With approximately 269,000 deaths every year, the funeral industry is worth $1.6 billion in Canada. It might be a profitable industry to be in, but funeral home directors still face challenges, like finding a way to collect payments quickly, upsell, reduce fees, and meet customers’ evolving needs.
In fact, the majority of funeral homes struggle with one, several, or all of these five common payment processing challenges.
Family members want top-of-the-line funerals and burials for their loved ones -- and Canadians aren’t shy about paying for products or services with a perceived value. Unfortunately, the final tab for a funeral can come as a big shock.
This is especially true if family members want the high-end casket, the expensive grave marker, the flowers, the DVD tributes, and the memorial books.
The problem is they might not have the cash upfront to pay for it all (or any of it).
When they’ve already blown their budgets on Uncle Bob’s casket and burial plot, they might have to say “no” to the $2,000 flowers they really want. In a situation like this, you might compromise and offer them the $500 worth of flowers they can afford -- and lose out on $1,500.
It’s difficult to give customers the high-end funerals they want when you don’t have the ability to offer financing. It’s easier to upsell when your customers can be instantly approved for financing at the payment terminal, so they can pay over several months instead of upfront.
2. Getting paid
While many people prepare ahead of time for their eventual funeral costs (Ontarians have $2 billion invested in pre-paid funeral arrangements), death is often sudden and unexpected. Not only is it an emotional time for the families of the loved one who has passed on, but it’s also often a huge financial burden they haven’t prepared for.
You might offer your own financing plans to help families pay for the costs of funeral arrangements when they don’t have the money upfront. While this offers the customer more convenience, it can come back to bite you if those customers don’t make their payments. It’s said that 80% of customers don’t pay their last financing payment to funeral homes. That’s a loss on your books.
How much are you losing because you’re offering your own financing? The better bet is to work with a third party, so you can lower your accounts receivable, get paid instantly, and let the financing company worry about recouping the payments.
3. Limited payment options
If you give families good choices, they’ll remember your funeral home at the end of the day and may return to you the next time a death occurs.
When we say “choices,” we don’t just mean offering several options for casket liners and pillows. We’re talking about payment choices.
While credit and debit are still popular means of payments, today’s digitally savvy customers are demanding more ways to pay, including Apple Pay, WeChat, Interac e-Transfers, and Alipay.
Offering them the alternative payment options they’re looking for can help you upsell and give your customers relief at a difficult time in their lives, which they’ll not only appreciate, but remember.
4. Accepting online payments
The funeral home industry has been stagnant for decades. Ten years ago, it would have been unthinkable to price shop online for caskets, let alone purchase funeral services online.
But times are changing, and the traditionally staid industry is being shaken up.
Today’s families are busier than ever before, and it can be difficult to find time to run errands. It can be even more difficult to find the energy to leave home when you’ve just suffered the loss of a loved one. Online funeral payments are more convenient, so they are often the go-to choice for consumers.
More funeral homes today are taking their products and services online and enabling online payments to stay ahead of the technological curve and meet evolving customer demands. It’s a good idea to consider taking your funeral home online and offering more convenient payment methods in an effort to avoid losing customers to a more tech-savvy competitor.
Plus, you’ll also benefit from instant payments. With online transactions, you don’t risk having a cheque bounce due to insufficient funds. The transaction is immediately confirmed, and you have access to the funds right away.
5. High processing fees
Of course, it’s every funeral home director’s dream to generate a profit while keeping costs low. After all, that’s the key to running a successful business. Unfortunately, there’s a cost to doing business, and in this case, it’s the high price of payment processing fees.
Processing fees vary widely, and some fees seem to go by mysterious and suspicious names, making it difficult for you to understand exactly what you’re paying for. Add to that the fact that the fees are based on a variety of factors, including business type, method of accepting payment, card type, average transaction size, and more, and it’s easy to become overwhelmed (and confused).
While there might be a cost to doing business, make sure you work with a provider who is happy to spend the time required to discuss how each fee works and why you’re paying it -- so you don’t get gouged.
As you can see, funeral homes face many payment processing challenges. Some are relatively unique to the industry while others are more widespread.
Either way, these problems could be affecting your ability to accept payments quickly, securely, and in an affordable manner. It might be time to find a new payment solution for your funeral home, so you can skip the headaches and boost your profits.