Service Corporation International Chairman and CEO Thomas Ryan made some interesting comments in his opening statements in last week’s SCI Earnings Call.  And, I wonder when looking at the long-range perspective if these comments portend an increasingly successful future for cemeteries and less of that future for traditional funeral homes.

Here’s some of Ryan’s comments based on the 3rd Quarter 2025 results of SCI:

• “Funeral gross profit decreased by $9.5 million, while the gross profit percentage declined by 170 basis points to about 18%.”

• “This (Funeral) gross profit decrease was attributable to the slight decline in revenues for the quarter, coupled with higher selling costs and a moderate fixed cost increase.”

• “Comparable cemetery revenue increased by $31 million or almost 7%”

• “Large (Cemetery) sales grew by an impressive $8 million or 19% over the prior year quarter. Maybe more impressively, core sales accounted for $22 million of the sales production increase as solid velocity growth was complemented by higher sales averages.”

The emphasis on those quotes came from Funeral Director Daily simply to point out the somewhat negative aspects of SCI’s funeral financials and the positive aspects of SCI’s cemetery financials.

Here’s a couple of more quotes from SCI CEO Ryan that indicate how they see the value of their cemeteries going forward:

” . . .the cremation consumer continues to be a high-growth opportunity in our cemeteries. We’re seeing more cremation consumers pick either cremation gardens, cremation niches.

We have a lot of products that I’d tell you, consumers really don’t have familiarity with. I think a lot of cremation consumers come in and don’t really understand what we have available. So we’re really focused this year with some consumer research that we’ve done about trying to tie that consumer in a better way to educate them about what we have because we found in the focus groups that almost 0 out of 10 knew what we had and about 8 out of 10 once they saw it said, I’m interested in looking.” . . . . . . 

 

“Our revenue team has helped construct some really nice inventory across our cemeteries. We spend about $160 million a year injecting new inventory into the system, and we do a real good job of converting that pretty quickly into sales. So we feel very good about next year right now based on everything we know at the high end, at the core level, and like I said, I just want to identify some of these productivity gains or velocity gains. If we can get more cremation consumers in there, it’s going to drive more sales, not as high an average, obviously, but drive more velocity, more familiarity. And the nice thing about cemeteries is it’s really a family tree component to this, right?

Because people are going to visit the cemeteries, people are going to want to buy adjacent properties for the family. So this is really good in educating and providing future leads and opportunities to our sales force.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  People visit cemeteries and cemeteries are ever-evolving into places that do more than house the dead.  My deceased mother would have celebrated her 99th birthday last week so I took some time on her birthday and visited the cemetery.  Even on a cool Minnesota autumn morning the cemetery proved a good place of solemn reflection “on life” for me. . . . . and I think that is becoming a more common occurence among many of my friends.

During my time as a funeral director so many families struggled with the choice between traditional burial and cremation with memorial services.  In my opinion, that was the decision that spurred the Death Care choices for these families.  That decision, on shifting from generational burial families to first-time cremation consumers, was so “heavy” on people that not much was thought about eventual “Memorialization”.

Today, cremation is on its way to an 85% useage rate in the next two decades according to research by the National Funeral Directors Association (NFDA).  Instead of that difficult decision between burial and cremation, I think cremation is a foregone conclusion for most of these people at this time.  At the same time I think these consumers have lived through the world of bringing the cremated remains of their parents home and wondering what to do with them. . . .and, they don’t want that situation to happen to their children.

In an anecdotal setting of Baby Boomers like me, most of my friends today no longer ask me about the pros and cons of burial vs. cremation, the questions come about concerning “What to do with my ashes?”

Quite frankly, just yesterday morning I was listening to a national syndicated sports radio show on the radio while driving.  I don’t know how the discussion turned this way but I heard one of the commentators say, “I’m fine with cremation, but I’m really concerned with what my family might do with my ashes.”  I believe that thought is more common today than most of us believe it to be.

Partly because of that, “Memorialization” is at the top of mind for Death Care consumers today.  SCI understands that and has all kinds of options available for those consumers at their cemeteries.  Funeral Director Daily recently published an article, that you can access here, that shows that Los Angeles’ Hollywood Forever Cemetery is creating inventory on that premise also.

What I believe that this consumer change leads to is an opening for cemeteries, especially those that are combination cemetery/funeral home/crematories to increase their market share by introducing the options for memorialization to consumers.  If you read the linked Hollywood Forever Cemetery article they actually offer “Free cremations” to consumers who purchase a certain level of cemetery memorialization.

