The business case for a hospice funeral service

To: The CEO of the North Devon Hospice

Dear Stephen Roberts

It is with sadness and grave misgivings that I have learned of your decision to throw in your lot with Hospice Funerals. Any new business is a gamble, but I think you’re risking more than money in this new venture. Let me tell you why.

You’ve done your market research and you know that the market you are entering is saturated: we have more funeral directors than we need. I recognise that you’d only be doing this if you had identified a gap — an opportunity to provide a commercial service catering for needs that are not presently being met. And you have. Together with Hospice Funerals you have identified four areas where you reckon you have a competitive advantage. One of these amounts to a USP which no other provider can match.

First, there is ‘transparency’ — price transparency. The Good Funeral Guide has been campaigning for undertakers to post prices online for years so I’m with you there. Failure to publicise prices stops the market from working properly and creates the impression that undertakers generally are overcharging. It is true that some undertakers have indeed been using this as a way of disguising unacceptably high prices, but many have refrained from doing so on the grounds that it was not, they felt, ‘dignified’ to do so. It has taken time to alter this mindset. Online price comparison sites have helped. The best undertakers now post their prices online while the rest are rapidly following suit. My judgement is that transparency, once a major issue for funeral consumers, won’t be for much longer.

Second, you intend your funeral service to be ‘affordable’ — in plain English, cheap. The reasons for funeral price inflation are complex and have much to do with above-inflation third-party price rises (eg, burial and cremation). The funeral directors’ component of the final bill for a funeral has actually been below the rate of inflation for the last two years. Margins generally have been shrinking in response to consumer demand for cheaper, simpler funerals. Furthermore, there has been an appreciable number of altruistic new entrants to the market throughout the UK operating on very low margins indeed in order to be accessible to people on low incomes. If you propose to operate your hospice funeral service at the ‘affordable’ end of the market you are likely to be disappointed by its crowdedness and its poor profitability. Partnering with an organisation — Hospice Funerals — that exists only to make money out of you is only going to diminish your bottom line further.

Third, your funeral business will be operating under the name of your hospice. This is likely to be a potent force in marketing your funerals. But remember, yours is essentially a speculative venture. Being good at looking after the dying, their families and friends, does not automatically translate into being good at looking after the dead and the bereaved. Any falling short in funeral provision is likely to impact grievously on the good name of your hospice and consequently on the high regard of your volunteers, supporters and donors. To lose money on this venture would be reputationally disastrous.

Fourth, your raison d’etre and USP is to bridge what you call the ‘care gap’ by providing a seamless service from terminal illness to grave. This is a marvellous idea. Yes, if you had cared for someone as they lay dying, why wouldn’t you want to go on caring for them in death? Why hand them over to strangers? A hospice is in a unique position to achieve this. It makes very good sense. 

Except that it won’t be hospice staff who care for your dead on hospice premises, will it? It will be a separate team from somewhere else. Strangers, in other words. So not seamless at all. Or different. You’ll be just another undertaker, no different from all the rest, competing in the same overcrowded market. 

You say that “North Devon Hospice’s key focus is income diversification right now”. Perhaps this gives us an insight into where you’ve gone wrong. Your thinking been profit-driven, not values-led. Consequently your business case is a muddle of wrong assumptions and wishful thinking. 

I urge you to reconsider. Please, whatever you do, don’t take risks with your hospice’s good name.

With best wishes

Charles Cowling

Director and founder of the Good Funeral Guide