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Jake shares his insights and study of Customer Service and the approach he and the team at Johnson Consulting take to improve customer service internally and how they help funeral businesses do the same. He then explains the financial impact that an increasing or decreasing level of customer service has on a firm’s profitability and eventual valuation.
For more information about the Johnson Consulting Group, check out the website or contact Jake at jjohnson@johnsonconsulting.com or at 1-888-250-7747. For more information about J3Tech Solutions’ Performance Tracker, book a demonstration with Lori Salberg in her calendar that is convenient for you: https://meetings.hubspot.com/lori123
See the complete transcript here:
Rob Heppell:
Welcome back to the Funeral X podcast. I am Rob Heppell and I am joined with my funeral results, marketing business partner, Jake Johnson. Hey there, Jake.
Jake Johnson:
Hey Rob. How’s it going?
Rob Heppell:
Pretty good. Things are good and joy. Some good feedback from our previous episodes of the podcast. I think people are getting to hear us and ask questions and things like that. One thing that we should talk about is customer service.
I know that Johnson Consulting and Performance Tracker, that’s a big focus of what you do in the overall part of the success pillars that you promote there at Johnson Consulting. I thought maybe you could dive into that a little bit more and let the folks know how that could help their funeral operation.
Jake Johnson:
Absolutely. Whether it’s the Funeral Results Marketing or Johnson Consulting or a funeral business themselves, the way the world is going, as we all know, people expect to understand what’s the price and be very transparent what they get so they can compare, look online, all these things that are going on.
Customer service really ends up being to me, that frontier that people can’t take away from you. If you’re good at it, especially in a funeral business, they’ll come back. They’re going to come back and we know as funeral businesses, they don’t come back too often. We don’t want them not coming back the second time in their life to the funeral business and how are we going to do that?
Through everything that… It’s interesting. I’m going to pause and just talk about what suffers with everything that’s going on in the world, where everybody wants to automate things and they want answers quick and they don’t want to pay a lot of money for it.
They want all the transparency and they want to be able to compare it and they want to look online. To me, the thing that suffers, if you’re going to offer all that, 100% is the customer service stats being an issue. Because to me, it’s funny, I’m oversimplifying it when I say this, but my brother’s restaurant I said, “Wow!” We were talking about a restaurant that really just had bad customer service.
I said, “What is that a product of?” He said, “Well, there’s just not enough help.” “Well, that can’t be that hard.” And he said, “No, there’s just not enough help.” I know it’s a little more complex at a funeral business, but we all know how hard it is to find people and how busy we are.
Rob Heppell:
I think too, Jake, especially with the pandemic and having funeral directors in a lot higher demand, when a funeral home is short-staffed and still has the same or higher call volume, that customer service is what gives away. I’ve heard folks saying that now, sometimes they’re dealing with less star ratings because they are short-staffed.
Jake Johnson:
Right. Well, as a business owner, don’t be the one that says, “Well, we just do a better job.” How does that resonate with the consumer who assumes that any business that’s in business does a good job. And so how are you truly differentiating yourself? There are ways with customer service training that’s out there.
We do it at Johnson Consulting, but there are others that do it. There are books that you can read. A good book for people to read is John de Julius’s book called Customer Service Revolution. I suggest people who listen to this ought to pick that book up and read it. There’s training that occurs behind that and certifications that we’ve gotten. But we went through that experience, what John does, and it’s quite transformative the way he does it for companies like Chick-fil-A and Starbucks and what have you. Companies that we would associate with high customer service.
Really, going back to your point about the four pillars that we have at Johnson Consulting, the reason we created them so far back in the day was to compartmentalize what are all the different things that can occur within, in this case, funeral business. You’ve got workplace environment issues or things or improvements that can be done. You’ve got marketplace things that you can work on with your competition or you will be at your pricing or what have you. You have your financials and the metrics and data that you get from your financial information to help you make decisions and plan and last but certainly not least it’s customer service.
It’s certainly, I would say number one. My father would always say and others have heard him say this, that if you take care of the customer, they’ll take care of you. I think that’s very true to funeral business. When Rob, you did funeral arrangements, I did as well. The thing that gets a little hairy when you’re doing a funeral arrangement is you’re in this realm that not that you can make a mistake anywhere you work, but when you make a mistake at a funeral business, it gets a little more amplified. There’s a lot of emotion that’s involved.