From reading SCI CEO Ryan’s comments it appears that SCI sees this shift as well as they are investing $160 million per year in cemetery inventory that he says is “convert(ed) pretty quickly into sales”.

It’s my opinion that cemeteries that don’t have these premium cremation memorialization opportunities for today’s (and tomorrow’s) Death Care consumers should look into the idea of creating some.

Related — You can access the full transcript of the Service Corporation International’s 3rd Quarter 2025 Earnings Call here.

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Johnson Consulting Group Marks 25 Years of Guiding Funeral and Cemetery Businesses Through Change 

Scottsdale, Arizona — October 28, 2025 —Johnson Consulting Group (JCG), a premier consulting firm serving funeral and cemetery professionals nationwide, is celebrating 25 years of helping businesses navigate profession change, growth, and generational transition. This longevity provides great evidence in the satisfaction of JCG customers over the year.

Over the past quarter-century, JCG has grown from a firm focused primarily on succession planning to a full-spectrum consulting partner supporting all stages of the funeral home and cemetery life cycle. Its services now include mergers and acquisitions, operational consulting, accounting and financial management, coaching, leadership development, performance tracking through customer surveying and sales analysis, and technology solutions. 

A Legacy Rooted in Relationships

Founded in 2000 by Tom Johnson, and now led by his son, Jake Johnson, the company marks this milestone with gratitude for its clients, partners, and team members who have supported its growth and evolution. 

“My father loved this profession and his friends,” said Jake Johnson, President and CEO of JCG. “I think it was exciting for him to see that those relationships continue with what he built and to what we have today.” 

From its earliest days, Johnson Consulting built its reputation on deep, trust-based relationships within the funeral profession. Jake recalls growing up meeting funeral home owners through his father’s work and being struck not by the business side, but by the warmth and community of funeral service professionals. 

That relational foundation remains central to JCG’s approach today: Each client engagement is treated as a partnership, with JCG working “hand in glove” with operator teams to tailor strategies that fit their goals and values. 

Key Milestones & Contributions

• Broad national footprint: JCG has provided merger and acquisition advisory and consulting services to funeral and cemetery businesses in every U.S. state and Canada. 
• Billions in transactions: Over its history, the firm has supported well over $3 billion in funeral profession transactions. 
• Service diversification: From its beginnings in valuations and business exit planning, JCG responded to client demand over time by expanding into accounting, consulting, coaching, operational systems, and technology. 
• Profession insight and thought leadership: JCG has adapted alongside major trends — including rising cremation rates, shifting consumer expectations, digitization of operations, and evolving workforce dynamics. 

Jake Johnson points to technology, rising labor costs, and cremation rates as the most transformative forces for funeral businesses in recent years. He notes that funeral homes must balance deeply personal relationship-driven service with modern data-driven systems and efficient operations. 

Looking Ahead: The Next 25 Years

As JCG reflects on its first quarter-century, its leadership is already turning toward the future. The firm pledges to continue evolving in service of its clients:

• Innovate with purpose: JCG will continue developing and improving performance tools that help its clients operate more smoothly while preserving personal service. 
• Deepen coaching and leadership development: Recognizing that people drive long-term success, JCG aims to expand its executive coaching, team training, and leadership development offerings.
• Strategic growth and partnerships: The company continues to explore curated alliances, thought leadership content, and new service models to meet emerging challenges in the funeral and cemetery space.
• Commitment to clients’ futures: Above all, JCG intends to remain a trusted partner to funeral home and cemetery owners as they plan for succession, growth, operations, and market change.

“We’re in this for the long run,” says Johnson. “We honor my father’s founding vision while adapting continuously to serve an industry that never stops changing.” 

About Johnson Consulting Group

A leading funeral profession consulting firm focused on increasing performance, profitability, and success as owners navigate succession planning. Our expert services include succession planning, selling funeral homes and cemeteries, financing solutions, business coaching, accounting services, business performance analysis, customer survey program, customer experience workshops, incentive compensation plans, and Leadership and Management training.

For more information about JCG’s services, thought leadership, or JCG events, visit www.johnsonconsulting.com.

Businesses commission research studies when there are unexplained difficulties with the business; primarily “business is down and we don’t know why”.  Over four decades funeral businesses commissioned hundreds of studies to explain the causes of declining business.  During the 1980’s and 90’s many funeral businesses in New York city metro area experienced declining volume as retirees began leaving the city following retirement. The migration wasn’t immediately obvious, which caused operators to begin questioning their business. Over time, many funeral businesses closed or sold for property value; they transferred pre-needs, family files, phone numbers and business names to larger, remaining firms.

