How to Construct the Three Essential Funeral Service Packages for Profitability
A step-by-step guide to designing service packages that simplify family decisions, maximize value perception, and ensure financial sustainability
Key Benefits of Strategic Package Design
• Simplifies complex decisions for grieving families• Increases average revenue through value bundling• Creates clear differentiation between service levels• Streamlines staff training and operational efficiency
Introduction: Why Service Packages Matter
When designed properly, service packages are much more than just groupings of services and merchandise. They represent a strategic approach to both business operations and family service—simplifying complex decisions for grieving families while stabilizing revenue and streamlining operations.
Yet many funeral homes construct packages based on arbitrary price tiers rather than meaningful service differences, or they fail to leverage the psychological and operational benefits of package pricing. In this comprehensive guide, we'll explore the art and science of package construction based on data from 156 successful independent funeral homes.
The Psychology of Package Pricing
Before examining specific package structures, it's essential to understand why package pricing works from a psychological perspective:
Decision Simplification
Grieving families face overwhelming cognitive load. By reducing dozens of individual decisions to a single package choice, you dramatically reduce decision fatigue and increase family satisfaction.
Value Perception
Well-designed packages create a perception of value that exceeds the sum of individual components. Research shows bundled pricing typically generates 15-25% higher revenue than itemized pricing in service businesses.
Choice Architecture
By presenting 3-4 clear options, you provide enough choice to meet varied needs while avoiding the "paradox of choice" where too many options create decision paralysis and regret.
Anchoring Effect
The presence of premium packages creates a reference point (anchor) that makes mid-tier packages appear more reasonable, even if they represent your target price point.
The Three Essential Package Types
Our analysis of package structures across high-performing funeral homes reveals that the optimal approach typically involves three core service packages plus specialized offerings for specific needs:
1. Traditional Service Package
Package Elements
- • Basic services of funeral director and staff
- • Transfer of remains to funeral home
- • Embalming and other preparation
- • Use of facilities for visitation (specific time period)
- • Use of facilities for funeral ceremony
- • Funeral coach and service vehicle
- • Memorial stationery package
- • Online obituary and memorial page
Strategic Positioning
Position this as the "complete experience" that provides the most meaningful ritual touchpoints and family gathering opportunities. Avoid value-diminishing language like "full service" or "standard service" in favor of emotionally resonant terms like "celebration of life" or "legacy tribute."
Pricing Considerations
The package should represent a 5-12% savings compared to itemized pricing while still maintaining strong margins. Be mindful that this package defines your brand's upper market position.
2. Memorial Service Package
Package Elements
- • Basic services of funeral director and staff
- • Transfer of remains to funeral home
- • Refrigeration/sanitary care (no embalming)
- • Cremation process or immediate burial
- • Use of facilities for memorial service
- • Service vehicle
- • Basic memorial stationery
- • Online obituary and memorial page
Strategic Positioning
Position this package as a meaningful ceremony option rather than a budget alternative. Focus on the flexibility of memorial timing and the personalization possibilities rather than the absence of the body or cost savings. This framing maintains the dignity of the service choice.
Pricing Considerations
The package should offer approximately 8-15% savings compared to itemized pricing, providing enough incentive to choose the package while maintaining healthy margins. This package often represents the best balance of revenue and operational efficiency.
3. Direct Disposition Package
Package Elements
- • Basic services of funeral director and staff
- • Transfer of remains to funeral home
- • Refrigeration/sanitary care
- • Cremation process or immediate burial
- • Basic container
- • Administrative assistance with permits/certificates
- • Basic online obituary
Strategic Positioning
Position this as a straightforward, efficient option rather than as "no service." The focus should be on dignity and professionalism even in simplicity. This package serves as a competitive necessity in most markets and provides an important reference point that highlights the value of your other packages.
Pricing Considerations
Price competitively relative to market conditions but ensure the package remains profitable. Avoid the trap of using this as a loss leader, which creates an unsustainable business model as cremation rates increase. Include enough margin to provide dignified, quality service.
4. Specialized Packages (As Needed)
Beyond the three core packages, consider creating specialized packages for specific community segments:
Veterans Service Package
Include military honors coordination, flag presentation, and other veteran-specific elements to serve this important community segment with dignity and respect.
Green Burial Package
For communities with strong environmental values, a package focused on eco-friendly options can differentiate your offering and serve an emerging market segment.
Cultural/Religious Packages
If your community has significant religious or cultural groups with specific funeral traditions, dedicated packages demonstrate expertise and cultural sensitivity.
Child/Infant Service Package
A specialized and often discounted package for families facing the loss of a child demonstrates compassion while providing clear guidance during profound grief.
Package Construction Process: A Step-by-Step Guide
Now that we've examined the key package types, let's walk through the process of constructing effective packages:
- 1
Analyze Your Service Data
Review your past 100 cases to identify the most common service combinations, merchandise selections, and average revenue. This data provides the foundation for packages that align with actual family preferences.
- 2
Determine Core Service Components
For each package type, identify the essential services that define the experience. Focus on the elements that create the most meaningful differences between package levels rather than minor add-ons.
- 3
Calculate Base Costs and Margins
Determine your direct costs for each service element and calculate the desired margin based on overhead allocation and profit requirements. Ensure that even your basic package maintains adequate margins for sustainable operations.
- 4
Set Package Discount Structure
Establish the percentage discount for bundled services compared to itemized selection. Typically, the traditional package offers 5-12% savings, the memorial package 8-15%, and the direct package 3-8%, though market conditions may affect these ranges.
