Selling prearranged death care products and services builds tomorrow’s market share today. For Stewart, helping families make prearrangements has been a successful strategy since the 1940s. This approach gives families the assurance of knowing that they have been able to make carefully considered decisions, and it also helps them avoid unnecessary confusion and financial difficulties during an emotionally stressful time.
In last year’s annual report, we described some changes we made in our preneed sales strategies in fiscal 2000 to optimize cash flow and to prepare for the implementation of new accounting requirements. We have observed that the revised strategies have improved the quality of our sales and resulted in increased cash flow. The changes included adjustments to contract terms and conditions, a new simplified and standardized sales compensation structure and a rearrangement of our product mix.
As a result of these modifications, we experienced some attrition in our preneed sales force in the latter part of fiscal 2000. Since then, however, our preneed sales force has held steady. In fact, using the criteria of compensation, training and career mobility, Selling Power magazine’s October 2001 issue ranked Stewart Enterprises among the best companies to sell for in the United States. We have retained our best family service representatives — the
most effective producers of quality preneed sales — while reducing our selling costs by restructuring our sales organization. Our salespeople are now producing the highest-quality sales ever for our company.
Our objective is to sell more into our backlog of prearranged services and merchandise than we deliver. Last year, we sold four domestic preneed funerals for every three delivered from our backlog, resulting in continued growth. At the close of the year, the domestic backlog approximated $1.6 billion, which represents about $2.2 billion to $2.3 billion in expected future revenue.
In an ongoing effort to find new and better ways to work with families, the Company’s Sales and Marketing Division developed a new selling methodology last year that concentrates on a family’s buying needs. The new multi-step sales approach is based on relationship selling, a process of building trust and cooperation with families over time to generate higher-quality sales and more satisfied customers. Early results from pilot tests are positive.
Five years ago, Stewart established its Shared Services Center (SSC) as an initiative to help
the Company strengthen customer satisfaction, increase productivity and lower costs. Today, we are the only company in our industry to successfully operate a shared services center. Located in New Orleans, Louisiana, the SSC performs all the back-office functions for our domestic operations. The Center has teams of accountants, contract processors, customer service representatives, quality assurance representatives, trust administrators
and receipts-and-disbursements professionals.
Today, to illustrate the SSC’s effectiveness, the Company functions using one computer system and one general ledger — down from five just a few years ago. As another example, the Center has significantly reduced contract-processing costs by installing imaging technology and by standardizing and streamlining contract processes. We believe that the SSC makes a significant contribution by helping us to better serve our families and improve our costs in the process.
No matter where in the Company one looks, the people of Stewart Enterprises possess the know-how, the enthusiasm and the commitment to provide families with the finest in funeral and cemetery services. Whether it is a cemetery maintenance person, a staff accountant, a long-time funeral director, a family service counselor, a senior executive or a receptionist, individual contributions add up to just one thing: Success — driven by the human factor.