Facilities, pricing and staff members also caused declining at-need volume. However, the most common cause of decline was insufficient advertising. Research respondents indicated “reputation”, “not familiar with the firm”, or “know nothing about this business” as reasons not to select a funeral home.  In other words, insufficient communication with the public.

Today’s article for Funeral Director Daily is authored by Glenn Gould.  For 35 years, Glenn Gould was CEO of MKJ Marketing, a death care industry marketing firm serving funeral homes, cemeteries and death care industry vendors in areas of Digital Marketing, Market Research, Advertising and Training Programs.  MKJ was founded in 1982 and had over 3000 funeral home clients throughout the US and Canada. In 2021 MKJ was acquired by Tribute Technology, a Carlyle technology roll-up; Glenn has continued with TT as a marketing consultant.

There were reported 22,000 funeral homes in the 1960’s and 70’s: most conducting fewer than 150 cases annually. Most firms served a specific neighborhood, church, religious or ethnic group. As such advertising other than sponsorships, church bulletin and public relations all that was necessary to maintain an on-going business.

Glenn Gould

As cremation became more popular through the 1980’s and 90’s, funeral businesses needed to serve larger geographic and demographic areas which was accomplished with elevated advertising and marketing. Those that refused to accept the new reality experienced declining business.

Advertising during that period was primarily in print, IE: newspaper, yellow pages, direct mail. Radio advertising never had much impact save “obituaries on the air” advertising in rural areas. Firms first to adapt to television advertising experienced accelerated growth, taking business from firms that failed to communicate. The cost of cable and broadcast advertising grew advertising budgets, but the results were impossible to measure, which made advertising a “leap of faith”.

The greatest competitive advantage of digital advertising is the ability to measure results. Results from pay-per clip (PPC), social media advertising, over-the-top television and geo-fencing enable the client to identify productive advertising. This has caused advertising budgets to grow even while marketing costs have declined as unproductive advertising is discontinued.

Digital advertising has eliminated the need for market research as consumers effectively communicate what they like and dislike about various competitive firms by the selections they make. Competitors can view each-others’ ads to identify more successful messages.  So why do so few funeral homes effectively use digital marketing? Even more to the point, why do they continue investing in print advertising? After all, the fact that the daily newspaper is down to once or twice weekly indicates declining readership.

The combination of cremation and digital marketing also challenge the logic of branch facilities in the same market. The threat of being a primarily cremation business with too much overhead should cause owners to question the logic of acquisitions that add addresses but fail to create sufficient profits. Just as in the 1980’s through 2000’s, cremation is causing funeral facilities to sell for property values while selling pre-needs and family files to larger firms.

Many of the expenses borne by funeral businesses in the past are now superfluous which has created opportunities for investors to open mortuary service businesses.  Providing first call, embalming, cremation, drivers and vehicles on an as needed basis reduces over-head costs while making more productive use of the declining number of licensed directors and embalmers.

Again, just as in the past, firms that fail to adapt to the changing environment will suffer losses, causing more firms to sell for property value and the continued growth of larger firms.

More about Glenn Gould:

As CEO of MKJ Marketing, Glenn assisted funeral homes and death care industry vendors in establishing marketing and advertising plans.  He is recognized for his market research services having conducted over 800 positioning and prospective trade area studies throughout the US and Canada.  In addition to quantitative research studies for funeral homes and cemeteries, Glenn moderated one-on-one interviews, focus groups and test panels.

In addition to MKJ Marketing, Glenn held executive positions with Bausch & Lomb, General Mills and the Batesville Casket Division of Hillenbrand Industries.  He is a recognized speaker at industry conferences, seminars and conventions.  His articles appear regularly in funeral service publications. His two books  “Deathcare Marketing, 25 FAQ’s” and “Funeral Home Marketing-Moving The Bottom Line” have sold thousands of copies and are in use at mortuary colleges nationally.

Glenn has testified as an expert witness in multiple civil suits between funeral homes, served on the Board of Directors of the Pittsburgh Institute of Mortuary Science and instructed the Small Business Class for the St. Petersburg College, School of Mortuary Sciences.  Glenn holds B.A. and M.S. degrees.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  On Monday Funeral Director Daily published an article that had to do with the number of funeral homes in the United States and the “Average Revenue per Firm”.  That data confirmed that there were 15,703 funeral homes in the United States in 2022 — down from author Gould’s estimate of 22,000 back in the 1960’s.

That’s a 30% decrease over those years and some of the decrease would have to be associated with the lack of evolving into a funeral facility that profitably handled the increase in cremation disposition cases over the years.

