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'HELL HAS FROZEN OVER'
International Memorialization Supply Association President Lynn Illig of Matthews, Past IMSA President Stan Scruggs of Cemetery Funeral Supply, ICCFA 2006-2007 President Paul Elvig and 2007-2008 President Mark Krause join forces to cut the ribbon to the 2008 Convention Exposition showcasing industry suppliers.
"Hell has frozen over," Mark Krause said as he accepted the ICCFA presidency in March. "There's an undertaker in charge of the cemetery guys." Find out how this change-embracing funeral director has kept his firm growing and what he thinks cemeterians and funeral directors have to teach each other.
Krause sees future in embracing all segments of the profession
Mark Krause, CFuE, the first funeral director with no connection to a cemetery to become president of the ICCFA, is known for speaking his mind, perhaps most famously in his oft-repeated comment that half the funeral homes and cemeteries in the United States are outmoded operators who need to "go away."
In his first speech after being handed the gavel, Krause said, "Hell has frozen over; there's an undertaker in charge of the cemetery guys." Unlike many ICCFA members, he is not involved with a combination operation-they are prohibited in Wisconsin.
Krause is a fourth-generation funeral director who runs the business with one of his brothers, Gregg, and a cousin, Brad Krause. But he's always looking forward, not back. He is in charge of strategic planning for his family's company, and he plans for it to be among those that don't "go away," but evolve and thrive.
ICCFA Magazine talked to Krause about funeral service, how someone with no cemetery connections got involved in the formerly all-cemeterian ICCFA, what his plans are for his year in office and where sees the profession going.
How did you get involved in funeral service?
Krause Funeral Home is a third-generation business, but I'm actually a fourth-generation funeral director. My grandfather worked for his father-in-law at a funeral home until he and his in-laws had a parting of the ways.
My grandmother urged my grandfather to start his own funeral home, so he did in 1933, about six blocks away from his in-laws', right on the same street. Within 15 years, that other funeral home disappeared. More than 75 years after my grandfather started it, Krause Funeral Homes is still thriving.
So you come by your "separating the wheat from the chaff" attitude honestly, I see.
May be. My grandfather ran the company until about the time my grandmother died, in 1960. He then turned it over to my father and uncles, who were in their early 30s at the time-pretty young. At that time, it was a small family business doing about 140-150 calls a year.
That generation retired in the 1990s, with one of my uncles being the last to retire, in 1999. That's when my generation took over, meaning me, two brothers (one of whom recently got out of the business) and a cousin. At that point, we had grown to have three traditional funeral homes.
Our original funeral home was in the inner city. In about 1958, they built our Capital Drive location. I remember the banker telling my dad and my grandfather at the time they built the new facility that we were going to go out of business because it was so far out of town. Well, within three or four years, we ended up closing the inner city location because everyone wanted to come to the new place.
We opened up another location when I started working here. They started building it in 1975; I had just completed my first year of college. They brought me on to help with the construction of the building, help clean up the job site. I also got my apprentice license and they started using me on funerals, doing transfers, cleaning the place up in back-all the usual jobs.
We opened our third location in 1993 after a market study by MKJ Marketing pointing out that every day we didn't have a funeral home in that area was costing us a lot of business. Based on that advice, we built the new location, and the market study was right on the money.
Our fourth location, our discount operation (Informed Choice), opened in March 2000. We did it as a response to the marketplace. I saw that the funeral market in our city was either going low price or high quality. With our funeral product being very high quality, we decided to try to help control the low-price market.
The story discounters often give is "We do the same thing for less money." Well, that's not true; they don't do the same thing, but the consumer doesn't know anything other than to ask price. Part of our reason for starting a discount operation was to educate people at the low end of the market about the service differences. No, they don't do the same thing for less money.
How do you advertise your low-price location?
"When price matters." I guess the message for our traditional home is, "When quality matters." Our Krause Funeral Home & Cremation brand is all about customized, personalized funerals that create a wonderful funeral experience allowing you to say goodbye to your loved one. The Informed Choice brand is all about price. If you don't want or can't afford a traditional funeral home, we can do something of good quality at a more affordable price.
And that's why you gave it a separate name, to make the distinction clear?
