If you read Funeral Director Daily and listen to me when I have a chance to be a guest on an industry podcast you know that I believe that there is a great, and growing, potential market in what I call the “Cremation Aftermarket”.  My take on the the “Cremation Aftermarket” is that many people who become the guardians of cremated remains don’t know what to do with those remains.

Because of that those remains end up in closets or on shelves in homes and as time passes the guardians of such remains question what they are going to do with them, but never get around to doing anything.

It’s because of that that I think a great opportunity that is available to funeral homes is to let these guardians know — during preneed, at need, and even well into post-need — that there are options to memorialize those remains and take the responsibility of being the guardian off of their shoulders.  It’s especially important when you realize that a funeral home can not only help a guardian make a decision but the funeral home may also profit off the sale of many of these cremation aftermarket products and memorials.

As a matter of fact, on this episode of Podcasket, I bring up the “Cremation Aftermarket” and the host, Tukios CEO Curtis Funk makes the comment about a built-in market for such when he comments, “. . you can market to (these guardians) and they want you to market to them. . . . .Reach-out again. . . (think of it as) Life-cycle marketing”.

Podcasket Episode #6:  Cremation Aftermarket discussion begins at the 39:06 mark and lasts for about six minutes.

With that comment CEO Funk is acknowledging the great amount of people who have cremated remains within their guardianship and probably are wondering how to relieve themselves of that responsibility of guardianship in a tasteful fashion.

Late last week I learned of a great promotion to do just that.  My friend Kelly Roberts, founder of funeral service alternative Sendoff, sent me an email about his upcoming “Ashes among the Oaks” event.

You can learn about the event here, but what it is is an opportunity to learn, in a gentle way, how to “let go” of those remains.  Roberts and the Minneapolis metropolitan-area based Sendoff have teamed with Better Place Forests of the St. Croix Valley for an afternoon in the local Better Place Forest.

My guess is that Roberts, Sendoff, and Better Place Forests hope to make some sales for Better Place Forests with this event, but reaching-out and giving these guardians an opportunity to realize that some type of memorialization can be probably should be done for the cremations remains that they brought home yesterday or decades ago is great public relations on its own.

Sendoff, which sub-titles itself “Funerals Reimagined” is, in my opinion on the right track to capture tomorrow’s Death Care consumer.  In a world where that consumer will make choices about Disposition, Celebration, and Memorialization, a company offering what Sendoff does, especially in the Celebration and Memorialization modes, may capture much of the business from consumers that traditional funeral homes no longer appeal to.

Take a look at this page from the Sendoff employee profiles and read the bios to get an idea of some of the celebrations that many might prefer for themselves.

Here is the website for Sendoff.

Related — “Lost in a sea of ash – When wildfire destroys a home – and a loved one’s urn – the search begins.  Los Angeles Times (CA)

Here is a short video from KARE TV – Channel 11 NBC Minneapolis about “Sendoff – Funerals Reimagined”

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

Wow!!  The middle of the month seems to have got here fast and with it comes our list of “Top Read” Funeral Director Daily articles over the past 30 days.

This month it looks like there is something for everybody’s interest.  Our top-rated articles cover subjects like revenue growth, potential casket tariffs, consumer perceptions on funeral pricing, the acquistion temperature, and even a story of cremated remains being held for ransom. . . .

If you missed these articles during the month, just click on them to catch up with the news. . . .and, thanks for reading Funeral Director Daily.  Thanks to you we continue to grow our readership and continue to offer the most timely business news and ideas in the profession. . . . Thanks again!!!!

BTW —- It will change minute by minute, but as I went to list the Top 5 read articles of the month (Wednesday), the top two were absolutely tied in monthly page views. . . .It is the first time I can remember that happening.  (Editor’s note:  By Thursday morning when I proof read the blogpost, the Trump Tariff article had jumped into the number one position with a 14 point advantage).