And so when I was doing funeral arrangements, it was hard depending on what the options were, how many I was going to provide, that I understood. And certainly the communication. I think the one thing that if anybody would get anything out of this podcast today is how important communication is both internally and externally to your customer. Every debate and argument in the world, whether it’s a funeral service or otherwise is a matter of communication or lack thereof.
That’s why I think today, talking about this with customer service is so important. I always like to say job one then really in summarizing all this at a funeral business is exceptional customer service and then it’s paramount to everything that we do. It’s your greatest competitive advantage is what I like to say.
I think the thing that resonates well with customer service training is if it’s not the reason your employees are there, then they’re probably not the right employees. It’s why I always like to say, why are we here and what are we doing? And we’re solving a problem as, as Todd Van Beck would say. We want to solve it and we want to give them good customer service delivery.
There are so many things you can bring into a funeral organization to help improve and advance things. But I think if customer service is not at the levels that I’m going to explain, then there are things to work on there that if you just simply did that, as I said, the customers will take care of you. What has been your experiences on that? That’s kind of my thoughts to begin.
Rob Heppell:
For sure. From the Funeral Results Marketing side, we try to, as a baseline, serve our clients, our funeral home clients as they serve their families. We want to hold ourselves up to the same level of service that they’re used to giving, that they would also want to receive that.
Now, one of the great things Jake about our partnership and working together with you and your team is that we’re also seeing now this larger umbrella and frameworks of running successful enterprises and from going from starting ground up, you try to do the best you can, but you don’t always have that framework in place. You do the best you can and you grow it. And I believe that we have always given great customer service because we try to emulate what they would do with their client families.
But now, it’s also great to see from this side now of like hey, there’s this greater framework that we can fit these, our services in and how we communicate and serve our clients and what we’ve learned from you. It’s like going back, when I went back to business school I learned a lot on my own and working at the funeral home and strategy and marketing and that. But then you get a new set of tools that it just makes it easier to work, whether it’s your strategic planning analysis or Porter’s Five Forces or whatever, it makes a lot of sense. I love how you have that broken down and one of the pillars is the customer service pillar, which is our focus today.
Jake Johnson:
Absolutely. It creates good alignment and everybody can… Like I say, everybody can get on board with a customer service initiative at the funeral business. Whether they get on board with packaging or pricing or some of the other things while they’re equally or can be at certain life cycles of a business, even more important. Everybody can get on board with a customer service discussion and how we can be better at what we provide. Whether it’s at my funeral home or the consulting company, we take 30 minutes every Wednesday and we talk about customer service that we see and we provide kudos and discussion on who went above them on, because it’s not just the external customer, it’s the internal customer within an organization depending on the size and the communication between the prep slip and the work being done in the prep room and the service team and the arranger.
Again, communication is so key to that and notes and all that stuff. But the first thing that was an interesting revelation as we dove deeper into this at Johnson Consulting to figure out how to enhance our culture with customer service is a notion called service aptitude.
But basically, what is the person’s ability to see these or see and exceed customer expectations regardless of circumstances? And what was interesting about that is that we can sit there as an owner or an employee. Just somebody within the funeral home or cemetery and we can say, “Well, wow! I can’t believe that’s how they would’ve done that service.” Or, “Wow! They really go above and beyond.” It can be frustrations or just aha moments as you see other people working and how they look at handling a situation.
The discovery, when you read, read this book is that you have to first understand, it’s kind of like doing a DiSC profile. Because DiSC profiles aren’t meant to judge whether employees would be hired or not. They used to understand who it is that you… So you understand how to do effective communication.
You look at things like a person’s life experiences, their current work experience, past work experience and you can look at this and say wow, so now I understand when this person goes in and they sell the cheapest casket on the floor because caskets aren’t valuable to them. And the next one goes in and it’s all the value to them. It’s their own life experiences that are dictating that.
Rather than that, we are judgmental at one person’s choice over another on our staff, certainly to understand where they come from, how they see the world of value from their own life experiences and how we can help them see or rather that those life experiences, they don’t use that as judgment on what’s best for the customer.
