Many local business owners can say they know their communities very well. But often, that understanding of a community’s demographics, attitudes and preferences is based on anecdotal evidence – not data. For example, a business owner might make assumptions about how the business is perceived in the community based on a small sample of feedback he or she personally receives from clients. While instincts and personal experience can certainly be valuable, they don’t provide all of the information necessary to make strategic and tactical decisions that result in long-term funeral home business success.
An investment in market research can uncover information about trends that may impact the future of your business. For example, observable shifts in population may already be affecting your area, which could provide short-term and long-term opportunities and challenges. The information that market research brings to light can help you make proactive decisions such as re-evaluating your funeral home marketing activities and product and service offerings.
It’s important to have a strong understanding of your community’s demographics. If you haven’t conducted market research lately, start by collecting data that can tell you more about the basics of your population size and makeup. This includes:
- Total population
- Gender mix
- Marital status
- Age distribution, with an emphasis on age 65+
These data points help analysts determine a great deal about the future of a community. Here are some examples of how understanding the characteristics of your community’s residents can impact your firm:
Total population. Examining this data can provide insights on population trends, such as whether or not your community is growing. You’ll also have the opportunity to plan for what this data could mean for your long-term business viability. It’s great for a community to experience growth, but you’ll need to be prepared to expand your business (staff, facilities, etc.) in order to meet demand. If the data indicates a trend of population decline, what actions would you take?
Ethnicity. The United States is experiencing notable shifts in ethnic makeup. If the population is expected to change in your area, how will you alter or supplement your firm’s services to meet the needs of your client families? Consider how you and your staff can acquire the knowledge and skills required to best meet your customers’ needs.
Income. It’s important to gather data about income, as this can drive your service offering and pricing decisions. You’ll also want to measure and assess the expected income trends for your area. Of course, income is just one of the factors that may affect your pricing model. Don’t forget that “price shoppers” still want to receive high value for their money.
Age distribution. Homesteaders’ research indicates that people ages 65+ are receptive to the benefits of advance funeral planning. Based on our focus group studies, we believe people in this group may be more emotionally and rationally prepared to prearrange their funerals. Is the number of people in this age group expected to grow or decline for your community?
When you become equipped with the insights described above, you’ll have the foundation you need to improve service to your client families and help ensure your business’s long-term stability and success. In an upcoming blog post, we’ll explain why you not only need to understand who is in your community, but also what they think about funeral service.