1. Trump’s tariffs and caskets.
2. A look at funeral industry revenues — some interesting observations
3. Acquisitions, mergers, and new owners seem to be the norm now in funeral services.
4. A perception that seems to be getting tougher to shake.
5. Cremated remains priceless?  These were ransomed for $2 million.

Funeral Director Daily publishes a minimum of 22 articles per month and receives between 17,000 and 20,000 page views (and growing) each month representing many industry leaders and local decision makers.  Thanks for reading!!!

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

You’re a funeral home or cemetery owner/operator and you are in the final stages of planning that 2025 business budget.  If you have loans for livery vehicles or building improvements that are either adjustable or coming due in 2025 what can you reasonably expect for interest rates on those loans going forward?

As of today when I write this article the Federal Funds Rate, the rate banks borrow money from the federal government at and banks use as a base when working on their interest rate margins, sits at the 4.50-4.75% rate.  That rate is down from a 5.25-5.50% rate earlier in 2024.

Part of the reason that rate is down is that those who fix the Federal Funds Rate have had the mindset that inflation is coming under control.  However, just last week one of those policy makers who help set the Federal Funds Rate, Michelle Bowman, questioned if inflation is under control and made the point in this article from Reuters that interest rates may be higher for longer.

To that end, Bowman made this statement in that article, “I would prefer to proceed cautiously in bringing the policy rate down to better assess how far we are from the end point, while recognizing that we have not yet achieved our inflation goal and closely watching the evolution of the labor market.”

Tom Anderson
Funeral Director Daily

Bowman also made this point which infers that, all things being equal, interest rates may continue to be higher.  Here’s what the article said about that inference, “. . .she believes the neutral policy rate – the level of borrowing costs that neither bolsters nor brakes economic growth – is much higher that it was before the COVID pandemic, “and therefore we may be closer to a neutral policy stance than we currently think.”

So, at least from this article I think that it would be wise to budget for levels of our current rates for 2025.  If one budgets for that amount they will probably be safe on the high side for 2025.  And, if the rates do tick down, you then have some extra money in the bank.

When I did my budgeting on interest, and other items, I always preferred to over-budget rather than under-budget.  That way, if I was wrong, it was to my favor and I saved some from my budget numbers rather than being wrong on the other side and having to figure out how to plug the budget hole.

Prime Rate — The Prime Rate as published by the Wall Street Journal sits at 7.75% today.  By definition the Prime Rate is the rate that financial institutions will give their most creditworthy customers at any given time.  Prime Rate is not a national rate and will vary from bank to bank.

Here’s a historical chart of the JP Morgan Prime Rate from 1983 until today.  Their Prime Rate sits at 7.75% today but was as low as 3.25% in March 2020 before the Federal Funds Rates were raised to try to put a stop to inflationary costs.

Related Information —  Sometimes it is interesting to look at what public companies are paying for credit and at least use that as a relative data point when searching out your own credit terms.  While there are no two borrowing situations exactly alike, such as some with physical collateral and some offering no collateral and differing maturity lengths of the debt, the rates and terms given are great points to know when talking with your local banker.  In September both Service Corporation International and Matthews International closed new debt offerings.  You can read about those from company press releases here:

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

If you ask my opinion, American borrowers have been somewhat spoiled by the low interest rates that we had had for almost the last ten years.  This article will tell you that from 2015 until into 2022 we never had Prime lending rates higher than 5.5% — and most of the that time period they were lower than 5%.  That contrasts with the incremental rate increases put in place until last month all the way up to an 8.5% Prime borrowing rate from 2022 into 2024.

The past two years interest rates have been rising causing your payments for everything from automobiles to credit card balances to be higher. . . simply because of that rate.  If you had a loan for your home or on your business that was an “adjustable rate” loan then you have seen your payments rise as that interest rate has risen.  For some people that has caused immeasurable problems with cash-flow — be it a business’ cash-flow or their personal expense cash-flow.