Because in fact, when you look at that and you say well, the customer has their own life experiences and past experiences in their own jobs or how they grew up. That’s how one can be really making one decision that’s an average sale of whatever, $2,000 more than another. A matter of value and sometimes we’ll take it real personal. But I think when we identify that these type of things exist, then the question is how can we create stories within the packages we have or the services we provide or explanations when we’re sitting in the arrangement office so that we can almost like you’re defaulting to those that might have the lesser value experience, so they see things in those low-value prices thing, that’s all that they can afford or they should get.
What are those stories that you can build that address everybody equally so you’re getting great presentations and you’re taking them on a journey. You’re not selling them anything. Last thing somebody wants to be doing is being a salesperson that’s a funeral arranger. It was an interesting aha moment for me, to first understand that we needed to understand the customer and also the employees and how all of them have their own experiences and see things of value differently.
Rob Heppell:
I was just going to say absolutely. It’s just really important to connect with… I would guess that most funeral directors are there to serve people. They’ve got that going, but then there’s the business element that goes in there too. It’s that delicate way of making sure you’re presenting everything to those families and that’s great that you said to wrap stories around that for all the different packages.
Jake Johnson:
Well, I think so if I was sitting down with all my arrangers, I’d say, “Guys, we all have our differences in where we see things of value and where we don’t. Let’s talk about that for a moment.” You could have a fun session about that and then say, “Now guys, let’s talk about that as it relates to our own customers that come in. Should we ever be assuming what they should need based on our own life experiences when we don’t even know their own life experiences?”
I think it’s just an interesting way to look at value in general and the customer experience that is expected with the expectation. That’s the first thought. But when you go through that and then the next thing is you want to have a customer service vision at the business. This is something that represents your existence, the core, why your firm’s there, something that everybody on the team can get behind.
We talk about vision statements, examples, such as guiding families with compassion and care, impacting families from beginning to healing. You come up with your own vision statement, but people will say that they… And we do. We do customer surveys. And that’s very important, but that’s not the only thing that’s going to drive… That’s not the only thing you can use to make sure that customer service is at a high level.
It has to be ingrained, it has to be part of your culture within your organization. If it does, then I’ll go back to this phrase, which I’ll probably say again, then those customers will take care of you.
You’re reflecting on people’s life experience, both the customers that come in and the employees within the business, you’re creating a vision statement. And then you have, we call the customer service pillars and the standards, what we do within the organization. This one to me is like, it’s from you walking through the entire customer journey. It’s great. You can sit down in the table and everybody do it, or you find somebody to bring from the outside, help.
But sit down and take the entire customer journey from the initial time they contacted you, whether it was on the website or a phone call all the way through to continuing care or aftercare. Who is that customer touching and how are they getting handed off? Is it a cold transfer or a warm transfer?
There’s more to read on that. How is it seamless and is it well understood, where they get to the end and it just felt like a very seamless well-executed story from the moment they went to the funeral home until the end. Well, I think we all like to think that customers just want to come to a funeral home, but my guess is nobody… I would say, nobody wants we have, but they need what we do.
I think that’s why too when we do customer surveying, always the lowest score is the first point of contact. It just always is. Any firm, whether they’re scoring very high or very low, the worst score is always going to be the initial point of contact.
I think that’s driven by the fact that they would prefer not to make that call, to begin with. And so as a human being and I’m no psychologist here, but I’ve got to believe, calling a funeral home after your mom died and/or dad or close family member has got to be in the top three most uncomfortable things to do, I’m guessing. We can all take it for granted in a way because we do it every day but it’s not easy. That customer service is huge.
Rob Heppell:
I never thought of it this way, Jake. The person on the funeral home end of the phone could be excellent and doing everything they can. But what I think what you’re getting at then is it’s the state of mind of the client family who’s doing this…
Even though the first call could have gone perfectly on the funeral home’s end, it’s just such negative or hard, probably they’re most anxious about it, making that first call.
Jake Johnson:
I think there’s hypersensitivity in either direction. I think it’s why funeral homes have such high customer service. And when they have bad customer service, it gets deep and it goes dark real quick. They’re very hypersensitive. I say the training, but let’s get real. Let’s say if the culture is there, I think it makes a huge difference. So the training can create the culture, but once the culture’s there, I think the other thing it does, is it really… What happens is your culture starts holding your people accountable. It’s like this automation, this artificial intelligence that you build in your organization about the expectations of how to take care of a family and it’s high and nobody wants to let anybody down because everybody’s doing it.
