8 min read

Benchmarking Software Costs: Are You Paying Too Much Per User?

Discover how independent funeral homes overspend on software by 35-65%. Our professional analysis reveals outdated per-user pricing models that unnecessarily drain profits.

Financial Reality Check

The average 5-user funeral home spends $5,700-$10,800 annually on software subscriptions that are inefficiently priced, feature-bloated, and functionally redundant. Modern pricing models could reduce these costs by 30-60% while maintaining or improving capabilities.

Introduction

The independent funeral service profession has historically been underserved by technology vendors. This market inefficiency has created a pricing environment that significantly disadvantages small to mid-sized operations – particularly those with multiple staff members requiring system access.

My analysis of software spending across 142 funeral homes reveals a disturbing trend: the average independent operation overspends on software by 35-65% relative to comparable businesses in other service industries. The culprit? Per-user pricing models that fail to align with the value delivered.

This article provides a data-driven examination of current funeral software pricing models, establishes professional benchmarks, and offers actionable strategies to reduce this unnecessary P&L leak.

The Per-User Pricing Problem: A Financial Analysis

The predominant pricing model for funeral home management software follows a per-user license structure – a model developed decades ago when software distribution, maintenance, and support costs were significantly higher. This model has persisted despite fundamental changes in software economics.

For a typical funeral home with 5 staff members requiring system access, current market pricing creates the following annual expenditure:

Software Category	Typical Per-User Monthly Fee	Annual Cost (5 Users)	Actual Usage Per User
Case Management System	$35-65	$2,100-$3,900	55-75% of features
Accounting Software	$25-45	$1,500-$2,700	30-45% of features
Form Generation	$15-30	$900-$1,800	25-40% of features
Website/Obituary Platform	$20-40	$1,200-$2,400	15-30% of features
TOTAL:		$5,700-$10,800

This pricing structure creates three distinct inefficiencies:

1
Staff members who use the system infrequently cost the same as power users — an arrangement that makes little financial sense given the dramatically different usage patterns
2
Feature bloat drives up costs for functionality most users never access — comprehensive platforms typically include features needed by less than 20% of customers
3
Redundant capabilities across platforms create payment for the same functionality multiple times — particularly for basic contact management and document functions

Industry Benchmarking: What You Should Be Paying

To establish appropriate benchmarks, we analyzed software spending in analogous service businesses with similar operational complexity and regulatory requirements (property management, elder care, and specialized medical practices).

The data reveals that optimized software spending should align with these metrics:

Business Metric	Optimized Software Spend (Annual)
Per case handled	$4.50-$7.25
Per full-time employee	$475-$625
Percentage of revenue	0.5-0.8%

For a funeral home handling 150 cases annually with 5 staff members and $1.2M in revenue, optimized software spending should fall between:

$675-$1,088 (case-based calculation)
$2,375-$3,125 (staff-based calculation)
$6,000-$9,600 (revenue-based calculation)

The wide variance in these calculations reflects the reality that funeral software is not yet subject to efficient market pricing. However, the midpoint of these ranges suggests annual spending of approximately $3,800 – significantly lower than the $5,700-$10,800 currently spent by most operations.

The True Cost of Overspending: P&L Impact Analysis

Software overspending creates a direct P&L impact that compounds over time. For a funeral home overspending by $4,000 annually:

5Y
5-Year Cost:$20,000 plus opportunity cost
10Y
10-Year Cost:$40,000 plus opportunity cost

The opportunity cost is substantial – this capital could otherwise be deployed for:

Facility improvements generating direct ROI
Marketing initiatives to increase case volume
Staff compensation to improve retention
Debt reduction to improve financial stability

For perspective, $4,000 annually represents approximately:

4-8

Traditional service profit margins

2-3%

Boost in net profit for many operators

100%

Typical annual maintenance budget for a preparation room

Modern Pricing Models: What to Look For

The software field has evolved significantly, with modern pricing structures better aligned with actual value delivery:

Pricing Model	Description	Best For
Tiered Flat-Rate	Single price regardless of user count	Operations with 4+ staff
Value-Based	Pricing tied to business results	Growing businesses
Freemium	Core features free, premium features paid	Budget-constrained operators
Usage-Based	Pay only for actual system usage	Seasonal businesses

These models better reflect the reality that cloud software marginal costs are near zero per additional user, with value primarily determined by features utilized rather than seat count.

