Funeralocity founder and CEO talks about the startup
A Miami entrepreneur is on a mission to make shopping for a funeral home as easy as ordering off Amazon Prime.
Ed Michael Reggie, a serial entrepreneur and Miami resident, first came up with the idea for his funereal venture a few years ago, when a colleague was having trouble planning a funeral. So he started researching the funeral industry. He was surprised to find so little price information for funeral services online.
“You can’t shop for a funeral like you can for a car,” Reggie said. “In the Amazon world, funerals seem to have been the exception.”
Reggie’s website, cheekily named Funeralocity, aims to change that.
In a survey of 211 funeral homes in 25 cities, only 27 percent of funeral homes with websites posted any prices online, according to a report compiled by the Funeral Consumers Alliance and the Consumer Federation of America in 2018. And only 16 percent posted a full general price list.
Reggie started feeling out consumer interest with a test market in Atlanta in 2017. He officially launched the website in April this year, covering funeral homes in the top 100 metro areas across the country. In Florida, Miami, Fort Lauderdale, Hollywood, Tampa and Fort Myers are among those featured.
Funeralocity has pricing information for 10,000 funeral homes, according to Reggie. But he wants to see major growth by the end of 2019. “Our goal is, of course, all 19,000 funeral homes in America,” Reggie said.
Reggie and his eight employees compile prices by taking advantage of the Funeral Rule. The rule, which the Federal Trade Commission put into effect in 1984, entitles consumers to a price list from a funeral home over the phone or in person, among other regulations.
Funeralocity workers cold call or even sometimes visit funeral homes and request the general price list. The team then compresses those prices into “packages,” based on traditional consumer requests, like full traditional burial services or direct cremation.
But Reggie knows his website has been controversial in the funeral home industry. Some homes have even sent Reggie letters from their attorneys. Reggie maintains that what he’s doing is completely fair and promotes competition.
“Some will say, it’s a race to the bottom you’re promoting. And I say, has the bottom come to automobiles? Has the bottom come to real estate?” Reggie said. “It doesn’t come anywhere.”
But Walker Posey, spokesperson for the National Association of Funeral Directors, says that the problem with online pricing has more to do with difficulty communicating value.
“It’s very difficult in a service-based business to show the difference in what you’re providing in a price,” Posey said.
Posey said some homes might be able to do innovative things, like add videos or interactive tools to their website, to better explain how their prices relate to the quality of their services. But he said that can become expensive, especially for local, family-owned funeral homes.
Joshua Slocum, director of the Funeral Consumer Alliance, a consumer advocacy group, said customers are entitled to access to pricing online, which in turn forces vendors to compete. In fact, the alliance and the Consumer Federation of America are asking the Federal Trade Commission to require funeral homes to disclose full general price lists online.
“Funeral directors have had a very, very easy ride,” Slocum said. “Most of their customers come in a blank canvas. They don’t know what the competition is charging.’’ Such companies, he said, “can’t keep living in 1950 forever.”
Reggie’s solution: list every funeral home in his 100 metro markets on the site with brochure pricing. If a service provider wants to add photos, videos, descriptions and reviews, they must pay a fee to join Funeralocity’s Excellence Program. Providers that pay the fee and meet Funeralocity’s vetting standards promise to give a 5 percent discount to Funeralocity users. Listings for Excellence members are pushed to the top of the page.
Visitors use the site for free.
“We plan to be the ultimate source of funeral costs in America,” Reggie said. He declined to disclose revenue numbers for the site.
In the future, Funeralocity plans to work with funeral insurance companies to market their products.
But many funeral homes are in no hurry to join the digital age. That was the experience of Parting.com, which launched in 2015.
“A funeral home was used to sitting in front of somebody, used to getting that face-to-face meeting, used to having 30 minutes to really convey and show what their value is,” said Tyler Yamasaki, one of Parting.com’s founders.
As a result, working in the digital space with funeral homes was so complicated that Parting switched its business to creating and selling software for mortuaries. Parting’s website remains live but is no longer updated by the team.
Reggie, a serial entrepreneur who lives in Miami, is the founder and managing director of Future Factory, a New Orleans venture capital corporation. Future Factory owns and funds Funeralocity. Before starting Funeralocity, Reggie served as chairman of the board of Future Factory-owned GuideStar Research, which worked with research leadership to “grow a fully operational and fiscally sound clinical research enterprise,” according to Future Factory. Reggie sold the company in 2018.
Founder/CEO: Ed Michael Reggie
Based in: New Orleans/Miami
Funeral homes covered: 10,000
Parent company: Future Factory