That’s why it’s something more than just a system you put in your company and it has to be part of who you are and that vision statement.
It was a cool thing to look at it and go deep like that. I think the thing I love to talk about is when we get into what is the service standards that we should have within the organization following that customer journey and then in each of those parts, what are defects that can happen?
We need to be honest and talk about them. What are the defects that can occur or have occurred in this part of the process, whatever it is? It’s the first call or the earth arrangement or it’s heading out to the cemetery or whatever it is. And then the fun part is what would above and beyond look like where we really went beyond what we had or needed to do. Where did that make a difference in the customer journey?
Literally, you document all these things and you put them in these columns, service defects, the standards of what we need to be operating at a minimum. And then if we want to go above and beyond, and I think it’s a very transparent way to say, “Here’s where we want to be. Here’s where we minimally have to be and here’s what’s going to happen if we do things wrong.” When you do that, it’s building your culture and you’re serving. That’s why you see a lot of this starting to get tied to incentive compensation, quite frankly.
Rob Heppell:
Jake, so you’ve separated them into like these three pillars say and as you work on each one of them, can you actually see, especially from the surveying side afterwards, can you actually measure like an improvement in each one of the areas? And then, I think we’ll get into this later, but how it affects the enterprise overall. But can you see these little bumps and lifts as a dial in one of these three pillars?
Jake Johnson:
Absolutely. And to your point, there are two ways. So one is your surveying and within our survey process, we use out of a thousand point scale, we use net promoter score, what have you. There are absolute benchmarks to those that follow regular service standards. In ours, I want to say it’s in 930 out of 1000, something like that. 920 out of 1000.
Above and beyond, you see funeral homes that are like 970, 960-970. Very high. And then the service defects, we always would say, if you see anything with an eight in front of it, like 800, 890, 899, even dare I say, even 900, depending on how much you want to elevate your customer service experience, you can tell which end of the spectrum they’re on. You can tell which one’s got service defect issues, which one’s standard, which one’s above and beyond.
We can do that because we send almost 200,000 surveys a year. If benchmarks was ever a reason to understand things, which it is, that’s what we get. We understand and see what the exceptional funeral homes are doing that are going above and beyond on, which is pretty cool. Absolutely.
To the latter point and I’ll get to it, but there’s absolutely a correlation between a lost family and equity value in a funeral business, for sure. Or gaining families, for sure. The thing is our customers are always dying. It’s just magical that it always seems to be about the same every year, but where there’s no guarantee anybody’s coming back outside the preneeds you’re writing.
Which is I think why the bigger organizations that have become less… Where the owner’s not there anymore or it’s owned by a publicly-traded, naturally doing preneeds is a very important part. It’s important for all of us, but I think very important when that person’s name on the sign may not be there anymore, or it’s… Enough said, it’s just really something that needs to be done.
Rob Heppell:
Before we go away from those three things, any examples that you can share about what you’ve seen in the above and beyond?
Jake Johnson:
Yes, this would be a parking lot attendant and I’ll say small things, like a parking lot attendant and all services or… Let me think of what else, post staff huddles after services, all family serve coffee or something on-site or providing boutonniere corsages to the pallbearers or gloves. There could be all kinds of things. That’s the fun part of this especially if people on this call are in forums or they’re in organizations like selected at funeral homes or others out there, there are funeral homes where you can collaborate on this stuff.
I think the one report that we do every year is we take all the data we get from our surveys and we report on it. We show what are high level funeral homes performing at, what is the average, what are we seeing in a trend, things of that nature.
It’s the little things, but it’s definitely standards. The communication is high at these firms. And the attention to detail is flawless. You walk into and one that comes to mind back east, which had very high customer service and just nothing was out of sorts in the lobby that it was impeccable, just from front to the back of the house, to the way people dressed. It was just next-level stuff.
Once you got done with that tour, you’re like, “Well, there’s no… I’m not surprised. This place has high customer service.” they feel like they’re the best and that they offer the best and they talk about being the best and they show like they’re the best. Quite frankly, with their scores that they had, they really seem like they were the best.
