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Many of our key operating strategies have been in place for years. For example, to satisfy varying consumer preferences, we have long provided a full range of products and services.
We offer them on either a preneed or at-need basis. In recent years, we have added alternative services to the mix. During 2001, our employees continued to improve these operations while serving more than 192,000 families...one at a time.
Stewart Enterprises has long been an advocate of combination operations, that is, funeral homes established on or adjacent to the grounds of our cemeteries. Today, approximately
47 percent of our cemeteries operate as combinations. Our experience has demonstrated that the combination of a funeral home with a cemetery can significantly increase the market share and profitability of both. The funeral home immediately becomes a resource for the cemetery’s existing customer base of families, and both facilities become more attractive to new customers who desire the convenience of comprehensive services in one location.
In fact, our success with combinations led us to form alliances with third parties to construct, own and operate funeral homes on the grounds of their cemeteries. In late September 2001, we opened our fifth funeral home in a cemetery owned by the Archdiocese of Los Angeles. While the average U.S. funeral home performs about 100 funerals per year, our five facilities together perform about 2,700 funerals per year. This excellent performance illustrates how well received the convenience offered to families by combination operations has been and the successful working relationship between our team and the Archdiocese’s Catholic Cemeteries team.
An important funeral service initiative we launched in 2001 involved greater personalization of the funeral service. Consumer research we commissioned in 1999 and subsequently evaluated in 2000 reconfirmed our belief that consumers are willing to pay for enhanced death care products and services tailored to their individual needs. Based on this research, we developed a new business model called Custom Funeral Planner (CFP). CFP goes several steps beyond our funeral-arranger-training program. While the latter focuses on helping our people improve their communication with families, the CFP model allows the family and the family’s preferences to be the driving force in the funeral arranging process. We began field-testing CFP in markets across the U.S. during 2001. Early results of this redesigned funeral arrangement process are promising. We continue to evaluate its impact on customer satisfaction and expect to expand it to additional locations during 2002.
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