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.
But funeral homes may not be ready for the digital market.
Ed Michael Reggie, a serial entrepreneur and Miami resident, first came up with the idea for his venture into the funeral industry a few years ago. He said that a colleague of his 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,” said Reggie, 63. “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, 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.
A predecessor to Funeralocity, Parting.com, found the same problem. One of its founders, Tyler Yamasaki, said that the digital world is still new to funeral homes, which complicates effective online pricing.
“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,” Yamasaki said.
Yamasaki said that he and the other executives switched to creating and selling software for funeral homes to transition into the digital age. Parting remains a website but is no longer actively updated by the team.
Yamasaki said the transaction between his site and consumers looking for funeral homes was too messy, comparing it to running a Hotels.com while the Hilton and Marriott chains would theoretically rely on pen and paper.
Joshua Slocum, director of the Funeral Consumer Alliance, which advocates for the consumer in the funeral home industry, said customers are entitled to access online pricing to shop around and force vendors to compete for their business. 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.
“They can’t keep living in 1950 forever,” he added.
Reggie may have a solution, but it comes at a price for their homes. Funeral homes that want to boost their standing on the site by adding pictures, videos, descriptions and reviews, can apply to Funeralocity’s excellence program, a fee-based service.
Funeralocity vets the funeral homes, Reggie said. In exchange for stronger control of their appearance on the website, homes grant a 5 percent discount to Funeralocity customers, who use the website for free.
Funeralocity’s fees to the homes are based on the number of customers they gain through Funeralocity. The program is the site’s only source of revenue, but Reggie said he is building a revenue source with funeral insurance.
Reggie, 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. Reggie declined to disclose revenue numbers for the site.
“We plan to be the ultimate source of funeral costs in America,” Reggie said.
Founder/CEO: Ed Michael Reggie
Founded in: 2017
Based in: New Orleans/Miami
Funeral homes covered: 10,000
Parent company: Future Factory