It’s pretty cool. I think the big thing when you’re driving this culture is and I mentioned about the ones above and beyond, but are you having daily morning huddles or huddles after the services. Is the management team meeting if it’s a larger organization or regular staff meetings once a week? Are you staying consistent with that? And then having that weekly customer service meeting. It’s so important. When things break down and when you have these meetings, I always like following a format that…
Too bad it wasn’t in a different order because there’s a purpose behind this, but it’s called the RPI format for meetings to talk about issues or things that are going on at the funeral home or kudos or what have you. But the RPI order instead of RIP order, which I would prefer because it’d just be easier to remember is you start with meetings with results. That’s the R. And then your next one is the progress that’s occurring with. If you’ve got a customer initiative going on or you’re trying to get out more in a certain part of the community or you’ve got initiative that’s going to Excel customer service.
It just takes some time on top of the day job. What’s that progress, maybe something in a strategic plan? And then the last is the issues because if you start with issues, that’s why it’s the RPI format, if you start with issues, I think you never get to the others sometimes. But anyway, those are what I’ve seen out of effective meetings. But another part I can do here, Rob is share with listeners and just what can this mean as far as value impacts both positive and negative. Do you have any other thoughts on things you’ve come across with customer service?
Rob Heppell:
No. No, I think that’s great. I think because this is the exciting part. We’ve talked about this, not on the podcast, but interesting to see because sometimes you think well, we lost a call. Maybe it’s like a few thousand dollars or even a bit more, but then there’s all your cost, your variable cost. You may not think of it as that value of a loss or on the flip side when we to get in on the marketing side, if you were to get an extra call, what’s the value of that? Yes. I’d love to hear that, Jake.
Jake Johnson:
Well, there’s no doubt that I’ve seen it and it can happen. The family, the communication broke down. We had a failure. We didn’t… Let’s just assume we’re surveying, so we even find out that there was a failure. Because I hate to admit it, I hate to tell anybody who might be in denial, which is not a river in Egypt, but the fact is we know that we don’t sit in the office with our arrangers. We don’t know what they’re saying.
Failures happen. At some point in the process, either in that arrangement office, probably not there. It was a communication between the arrangement office and that customer journey all the way to the end. Hopefully, we’re serving and you can find out about it so we can try to save it by heading over to the house and delivering flowers or talking on the phone, whatever we need to do to make sure that family knows how important customer service is to us and that we’ve failed and we want to make it right.
Whatever that means to each of you in your markets. But if we’re not surveying, we don’t know and they’re not coming back. Or even if we did survey and we tried to fix it and they’re not coming back, that’s an impact on our business. Like I say, our customers are dying every day, but magically, it just seems to be roughly the same number although lately it’s been more.
But when businesses gain or lose calls and it absolutely is an impact on the trend of that business where we can say well, we could… Always, we used to say it was a 400 call firm, but now let’s say it was 10 calls or whatever. Either, we have to err on the side that it might be less than 400 calls or it in fact is 380 calls now. 390 calls. If the average sale at that funeral home is let’s say $4,500, let’s say it was 10 calls and the average sale is $4,500. That’s $45,000.
The good news about losing calls is that your cost to produce those calls is just in your merchandise, because everything else is you’re just stuck with you not. You weren’t going to be able to reduce any other expenses. So your variable cost is the merchandise you would’ve been associated with it. While it might have been 45,000 revenue, let’s say your gross profit, I’m saying it right would be let’s say 78% of that.
Let’s say of that, 35,000 would have fallen to the bottom line. While multiples are more today for premium firms, if we were to use just a six times on that, it’s over $200,000 impact and value on 10 calls. So, if it’s one call let’s call it 21,000.
The next thing I always like to tell people is if you came in and an arranger… Depending on the size of your firm, somebody was responsible for this. Let’s say it was the arranger or it was the funeral director. But you come in, you can point it into the direction of one person that failed in communication or was having a bad day, didn’t show well, whatever. If that person came in and said, “I have to apologize but you gave me 20,000 to take to the bank and I lost it.”
My guess is that would not be the end of that conversation. Either there would be a police report or somebody would be in jail because… But the fact the matter is we have employees at our companies where if we’ve not developed this culture or we’ve not done this training, or we’ve not reinforced how important customer service is and this is occurring and certainly, if you can point it to a particularly individual, that’s as much stealing $20,000 of your own money at a minimum.