We’ve reached a point where the Federal Reserve Board now believes it is in the country’s best interests to begin lowering the rate (called the Federal Funds Rate) that they borrow money to banks at.  Lowering that rate in turn results in commercial banks being able to lower their rates to consumers and businesses and yet keep the “spread” that they need between the rates they pay to savers and the rates they collect from borrowers.

That “spread” is essential to banks because they have to be in a position that what they collect from borrowers is more than they pay to savers.  And, that “spread”, as well as some other fee income banks collect, is how banks pay their own business expenses and, hopefully, generate profits.

Tom Anderson
Funeral Director Daily

If you are in business, rates coming down may give you some opportunity.  Let’s just say you have a $500,000 interest only monthly payment set up for your funeral home business operations.  At 8.5%, the latest Prime rate before the recent rate cut, you would pay interest totalling $42,500 per year for that financing help.  The Prime rate is at 8.0% now, but within the next 6 months there are those who think it will come down to about 7% or less. . . At 7% that adjustable rate interest only payment would be only $35,000 annually.  . so you are saving $7,500 annually by the rates moving down.. . .That’s good for your business!!

It appears that we are in a rate-cutting environment now, and could be for some time.  My suggestion would be to watch as those rates come down and if you find a rate that you are comfortable with, then lock in with a “fixed-rate” loan.  Doing so takes some of the risk out of your operations.

Quite frankly, it’s what some of the big companies do.  We reported on Service Corporation International (SCI) selling 8-year bonds at 5.75% bonds earlier this month.  In essence that gives SCI capital at a fixed cost of 5.75% paid off over the next 8 years.  Here’s the article on that decision.

The “Flip Side” of paying interest —  For banks to have money to lend, they have to have money in the first place.  And, they do that by offering savings rates to those that want to deposit money in the bank to save, or deposit for other purposes like checking accounts.  The “flip side” of interest rates coming down is that those savers, many times retired people, will see less income because of the rate drops.

I had a discussion with the pastor of my church this Spring about an upcoming fund drive appeal that the church was embarking on.  My point was, as it looked like the Federal Reserve Board would eventually lower rates, to see the retired people in our church first. . . . while their saving rates were still historically high. . . .

For instance, our last fund appeal was in 2018 and a one-year certificate of deposit was at 0.6% at our local bank.  That meant that if a retired couple had $100,000 invested in that Certificate of Deposit they would receive $600 annually in interest from the bank.  This past Spring (2024) I was able to take out Certificates of Deposit at a 5.3% rate. . . which would mean someone with that same $100,000 invested would receive $5,300 in interest instead of that $600  —  $4,700 more annually than in 2018.

The thought process that I had was that “momentum” is a big thing.  Now that we are in a Federal Reserve rate cutting environment, retirees will see their next Certificate of Deposit potentially paying less interest and may feel the need to “tighten up” their expenses and make less of a commitment to the church project.

On the other hand, I felt it was probably best to wait, on the church appeal, to see young families and those with credit financing needs — homes, cars, education — when rates started going down they might see momentum with lower payents and they may see room to breath again from the high cost of credit.  If they caught that “momentum” then maybe their gifts would be larger.

What does this mean for your funeral home?  Let’s look at Preneed. —   If I was operating a funeral home in this coming rate-cutting environment, I would probably put more of my resources than normal into Preneed development and sales.  As interest rates come down, it might be a little easier to convince older adults that preneed would be a good investment. . . especially considering that they may not be able to get the same “relative high” rate of interest from their bank when renewing a Certificate of Deposit. . . It’s just a thought I have.

One final thought, and selling point, about preneed at this time.  Preneed companies are like banks and have to be competitive to get client accounts.  As interest rates fall, as aniticpated over the next year or so, preneed insurance companies are likely to lower their “guaranteed growth rate” as well.  Another good selling point may be to tell potential preneed clients that they are catching a higher growth rate than might be expected in the future. . . That’s just another thought I have.

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