the profession.”

⇒   “Ultimately our society does not want to handle dead human being directly.”

⇒   “Funeral home owners and managers need to start looking at this proactively, less fear, set their prices where they need to be, or change their business models if their community will not support that business model.”