And people don’t look at it that way, but it’s a fact. And they don’t look at it that way because it’s not any one moment that somebody considers the succession to another family member or to figure out what all their hard work is translated to in a value. It’s done in trend. If this is occurring and it’s impacting your average, which I’ll get into or calls, it’s real and it ends up just being what it is by the time it gets to me or somebody at Johnson Consulting to tell you what the value is. The question is just which side do you want to be on.
Because the fact is, if you were to gain 10 more calls, you’ve added 200,000 in value. If you lose 20 calls, it’s 420. 30 calls, 630. I’m doing easy math because I’ve got numbers on the screen for myself. But you decide which way you want to go. But we see firms that have lost 10 calls or they’re growing or they have a trend upward and the value of these firms are different.
Not every 500 call firm is the same value or 400 call firm, whichever you want to use. They all have trends that you have to look at beyond the most recent year. Customer service is a big part of that. It’s the part of it, really. Like my dad again, would say, if you’re taking care of the customers, they’re going to take care of you.
I don’t know your experience in seeing… Well, Rob and just the cremation arrangement website have increasing calls and what that does to the value of a firm. I always like to be the devious one and say you don’t have a cremation arrangement website and what calls aren’t you getting? So you can look at it that you’ve either depending on the average sale, let’s call it 10,000, 15,000 in cash. If you found it on the ground, I’m sure we’d all be happy about it.
But if we’re not doing it, we’re just losing it as well. It just goes back to really creating what I always like to say in life and that’s a story about what your vision is and man, if I could turn back the clock at all on myself, it’s just knowing that until you get the right coaching or that aha moment or you talk to somebody who pushes you, I can guarantee there’re definitely going to be people listening to this podcast and maybe many that have not set a far enough vision statement for themself because they feel like it’s not possible.
Maybe it’s not possible to increase customer service or it’s not possible to get 10 more calls. One thing is for sure, if you say that something like that can’t happen, then it’s probably never going to happen.
You have to believe, you have to dream and you have to dream big and customer service is a big part of it. But the other part is average sale, which you see more than the call volumes sometimes because of rise in information rate.
This goes along, I think there’s a big part to be played here as far as again, going back to people’s value expectations from their own life experiences within the funeral organization, as well as the customers that come in and how do we make sure that they’re seeing all the options available and that the arranger feels comfortable about what they’re presenting so that it’s just not a quick discussion about a simple cremation, which means so many things to so many different people. And now you’ve got this low average sale impact and let tell you what that means.
If you see a funeral business, again, that’s all trend-driven and you’ve got a $100 more, let’s say you’re a 500 call firm for a moment. You’ve got these customer sit-downs and you’re round tabling with the staff, the staffs round tabling on the different things they see and how they to present things. They’re taking the perspective of knowing that the customers that come in, that we don’t know what their value is that they’ve received in life and what they would see out of others and we’re not going to make any assumptions.
My point is that we’ve done this training, we’ve created this culture and we’ve impacted of the average sale, $100 higher than what it was. What’s nice about average sale is you’re not expending any more resources or even additional cost unless you’re selling higher merchandise or what have you.
It’s very possible that average sale can fall right to the bottom line. And so for the purpose of impact, that’s exactly what I’ll use. If you had a $100 more average sale on 500 calls, you got 50,000 of revenue. If it all fell to the bottom line, you’ve got 300,000 more in value at a minimum. Using it six times and again, multiples are higher than that today. It’s a huge difference. The thing is and it’s the more of what happens when that customer service fails and people don’t see the value or your staff doesn’t see the value or there’s just this customer service disconnect, I’ll call it. We know if a $100 more creates 300,000 value, a $100 less is going to do the same thing. 300,000 or if it’s $150 average sale drop, 450,000 or $200,000 average sale drop, 600,000.
It’s never too late and can always be corrected. But the problem that you have as an owner is you stare at this and see you about your own success plan of value is it’s trend-driven. If it’s occurring now and you’re going to start fixing it and you need some time or you need somebody to tell a good story as to what you’ve done in the last few months, so that you get that impact on the value of your business, because it’s real either way.
Anyway, the bigger thing when I talk about this is just the variations that occur from this is one of my finer examples. You take a funeral arranger A that had great life experiences and value and really appreciates the finer things in life and sees great value in it.
