A robust preneed program offers many benefits for funeral homes, such as securing business for the future and increasing awareness and preference for the firm. But how well do you really know the results that your preneed program is driving — and what that means for improving your strategies for managing and growing your business?
Measuring, monitoring and acting on key performance indicators (KPIs) will help you set benchmarks and establish goals for how you will take your program to the next level. With growth tracking and optimization tools and processes in place, you can identify the most effective sales and marketing KPI tactics, resolve gaps in service, improve satisfaction and ultimately achieve stronger results.
Why Tracking KPIs is Critical for Preneed Programs
Your preneed program’s KPIs tell the story of how your firm is connecting with families, their satisfaction with the services you provide and how well you are growing and managing your preneed business. Identifying trends in performance can proactively identify potential problems and ensure you’re allocating the right resources to your program at the right times. In addition to noting and reviewing the performance of your firm, you can identify trends in your service area and in the seasonality of your business that will inform your strategic planning.
Measuring your results can help answer questions like:
- How effectively are you converting preneed leads to preneed contracts?
- Which funeral home marketing tactics are most effective for your target audiences?
- Are you maximizing opportunities to connect with potential client families?
- How satisfied are your customers with their preplanning experience — and how likely are they to recommend your services?
Preneed KPIs for Funeral Professionals to Track
Your preneed program’s success depends on many variables, and pinpointing the metrics that relate to your funeral home business goals will empower you to make more informed decisions about how to structure and manage your business. We’ll share several metrics that can help you get a clearer picture of how your program is performing, and what areas you can improve to secure even more business for the future and provide the best possible service for families. This is certainly not an exhaustive list of preneed performance metrics but can help you begin to track data points that support your understanding of your preneed program’s performance.
Number of Contracts Sold
What it is: The total number of preneed contracts sold over a given period of time.
Why it matters: This number provides a clear snapshot of your sales performance over a specific period of time. It can provide insight on how effectively your preneed marketing and sales strategies are engaging with potential clients and converting leads into actual contracts sold. This metric often serves as a mainstay for evaluating overall growth. Use this number to identify trends, set actionable goals and refine strategies to improve lead conversion and drive growth.
Average Contract Value (ACV)
What it is: The average dollar amount of contracts sold during a specific period of time.
Why it matters: This metric can shed light on the financial impact of each contract sold — preneed and eventually at-need. ACV not only has impact on the preneed business and commissions earned but can also be predictive to future revenue recorded for a funeral home at the time of at-need service. ACV can help identify opportunities to optimize pricing, offer premium services and refine product offerings to best meet clients’ preferences. It can also provide a benchmark for evaluating the effectiveness of sales strategies and forecasting long-term revenue potential.
Cancellation Rate
What it is: The percentage of policies that are terminated by customers or the insurer before the end of the policy term.
Why it matters: This metric can help surface potential issues with customer retention and satisfaction. A high cancellation rate can signal issues with customer service, product training or product offerings. Conversely, a low cancellation rate suggests strong customer loyalty and effective policy management and explanation. Monitoring this data regularly allows you to identify patterns or customer segments with high cancellation rates.
Preneed to At-need Ratio
What it is: Measures the proportion of preneed contracts to at-need contracts over a specific period of time.
Why it matters: This metric provides critical insight into the balance of your funeral home’s revenue streams. A higher ratio suggests stronger preplanning activity, which can provide greater financial stability and forecasting for your business. Keeping track of this metric enables you to monitor market position, operational efficiency and competitive performance.
Sales by Lead Source
What it is: This metric tracks the number of preneed sales generated from each of your lead sources (website inquiries, direct mail campaigns, referrals, community events, social media, etc.) over a specific period of time.
Why it matters: Understanding which lead source generates the greatest sales gives you the ability to evaluate the effectiveness of your preneed marketing efforts. This will allow you to allocate dedicated resources to high-performing channels and refine underperforming ones, ultimately maximizing your ROI.
Resources to Measure, Track and Use Your Results
Your metrics are only as effective as how you use them to drive positive change. While gathering insights on preneed KPIs like these, and others that are relevant to your business, is an important step, you also need tools that ensure you’re equipped to track trends over time, discover the reasons behind those results and implement steps to increase your effectiveness and efficiency.
Customer Relationship Management (CRM) System
An effective funeral home CRM can streamline and enhance your preneed program in many ways — not just in tracking lead statuses but also in providing a clearer picture of the overall performance of your preneed activities. Metrics like the ones mentioned in this article, and others, can ensure you have the data you need to make strategic decisions.
EnGauge is a powerful CRM system for funeral professionals that integrates seamlessly with the crucial performance metrics funeral homes need. With its intuitive dashboard analytics and reporting, EnGauge provides insights into your data that allow you to enhance your preneed program’s performance.
Market Research and Demographic Insights
It’s important to understand your own funeral home business data, but adding market research insights builds upon that understanding to help ensure the audiences you’re targeting are the ones that are the right fit for your business objectives. An in-depth market analysis can help you surface trends and characteristics in your service area that may have otherwise gone undiscovered.
For more information about preneed KPIs and tools, and how you can use them to optimize your program to drive business growth, contact your Homesteaders account executive.
