Lately I’ve been feeling a bit like Dr. Jekyll and Mr. Hyde. The Dr. Jekyll side of me wants to stick with tried and true ways to serve OGR members. My Mr. Hyde side is itching to try all sorts of crazy new ideas. Mr. Hyde is scary and unpredictable. Turns out his approach may be necessary for OGR and its members’ long-term survival because an even scarier and more unpredictable foe is about to hit funeral service: disruptive competitors.
Although disruptive competitors are making headlines these days, they’re not new. What’s new is that technology is enabling their numbers to explode. Southwest Airlines is an “old-school” disruptor that made a name for itself by offering inexpensive, no-frills service on underserved routes. More recently, ride-sharing services like Uber and Lyft have cut into taxi companies’ market shares. Air BnB is threatening hotels connecting people who have rooms, apartments or houses to rent temporarily with those who are looking for places to stay temporarily.
What makes an innovator so disruptive? According to author Clayton Christensen:
- Disruptors begin servicing a new, niche market, generally with a simpler and cheaper good or service, produced at lower margins.
- Disruptors are overlooked by established industry incumbents who are focused on feature-rich, higher-margin, ‘more interesting’ products and who don’t want to cannibalize revenue streams from existing products by pursuing this new, lower-margin product that the incumbents’ most profitable customers aren’t even asking for.
- Disruptors take market share from incumbents as the disruptive product or service’s performance improves and customers turn from the old market to the new entrant for the very characteristics that initially caused incumbents to dismiss the ‘disruptive’ market (e.g., less complicated, more efficient, more portable, easier to use, etc.).
Let’s face it. Consumers want what they want. Organizations that fail to pay attention to that fact will eventually collapse. Remember Kodak? They overlooked photographers’ interest in the convenience and affordability of digital photography. Blackberry went from innovator to nearly extinct by thinking apps appealed only to a segment of cell phone users.
Can this happen in funeral service? Consider this. People under40 years of age commonly use their phones for everything (except talking on the phone): they buy things online, pay restaurant tabs, share information with friends and work away from their offices. How likely are they to set an appointment to visit a funeral home so they can spend several hours making funeral arrangements if they have the option of making arrangements on their phones? I don’t know.
But I do know that companies with no connection to funeral service are identifying what people dislike about funerals and the funeral arrangements process so they can develop apps, online tools and 3-D printers that offer alternatives. These innovators are not boxed-in by how their grandfathers did things, what is dignified or what’s expected of them. They’re looking for ways to make funeral arrangements simpler and more economical because that’s what families want.
Is that good for families? Probably not, but they either don’t know or don’t care. They’ll rush past funeral professionals to anyone who will fulfill their wishes. Members of our society no longer tolerate burdens if they can help it.
The good news is disruptive competition is motivating funeral professionals to shake off outdated offerings and explore innovative ways to serve families. We have three possible responses when we face a new competitive model: 1) Be the first to offer new ideas; 2) Copy new ideas that have worked for others; or, 3) Do nothing and watch customers march by. Straight-laced Dr. Jekyll is okay with doing nothing. But beware. Lots of Mr. Hyde’s are lurking about with other ideas.
By Mark Allen, OGR Executive Director