Price and service in a changing market

words: Malcolm Flanders

Let me begin by thanking you all for your continued support for Golden Charter, it is appreciated.

However, the news that the Co-op grew its pre-paid plan sales by over 70% in the final quarter of last year should come as no real surprise.

Seeing changes in price and aggressive advertising, we understood it would not be investing so heavily without positive returns. What we don’t know yet, and won’t until the Funeral Planning Authority publishes its annual statistics, is just how many of those plan sales were taken from Independents.

The market

Besides the Co-op, there is lots happening. Many funeral directors didn’t increase prices in 2016 and several are now offering a ‘direct to cremation’ option; media and parliamentary interest in funeral poverty issues is gathering momentum; crematoria are routinely marketing out of hours slots; and the Co-op, Dignity and Age UK have all launched limited plans.

All this combines to put pressure on margins for everyone involved in the funeral profession. While Co-op activity may have had limited impact on your locality to date, it will only be a matter of time as we anticipate it will continue to advertise heavily for some time and may continue to discount prices.

Funeralcare has built a proposition based on a price point promoted to attract customers. In reality, it carries out few funerals at those prices. Its published average funeral price shows that, on average, it charged more than SAIFCharter members for similar services in 2015.

The headline price simply attracts traffic from Independents by giving the impression that better value is available from the Co-op! While there is little doubt Independents offer better value and a tailored service proposition appropriate to their locality, over time this Co-op pricing strategy will inhibit your market share.

Golden Charter’s response

To respond, we will aggressively discount our plans until 31 March to win back market share for Independents, and we have introduced a new ‘Value Plan’.

Value Plan features:

• Full funeral director services for cremation or burial
• Disbursements included
• Will included
• Funeral service at place of cremation/burial only
• Date and time selected by funeral director

Clearly this comes at a cost for Golden Charter and for Independents, but having consulted shareholders up and down the country recently, it’s clear winning families remains your number one priority.

As Frank Lynch, of Glasgow’s Frank J Lynch Funeral Directors, put it: “The Co-op plan pricing is costing me business. Golden Charter needs to do something about it so that we can compete.”

We will offer plans at these prices directly and Independent Way will be available at appropriate prices nationally. I would urge all Independent Way sellers to look again at the Co-op prices in your area. If you are one of the few Independents offering plans at higher levels , you should think seriously about ensuring you can promote a direct comparison to Co-op headline prices.

Discounting these plans will mean lower resultant maturities – but still the best in the industry, particularly for exclusive sellers.

An up-side will be a surge in allocations from our direct and intermediary business; this too will build future volumes. This is just part of our ongoing support.

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