Hello everybody, this is Albert with Parting Pro. In today’s video I’m going to cover a framework to use when considering the question “Should you create a new cremation brand or use your existing funeral home brand when expanding your cremation business?”
I get this question all the time. And the answer is almost always the same, which is… “it really does depend”
We’ve partner with funeral homes doing it both ways that have been wildly successful. One way is not necessarily better than the other. It really depends on your personal situation. If you want to check out my other videos, I go into a lot of detail on specific customers.
Today, I’ll go over some things for you to consider when trying to figure out what is best for you.
First of all, the only assumption I’m going to make here is because you are considering on launching a new cremation brand or keeping it at all the same, your goal is to make more money, not make less money, right?
The two things to consider:
1. How will this affect my existing business?
2.. How will this affect my marketing spend?
These two questions make up the framework you should ask yourself when considering the different aspects of your business.
I also laid out a few scenarios here that are pretty common, and we will do a few exercises together to go through the framework. Obviously, you could and probably should go in more detail that I’m going to go over today, and you can also try to put in actual numbers or weights as well.
Another thing to note here, is I’m not going to include the REVENUE GAIN you’re going to get in this framework because you will get it either way. However, it will come at a different cost, which is what we are evaluating here. Does that make sense?
I have a couple of popular examples of common reasons and goals people have when looking into this.
A lot of people want to start targeting business in adjacent markets to them. One thing they may consider is if their current funeral home already has good brand recognition in that particular area.
Other people might have a goal of being a little more defensive. So, when deciding between whether or not they should launch a new brand, they may want to evaluate if they are getting a significant amount of shoppers calling them already but choosing to use services out of town or just somebody else.
Some people might be considering offering a lower price to win more volume, but may be concerned about cannibalization since their price may be on the higher end.
Some people might not be concerned because they have loyal families and they offer a much different service package than what they will offer with, let’s say for example, an online option. And they are able to effectively communicate this.
So there’s a lot of different aspects of your business to consider. I’ll run through a few examples on how to ask yourself these questions. I’ll do this relatively one-dimensionally, you can do it this way as well, but you are going to want to consider all aspects that you deem important.
Let's say for example, the first one I had was, let's say I'm going to go target an adjacent market or I have good brand recognition. So how would you use this framework? Well first, I would ask myself how will this affect my existing business if I'm going to be targeting an outside area if I were to start a new brand versus keep the same brand? In this scenario it would be pretty neutral for both of them because I'm going outside and targeting different areas, my existing business won't really get affected.
Now I go over to how this will affect my marketing spend? You can see if I'm starting a new brand it's gonna be negatively affected because I'm gonna have to market all over again, start all over whereas, if I kept the same brand this would actually positively affect it because I already have good brand recognition in this area. And obviously I can get more business if I were to spend the same amount of money versus starting a new brand.
Ok, that makes sense?
All right, let's do another one here. Let's say… the second example I had, I'm more defensive and I have a lot of shoppers that are calling me but for some reason or the other, they're going out of town or going with another competitor. If I were to start a new brand to deal with this, how will this affect my current business? I would say that's relatively neutral right? How about if I were to keep it with the same brand? I would offer all these other options and services and make it a little bit easier for them. This could possibly affect my current business right?
Moving over to the right column, how would this affect my marketing spend? I would say you're starting a new brand, once again because it's a new brand, it's going to be negative because you're going to have to spend money you get people to call you versus if you kept up with the same brand in this particular scenario, you're already getting a lot of shoppers, you don't actually need to spend anything because it's already coming to you right? So that would positively affect it if you kept the same brand.
Okay that makes sense?
So, you can kind of go down the line and just ask yourself more questions, like, what if I’m going to be lowering my price point and I'm trying to capture more business but cannibalization of my own market is actually very possible?
Well if you're gonna be advertising this new business, it would be relatively neutral in terms of what you're spending. I would say maybe more positive for keeping the same brand, because they already know you, but they will definitely negatively affect you if you're worried about cannibalization right? If your customers are fickle, they're gonna go pay you the lower amount then if they were… if you were not offered a lower price. So, this would negatively affect you in the scenario.
But what if you're able to effectively communicate the difference and it's a different market that you're selling to right? Then it would be pretty neutral on how it affects your current brand. When it goes over to marketing, it would positively affect you if you kept the same brand because, once again, you don't start all over on the marketing. And we can keep going here.
What if, for example, a lot of people tell me they have some sort of plan for organic referrals? This could be, you got an in with hospice somehow or you're able to communicate effectively with hospice. And in this scenario, it wouldn't really affect your marketing spend because, either or, you could get that quote-unquote referral from hospice, but then if you go into how it affects your current business or existing business, it may negatively affect you if you keep the same brand.
And once again this depends on other things like whether or not you're offering a lower price point and this and that. So, these all intertwine with each other a little bit. So, you're going to want to put some weights to the importance of these things to your business. But once again, you are going to want to use this framework because the revenue is going to be there, but at what cost? So that's a question you want to ask yourself
So, hope this helps if you guys are trying to figure something out, please use this framework and you can add to this as well with a couple other aspects that I didn't mention earlier. But yea, really think deeply about our business you know obviously I can't cover every single thing. If you would like to talk more about this when making your decision, you can always reach out. This is Albert with Parting Pro. Otherwise we'll see you guys in the next video. Thank you.