- 5
Craft Package Names and Descriptions
Create emotionally resonant, dignified names that convey the essence of each package. Write descriptions that focus on the meaningful aspects of the service rather than just listing components.
- 6
Design Visual Presentation
Create a visually clear presentation format for both print and digital mediums. Use design elements to guide attention and make comparisons easy without overwhelming families with information.
- 7
Train Staff on Package Presentation
Ensure arrangement staff understand the value proposition of each package and can clearly explain the differences. Practice presentation language that emphasizes the ceremony and meaning rather than just features or price.
Package Presentation Best Practices
How you present your packages is just as important as how you construct them. These presentation strategies can significantly impact family selection and satisfaction:
Side-by-Side Comparison
Present packages in a side-by-side format that makes comparison simple. Use consistent categories across all packages to highlight meaningful differences.
Value-Forward Display
Lead with the experience and value provided rather than starting with the price. Discuss price only after establishing the meaning and purpose of each service level.
Visual Differentiation
Use design elements like colors, icons, or images to create visual distinction between packages while maintaining a cohesive, professional appearance.
Tiered Prominence
Give slightly more visual prominence to your target package (typically the middle option) through subtle design emphasis without making the distinction too obvious or manipulative.
Common Package Construction Mistakes to Avoid
In our work with hundreds of funeral homes, we've identified several common mistakes in package construction that undermine their effectiveness:
Arbitrary Price Tiers
Creating packages based solely on price points ("good, better, best") without meaningful service differences diminishes perceived value and commoditizes your offerings.
Too Many Package Options
Offering more than 4-5 package options creates decision paralysis and confusion. Focus on meaningful core packages with clear differentiation rather than numerous minor variations.
Inflexible Package Structure
Failing to allow for reasonable customization creates frustration. Packages should provide a starting framework that can be modified for specific family needs without completely dismantling the package concept.
Overly Technical Language
Using industry jargon or technical descriptions rather than emotionally resonant, benefit-focused language fails to connect with families' core needs and values.
Insufficient Margin Maintenance
Creating packages with too steep discounts that fail to maintain adequate margins, particularly for basic packages that may become increasingly popular as cremation rates rise.
Measuring Package Performance
Once implemented, it's essential to track package performance to refine your approach:
Selection Rate
Track the percentage of families choosing each package versus itemized selection. Aim for at least 70-80% of families selecting a package over itemization.
Average Revenue
Compare average revenue before and after package implementation. Effective packages typically increase average revenue by 8-15% while maintaining or improving family satisfaction.
Package Distribution
Monitor which packages are selected most frequently. A balanced distribution indicates well-designed options, while heavy skewing toward one package may suggest needed refinements.
Case Study: Midtown Funeral Home Package Redesign
To illustrate these principles in action, consider this case study of a midsize independent funeral home that revamped their package structure:
Background
Midtown Funeral Home* was experiencing declining average revenue despite stable case volume. Their existing approach featured five confusing package options with minimal differentiation and technical descriptions. Only 42% of families selected packages, with most preferring itemized selection.
Approach
The funeral home implemented the three-package framework described in this article, with an additional specialized package for their significant veteran community. They completely rewrote package descriptions to focus on the ceremony experience and emotional benefits rather than technical features.
Results (After 6 Months)
- • Package selection rate increased from 42% to 76%
- • Average revenue increased by 12.4%
- • Family satisfaction scores improved by 8%
- • Arrangement conference time decreased by 22%
*Name changed to maintain privacy. Data based on actual client results.
Implementing Digital Package Presentation
Modern funeral software should support effective package presentation, particularly as more arrangements occur remotely or with families spread across locations. Here's what to look for:
Visual Comparison Tools
Digital side-by-side comparisons that clearly highlight differences between package options with visual elements that aid understanding.
Remote Presentation Capability
The ability to share package information securely with remote family members, allowing collaborative decision-making regardless of geographic distribution.
Customization Options
Interactive functionality that allows families to see how modifications to packages affect both service components and pricing in real-time.
Integrated Contract Generation
Seamless creation of contracts and service agreements based on package selection, eliminating redundant data entry and administrative burden.
How Sacred Grounds Software Supports Package Strategy
Sacred Grounds funeral home management software was designed specifically to support effective package strategies with these key features:
Visual Package Builder
Create, customize and present packages with intuitive side-by-side comparison tools that make differences clear to families.
Remote Collaboration
Share package information securely with remote family members for collaborative decision-making, regardless of location.
Custom Package Templates
Create unlimited package templates with branded visual designs that reflect your funeral home's unique market position and service philosophy.
Performance Analytics
Track package selection rates, revenue impact, and other key metrics to continuously refine your package strategy for optimal results.
Related Articles in Our Pricing Strategy Series
Explore these related articles to develop a comprehensive pricing strategy for your funeral home:
The Funeral Director's Guide to Pricing Strategy & Service Packages
A comprehensive framework for developing profitable, ethical pricing strategies that balance business sustainability with compassionate family service.
The Ethical Balancing Act: Pricing Transparency and the FTC Funeral Rule
Navigate regulatory requirements while building trust through strategic transparency that reduces price sensitivity.
Using Competitive Data to Set Direct Cremation Pricing (State-by-State Analysis)
Explore regional pricing variations and strategies for balancing market competitiveness with profitability.
The Danger of Discounting: When to Say No to Price Negotiations
Learn why reactionary discounting undermines profitability and how to maintain pricing discipline.
Simplify Your Package Presentation with Sacred Grounds
Our visual package builder makes it easy to create, customize, and present service packages that simplify family decisions while maximizing your operational efficiency.