Correct. Like Target and Marshall Fields, or Sheraton and Motel 6. They go after different market segments.
When did you add cremation to the Krause Funeral Homes brand?
We added cremation the day after our last generation person retired.
Was that a coincidence?
No. I don't want to say it disrespectfully, it's just that the previous generation really thought that if we had a crematory and talked about cremation, it would promote cremation. My feeling on it was that cremation is very much consumer driven. It's not whether we want to promote it or not, it's whether we want to be recognized as the people who serve that market segment well.
I think a lot of consumers don't know that funeral homes handle cremations. So maybe you need to add "and cremation service" instead of just saying "funeral home." I think it's about being more obvious about what we do.
We also installed our own crematory in 1999. The previous generation had felt pretty strongly about not having a crematory, again feeling that it would promote cremation.
Our generation saw the need to look at it a little differently. We put in a crematory, but not in the typical way. We put it into a chapel setting, with nice furniture and pictures on the wall and an Oriental rug on the floor. It's adjacent to one of our visitation rooms, so we can make the cremation a nice experience rather than putting it in an industrial setting in the garage, for example.
We offer our consumers tours at any time, unannounced. That's what our brand is all about. I challenge other operators to operate with that kind of flair for cremation, and to be willing and able to show their crematory operation to consumers at any time and be proud of it.
How does the discount service do?
It's in the black every year. It's a strategic offering, also-a firewall, as Bill McQueen (Anderson-McQueen Funeral Homes, St. Petersburg, Florida) says. We've actually referred a number of families to Krause. They realized they weren't going to get what they were looking for at a discount operation.
I think 80 percent of our consumers think all funeral homes do the exact same thing, and that's why they'll pick a place based on location, or if they know someone who's a funeral director. But the reality is, funeral directors are just like car mechanics or doctors or attorneys or school teachers: There are good ones and bad ones.
So how do you get the word out that you're one of the good ones?
There's where your marketing plan comes into place. It's all about differentiation. Can you adequately explain how you're different than your competitor? And can you do it in a logical, coherent way so that the consumer understands it? Our whole marketing plan is based on fighting the idea that there's no big difference in funeral homes and what they offer.
Because funeral service is not something the consumer will shop for very readily, it takes away the competitive edge in our profession, makes a lot of operators less sharp than they would be otherwise. I've said this before: I think half of the funeral homes and cemeteries in our country need to go away, because they do a bad job and they hurt the rest of us.
If a consumer goes to a funeral where the body doesn't look good or the service is awful, when they have a death in their family, what happens? They might not think of calling a different funeral home, they might think, "Oh, they all do the same thing. Do I really want to spend the money to do that? Why don't I just have a party or do something at home? I'll have them get rid of the body and then we'll have a celebration."
And I think that's why cremation took off like it did in the '60s and '70s.
I had lunch last week with a friend in her 30s who was asked to write the obituary for an elderly relative who had died. When she called the funeral home to find out where to e-mail the obituary, she was told no one there knew how to use e-mail! She had to send it to another relative, who then had to drive 40 miles to the funeral home. She couldn't believe it. Funeral homes who think their clients are all old and don't care about keeping up with technology forget that some of the family members who are going to be involved in planning are not so old.
I contend our market is not the old people, it's the women in the family, age 35 to 40 and above. Those are the primary decision-makers when it comes to funerals. The funeral business, in a way, is kind of a cottage industry that got big. It's a "mom and pop industry," it's a very relationship-oriented business, much like your local pharmacy. And especially in the East, it's more of a cottage industry, guys who run their 20- or 30- or 40-call funeral home as a hobby rather than a vocation.
There might be exceptions in metropolitan areas, but in most of America, funeral homes are still relationship businesses-as are cemeteries. Sometimes what draws people to the business is the owner's personality, not the brand. Or the brand is the personality. It's that funeral director, that cemeterian.
Are those small, "hobby" firms the ones you think are doing a bad job?
Oh, no, no; there are bad firms in the big cities. There are bad firms everywhere. We all say we want a quality business, but what does that mean? "Because I care" doesn't mean that you do. Because we want it that way doesn't mean that it is.