It’s easy to see that funeral service is continuing to evolve and I believe that we will see another 30% reduction in the number of traditional facilities that operate Death Care services over the next 20-30 years.  As Glenn Gould makes the point, make sure your funeral home evolves with the changing consumer habits so that you’re not one of those reductions.

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“A servant’s attitude guided by Christ leads to a significant life”

Funny how 28 hours alone in a car gives you plenty of time to think about things you probably would not think about otherwise. . . . I arrived home in Minnesota on Monday after spending Saturday, Sunday, and part of Monday returning from our winter rental home in Southwest Florida.

You might find this odd, but I actually enjoy the three days — I drop Angie off at the Fort Myers airport on Friday and she flies home. . . I then leave our rental unit bright and early on Saturday morning to drive our car back to Minnesota.  We’ve done this for five years now. . . and it works for us.

Luckily my car, actually an SUV has Sirius XM radio and I have the opportunity to listen to about 150 different stations over the 28-hour drive period.  This year I got tons of information on the NCAA basketball tournament, learned alot about NFL free agency and the upcoming draft, and enjoyed listening to experts on business and government/political related stations as well.

That leads me into a discussion of the title of today’s column.  The government/political stations talked a lot about potential tariffs.  It was interesting to hear some philosophical arguments about what happens to business if/when tariffs are implemented.  I would argue that the consensus of “experts” proclaimed that tariffs would hurt large companies that trade internationally and also small companies because increasing inflation may be a collateral side effect of tariffs and small companies are, according to the experts, hurt more by inflation.

What I came to understand is that the companies in the United States termed “Mid-Cap” companies would probably benefit the most or be hurt the least.  Reasoning being is that while large companies have an international headwind and small companies battle inflation, many investors will turn their attention to inside the United States and support these companies. . . . . Much of that support, it was purported, would come from Private Equity that would look to invest inside the United States rather than look internationally.

Here’s a couple of recent articles that I found about that theoretical situation:

What might this mean for Death Care? —  When I heard this concept, as I usually do I tried to understand how it will affect us in Death Care.  One thought that I have is that I know many “acquisition companies” use private equity to help them in the financial aspects of their acquisitions.

If private equity turns “inward” it may mean that there will be more resources available for the acquisition of funeral homes and/or cemeteries.  And, if there is more cash available, that may mean that for “desireable” funeral homes and cemeteries there could be a competition to purchase them which might, theoreticaly, raise the sale price.

I don’t know. . . just one thought.

Do funeral homes still have a “Wide Moat”?  —  Kind of going hand-in-hand with the thought of paying a high price to acquire a funeral home acquisition companies need to be sure that the acquired funeral home has a “Wide-Moat”.  In a business context here is how that term is defined:

“. . . . a “moat” refers to a sustainable competitive advantage that protects a company’s profits and market share from competitors and external threats.” 

Tom Anderson
Funeral Director Daily

Traditional funeral homes have historically had this “wide-moat” in their communities.  What widens that moat is that the existing business usually has a strong history, a building that would be expensive to duplicate, professional staff known in the community, and a book of pre-arrangments in its file for future business.

In addition, ownership and staffing professionals, in most states, need a license to be able to conduct much of the work that funeral homes take part in.  The time and expenses to obtain that license turns out to be a moat for others wanting to come into the business as well.

A new business to compete with that business would have to make an investment in a facility, find “licensed” staff more than likely who will not be well known in the community, and have no existing pre-arrangements to build off.   As you can probably understand, penetrating the “moat” of the established business may take years and result in financial losses before any gains.

My question here, is “With the changing face of funeral service, is the moat getting narrower“?  For instance, can cremation providers operate out of a leased strip-mall?  Can social media and online arrangements take the place of well-known staff?  Can renting event centers for celebrations or services compete with a well-appointed traditional funeral home? Is licensed staff necessary for all aspects of Death Care anymore?

I don’t have the answers to those questions, but I believe they are being asked by many in today’s Death Care world.  I would guess that there is no doubt that the “wider moat” that you have, the more your funeral home will be worth.

It is interesting to note that the S&P 500 has had an incredible run over the past 10 years gaining 235% in that time — an average of 23.5% increase per year.  However, an Exchange Traded Fund (ETF) that invests only in what it considers “Wide-Moat” companies has done even better in that time period gaining 240%.  That wide-moat fund trades under the stock symbol “MOAT”.

Successful funeral home/cemetery acquisition companies have known about the “Wide-moat” theory for a long time.  However, I’m wondering if those companies still see the local family funeral home as being “Wide-moat”. . . . . .

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“A servant’s attitude guided by Christ leads to a significant life”