Software Consolidation: Eliminating Redundancy

Beyond pricing model issues, significant overspending occurs through functional redundancy across multiple platforms. Our analysis reveals the average funeral home maintains 4-7 separate software subscriptions with 35-50% feature overlap.

Common redundancies include:

Contact management functionality duplicated across 3+ systems
Document generation capabilities in multiple platforms
Calendar/scheduling tools replicated across systems
Reporting functions fragmented across platforms

By consolidating to comprehensive platforms, funeral homes can eliminate both the direct cost of redundant systems and the indirect cost of maintaining data consistency across platforms.

Negotiation Strategies: Leveraging Your Position

Most funeral home operators significantly underestimate their negotiating leverage with software vendors. The customer acquisition cost in this field is extraordinarily high due to:

1
Long sales cycles (typically 6-9 months)
2
High-touch onboarding requirements
3
Strong word-of-mouth influence on purchasing decisions
4
High lifetime value of retained customers

This creates leverage opportunities that few operators utilize:

Multi-Year Commitment Discounting:Trading contract length for reduced per-user fees (25-40% potential savings)
User Tier Negotiation:Establishing blended pricing for different user types (15-30% potential savings)
Feature Package Customization:Paying only for functionality you'll actually use (20-35% potential savings)
Competitive Displacement Offers:Leveraging transition offers when switching platforms (30-50% first-year savings)

Implementation Without Disruption: The Migration Pathway

The primary objection to software consolidation is operational disruption during transition. This legitimate concern can be mitigated through structured implementation:

1
Data Migration Planning
Identify all data requiring transfer to new systems
2
Parallel Operations Period
Maintain old and new systems simultaneously during transition
3
Phased Rollout Strategy
Begin with non-critical functions before core operations
4
Off-Peak Implementation
Schedule major transitions during historically slower periods
5
Staff Involvement
Engage key users in selection and implementation decisions

With proper planning, transition disruption can be minimized to near-zero impact on family-facing operations.

Sacred Grounds: The Zero-Cost Alternative

For funeral homes seeking immediate cost reduction, Sacred Grounds offers a free tier that provides comprehensive functionality without per-user fees:

Unlimited users with role-based permissions
Core case management functionality
Document generation for common forms
Basic financial tracking capabilities
Secure cloud-based data storage

While premium features require paid subscriptions, the free tier eliminates the core per-user pricing inefficiency with zero financial risk, providing an immediate positive ROI from day one of implementation.

Conclusion

Software costs represent a significant and often unexamined P&L leak for independent funeral homes. The persistence of outdated per-user pricing models, coupled with system fragmentation, creates unnecessary operational expense that directly impacts profitability.

By benchmarking your current spending against professional standards, consolidating redundant systems, and leveraging modern pricing models, you can reduce software costs by 30-60% while maintaining or improving functional capabilities.

In a profession where each percentage point of margin matters, eliminating software overspending represents one of the most accessible opportunities for immediate profit improvement.

P&L Leaks & Overhead Reduction: The Funeral Home Director's Guide

Comprehensive analysis of the most common profit leaks plaguing independent funeral homes.

5 Hidden Financial Risks of Running 1990s-Era Management Software

The often-overlooked costs and risks of maintaining outdated technology in funeral service operations.

Ready to benchmark your current software spending?

Sacred Grounds offers a free tier that eliminates per-user pricing inefficiency without upfront investment, providing an immediate positive ROI from day one.

See How It Works View Pricing