And I think the difference between good and great funeral homes is commitment and persistence. The difference between a good and great funeral home is that "extra" people give to make it personal, to make it special.
I think large companies and urban funeral homes with multiple locations can be challenged by not having a boss with hands-on involvement. The boss isn't watching over people's shoulder, people are not learning from him or her and all of a sudden you get people thinking they're 9 to 5 funeral directors. The funeral business is not 9 to 5; it's not just a job, it's a lifestyle.
I've rarely met a funeral director who doesn't think he's management material. But that manager-type funeral director is more rare than people think, because managing involves a whole different mindset. What makes us good funeral directors makes us bad business operators sometimes.
The funeral director mentality is warm and fuzzy, like a social worker. "I'm here to make you feel good, I'm here to make this happen for you and take care of you." Funeral directors do that very well. But often that's the antithesis of running a business and making tough decisions.
Are you warm and fuzzy or a tough businessman?
I was very warm and fuzzy when I met with families every day. I learned that so young I can flip into that mode instantly and do it quite well; I do miss working with families daily. I view my job now as being in the company's "plotting and scheming" department. My role is to look at where my company needs to be five years from now and figure out how to get there. It's strategic planning and being entrepreneurial.
I went back to school and got an MBA to help me understand how to run a business, which is much more complicated than just showing up and working out of your checkbook.
When did you join the ICCFA?
I was part of the original group of funeral directors brought in in 1996. (Past President) Irwin Shipper came to Wisconsin to talk to the break-off funeral directors association we had started when the state association tried to basically get rid of preneed. A bunch of the more progressive funeral homes banded together and started the Funeral Service Alliance of Wisconsin. We became very politically active and got our preneed law passed.
Our little renegade state association is as powerful politically as the old, entrenched funeral directors association in Wisconsin that has four times the membership, and it's because all the big, progressive firms are in our group, are politically active and we're usually on the right side of the issues. We're about being proactive and not doing "fence me in" legislation.
What appealed to you about joining a formerly cemetery-only group?
It was about attitude. It was about their outlook on how business should be, and how our profession should be. It was about being proactive rather than reactive. It was about creating opportunity and looking at the future as something positive rather than "Oh, change is awful; we have to dig in and not let that happen."
I think a lot of funeral directors are very reactive types, just because of the nature of what we do. We sit and wait for the phone to ring and jump into action. We take care of the family at this awful time, handle a very emotionally charged event, get done at the cemetery and then take a deep breath. The phone rings again and we jump back into action.
The ICCFA is proactive. It's always looking for what comes over the next hill and how we can we best provide our consumers with what they're looking for but maybe not getting, how we can enhance and promote funeral service and cemetery operations, rather than wishing we were back in the '50s. That's what I saw different with the ICCFA. It's pro-preneed and pro-consumer, while being pro-death care professional at the same time. It's refreshing.
I came onto the board of directors after being a member for a year or two. A handful of us were appointed, because they were afraid that none of the funeral directors would get elected! I then ran and won reelection. Then (Past President) Carol Caunter Llewellyn asked me to be a vice president.
I'm so proud of our organization, because we continue to constantly do the right thing. It's about our attitude toward what we do, how we look at our consumers, our members and our suppliers. One thing that rubs me the wrong way is how a lot of the funeral directors groups treat suppliers; they don't look at them as equals. We need to embrace our suppliers and not keep them at arm's length. I think ICCFA does a better job of that than others.
The ICCFA embraced funeral directors, and we're actually becoming the preeminent funeral directors association. Our star is rising. And here I am, a funeral director leading an association that was once just cemeterians. That's a leap of faith I don't know that you'd see in another association.
When you talk to funeral directors, what do you tell them about why they should join the ICCFA?
I ask them, "Are you interested in what the future has to hold or in clinging to the past? Are you interested in being around people who are can-do people, who want to see your business grow? That's what the ICCFA is.'" I talk about the interaction that we have at our conventions and meetings, our outstanding programs. It's not about egos, it's about ideas. And every time I ask someone to attend one of our meetings and they do, they say, "It is a whole different feel than I've been used to."
What have you learned from hanging around with cemeterians?