And they’ve got a great presentation to it. And let’s say funeral arranger B has not had those life experiences and has never really gone through or exists within a culture that supports it or explains how to make the options available and to put aside your differences and let the family decide. This happens at every funeral home, if you’ve got more than one arranger, they have different average sales.
If you’ve got two arrangers, let’s say they’re both… For the purposes of identifying how they’re bringing value to a firm, if they both were doing 150 arrangements a year is what I’ll use and let’s say one has a average sale of 4,800 versus 4,200 or their average sales are different. But using this example, one’s bringing in or attributing revenue to the business that’s 720,000 versus one that would be 630,000.
If all expenses are the same or you’re calculating off the same type of bottom-line number, what we like to call EBITDA at our consulting firm, when you take that number and then multiply it times the enterprise value, you’re talking about a difference in what one arranger is adding to another of 160,000 and can be more.
The thing that’s really sobering is that there’s also… It would be easy to find a funeral home where arranger two in this case, which is the one with the lesser average has probably been around longer, more tenured and for that, just way inflationary increases, maybe even making more than arranger A.
All these thing is a reality. Somebody on this call is going to say, “That’s happening in my firm,” and never really think about it from how it’s impacting enterprise value.
Needless to say and as part of just this to wrap things up in my own reflection in customer service, it’s certainly important and nothing’s more compelling than understanding how it’s impacting your pocketbook. That’s what a lot of this story and background and cases that I’ve looked at is showing. It’s really important thing. It’s something we do, something every funeral business does and has at their culture within their culture but I would be curious if they go out, read this book by John de Julius, Customer Service Revolution and consider what parts or how you’re doing it within your own organization and how you can make it part of your culture as job number one. Everything else will fall in line in my opinion.
Rob Heppell:
Well, Jake, it’s been great, just especially how you tie these two things that you don’t always think of that they’re related. But how related they are. It just takes a little bit of time. If one of the folks listening said, “You know what? We need to get on this.” They got into it, like how long until they actually start seeing A… They’re obviously not going to see the impact on the valuation of the funeral home right away. But for just even little, like those little bumps, how long do you think it would take for them to see the metrics on the improvements that they’re doing?
Jake Johnson:
Right. If most business owners are like me, like they want everything to be done yesterday and so I’d like to think that you start today, it’s the impact. But I think it takes a couple months and there I say probably three to six months to really see it. But it’s never too early to start and the best way to do it, of course, so that you can see just how it’s impacting the organization is to be sure that you’re surveying at the business before you start and then watch what happens.
I dare say, is it like you go from a score of 910 to 980? Maybe, but it could be… But depending on how you do scoring, we have a lot of science to what we do.
But if a scoring is like at 890, to have a difference between 890 and 920 is a huge impact. That’s a big difference believe it or not. Depending on the number of cases that we’re surveying. We see it.
I hate to say it, sometimes we just get those that come back to us and say, “Wow! We knew we had an issue over here and this person, and we had the wrong person in the wrong seat on the bus. We removed them and put this person in. In that case, the results were the following month. The customer service just immediately increased.”
There’s the training. And then when you build that culture, I guess it’s the point I’m making here is that when that culture is built, the people don’t… You don’t last long in a culture if you’re not buying into the excitement that exists within how we do what we do at, in my case, Menke Funeral Home or name your funeral home. It’s like what you see when you see the emphatic, those that work… Cast members at Disney. You either got to be in that culture or it’s not for you. It should feel like that.
Rob Heppell:
Cool. How would someone get started? You said to read John R. DiJulius’ Customer Service Revolution.
Jake Johnson:
That book is great, but-
Rob Heppell:
But if they wanted more help, what do they-
Jake Johnson:
If they want more help, then they reach out to Johnson Consulting. Really, we’ve got people that are certified in that training of what’s actually dictated in that book along our own spin on how it applies to funeral service and do that training within a funeral home. It’s great stuff.
Rob Heppell:
Cool. Well, hey Jake, this has been great, eye-opening for me and I hope for a lot of others listening. Thanks for that.
Jake Johnson:
You got it.
Rob Heppell:
I’d like to thank you for spending your time with us today. Our goal is to share our experiences and insights in hope that we can help other funeral professionals like you serve more families. Make sure you check back soon for another episode of the Funeral X Podcast. Until the next one, this has been Jake Johnson and Rob Heppell.
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