I think cemeterians are really good at being proactive, at being businesspeople. I think that when it comes to preneed, to how we present what we offer, cemeterians do it at a very, very high level. I think what funeral directors bring to the plate is a different level of service to the consumers.
That's not to say that funeral directors aren't good businesspeople, or that cemeterians don't offer good service. But our focuses tend to be in different directions. And the melding of the two is what happens at the ICCFA. It kind of brings the best of both worlds together.
What do you think are the biggest challenges-or opportunities, whichever way you want to put it-for cemeterians and funeral directors in the next few years?
I think some HR issues are at the forefront. The people who work for us and what they're willing to do and how they do it is constantly changing.
Another is meeting the needs of our consumers. I don't think our consumers know what they want, but they know what they don't like. So our goal is to try to figure it out and be waiting for them. If we aren't, consumers are going to find it elsewhere, and that's when we stand to be taken out of the picture. That goes for crematories, funeral homes and cemeteries.
You're talking about concern about hotels and others getting into the business?
Hotels, restaurants.
How do we, as death care providers, not only provide a personalized, customized service that has value and meaning, but also keep adjusting, because that target is constantly moving?
If we can provide outstanding service, give them a family event-and a funeral is a family event-and provide it in a way that has value and meaning for them, then they're going to come back. But that's a moving target. What people found value and meaning in five years ago is old news today.
Videos are the hot thing at funerals now, but what's going to be the hot thing next year? I remember when picture boards were cutting edge. What's next? We just started doing live streaming broadcasts of our funerals online. Just a handful of us are doing that now, and you know what? Next year, it's going to be expected.
My role in the "plotting and scheming" department is to figure out what that next thing is. The key is to constantly be creating options for consumers. The therapy dog, the food service, the alcohol service.
How is the beer and wine service going?
It's been a hit. Every week, we're getting a few people who choose it. It's all part of being in the hospitality business. We're not in the funeral business anymore; we're in the hospitality business.
Do you have a concierge service?
We experimented with it, but found that people weren't using it enough to justify putting a lot of time and effort into it, at least not in our market. That's not to say that we might not revisit it in the future. We swing at lots of balls; we don't hit every one. The motorcycle hearse from Tombstone Hearse was a lot of money, but it's been a hit. Oliver, our grief therapy dog, has been a home run.
I try to examine all the different aspects of what we do and how we do it. Do we need a location in a different spot? Do we need to emphasize this brand or that brand? What kind of marketing do we feel is most effective now? What things do we need to adjust so that we keep evolving what we do? I've got to hand it to our funeral directors; they have been really good at dealing with all the change we put them through. A few years back, I said our goal was for our least effective funeral director to be better than anyone else out there, and I think we're pretty darn close.
Now, can we be better? Absolutely. As Ken Camp says, be pleased, but don't ever be satisfied. I think when you become overly satisfied and stop reaching, you're in trouble
You don't think cremation will be the death of the business?
Oh, gosh, no; it's an opportunity. Cremation can be very successful if we figure out how to do it the right way.
But cemeteries are still looking at a 50 percent retention rate as great, and that's not so great compared to the days when it was 100 percent.
Right; our cheese has been moved, absolutely. And that's what's so cool about the ICCFA: We have a lot of people willing to share what they do and how they do it. And the next guy picks it up from there and takes it to the next level and tells everyone how that worked.
Anything else you want to say as you begin your year as ICCFA president?
I'm very honored to be president of the ICCFA; it's not something I take lightly. It's a privilege I've been handed at the indulgence of the members. It's my turn to be the lead goose.
Talk of geese isn't going to endear you to cemeterians!
(Laughs) That's true. But you know what I'm saying. It's just my turn. So often smart people avoid leadership roles because they're not comfortable with them or don't think they have something to offer, when they do. Or they just don't want to be bothered with it because they have their own affairs to tend to. But if the smart, good people don't take time to be involved in a leadership role, then who is it left to?
I think everybody needs to give a little bit back from time to time. Teach, work behind the scenes, write an article-the association offers a lot of ways you can help make it viable and vibrant. I guess my message is, "Step up and take a swing."
What is so good about the ICCFA is we're inclusive, not exclusive. That's a very subtle difference, but it's miles wide.
Copyright ICCFA 2008
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