Do You REALLY Own Your Market Share? A Guide for Monument Companies.

A Calculation That Will Literally Rock Your World!

Everyone who operates a business has both a market and a market share. A market is a group of potential consumers who have a need or a desire for your goods or services. A market share is the consumers in that market who choose to purchase from you.

In other words, it is your share of the market that you serve.

But…how does a business actually know what their market share is? And, more importantly, why does it even matter?

Why Market Share Matters

Knowing exactly where your business stands in the market(s) you serve is invaluable information that can help you build a more profitable future.

Get this…..

According to the National Funeral Director’s Association (NFDA), the US Cremation Rate is expected to be 80% by the year 2045.

If you operate in the death care business, that statistic simply cannot be ignored.

Is it a scare tactic? Nope. It’s reality.

And this rise in cremation rate signals an inevitable change in your business’s market share that you must be prepared for.

How Cremation Impacts Your Market Share

The change in cremation rates directly reflect a change in your market’s attitude toward death and final disposition.

A significant change in consumer attitude also signals a change in consumer buying trends that will impact your bottom line.

When hints of a change in consumer trends first hit, it is common for many to simply react with knee-jerk decisions. They may use the SWAG (some wild-ass guess) method to make business decisions and ultimately set themselves up for failure.

Don’t be trapped into that!

Instead, make educated and calculated decisions based on your financial data and market share to help guide your results.

Doing this will better equip you to make decisions such as the following:

• Whether or not you need to invest in additional manufacturing capacity
• If you need to add additional process automations
• Whether or not you are over-spending on marketing
• Help quantify any additional opportunities in your market
• Understand when it is time to move into a new market
• Acknowledge when it is time to exit a market
• And so much more!

Let’s Dig Deeper

The first step to understanding your market share is to know who your market is.

The big problem is that everybody eventually dies. Therefore, it is easy for us to assume that our market is everybody.

But….that thinking is flawed.

Why?

Because everybody dies….eventually.

But we don’t care about eventual deaths.

We care about the deaths that will impact our business today, tomorrow and the next 12-14 months.

So how do we estimate the total market that will want or need of our products? And, even more importantly, how do we calculate our slice of that market?

Ask any memorialist about the population(s) they serve and they will provide information such as the locations, ethnicities, religions and social preferences that are represented in their area(s).

While knowing this information and having a geographic boundary is great, it offers very little in the way of providing data about your business’s actual market share.

Finding Reliable Data

The memorial industry is a small, niche industry that is often not statistically tracked. This lack of statistical information leaves the memorialist to “fend for themselves” when it comes to gathering reliable data.

That is okay, because, as memorialists, we are used to rolling up our sleeves and putting in the work, right?!

So, let’s get started and learn how to find the reliable data we need and clearly define our market.

Defining our Market

To get started, we will take a methodical approach and broadly define our market’s geographical area.

For example, let’s say I service all of Dallas County, Texas. Now, I may set a monument here or there outside of Dallas County, but let’s suppose the majority of my business is in Dallas County.

Step 1: Population

The first step I need to take is knowing the total population of the county I serve.

I can take the lazy way out and accomplish this by Googling “Population of Dallas County, Texas”.

But I am not certain I can rely on the accuracy of Google’s information.

Instead, I will opt for a more reliable source and will go straight to the US Census Bureau.

From there, I am taken to a page that allows me to drill down and find the population of any market I serve or hope to serve. The screen shot below shows the menu that allows me to drill down to my geographical area.

I start by selecting Texas.

Then I click a link that will allow me to drill down to county and city population data sets.

Because I am using Dallas County, Texas, as my example, I will use the filters to find the profile information I am searching for.

Here I see that the population for Dallas County, Texas, is 2,613,539. This is my general market.

But not all of those people are going to pass away any time soon. So now I need to calculate my actual, potential market.

To do that, I need to know my area’s death rate.

Step 2: Death Rate

The death rate is the ratio of deaths to population for a defined period of time. And, lucky for us, the death rate is statistically tracked and published by The Centers for Disease Control (CDC).

Of course, in order to find the death rate specific to Dallas County, Texas, I need to drill down to the state level as opposed to the national level. I do this by following this link. The screen shot below shows where I found the information.

This chart shows that the death rate for Texas is 906.4 deaths per 100,000 population for Texas, or .009064%.

Step 3: Start Calculating

So, I have my population and I have my death rate. Now I am ready to calculate my actual market.

The first thing I am going to do is estimate the number of deaths per year in my county. To do this, I will take the Dallas County population of 2,613,539 (taken from step 1) and multiply it by .009064 (taken from step 2) to arrive at 23,689, my estimated, annual, at-need market.

2,613,539 (population) x .009064 (death rate) = 23,689

In other words, I expect my market to experience the loss of 23,689 people that will potentially need a permanent memorial.

But Then…Cremation

Of course, not everyone who passes actually needs or wants a headstone- they are excluded from my market. But how do I scientifically identify those individuals?

Fortunate for us, the death care industry tracks the cremation rate. The industry also provides statistics on the number of cremations utilizing burial as the final disposition.

Step 4: The Cremation Rate

Before I can take cremation into consideration, I need to know my market’s cremation rate.

The very first thing I do to access accurate cremation data is visit the Cremation Association of North America CANA website. This organization performs an annual comprehensive statistical study on cremation rates in North America. Their findings are easy to use and extremely helpful.

When I go to the CANA website, I see that Texas is not listed on the free information. That’s okay, though. They show the top and bottom states for cremation and it is safe to assume all states not listed fall somewhere in the middle.

So I will choose to use the general cremation rate for my state using the map below.

You will see that Texas is highlighted in yellow on the CANA map and the key shows the yellow state cremation rate is 51% – 60%. For purposes of my calculation, I will choose to be conservative and use 60%.

This means approximately 60% of our 23,689 Dallas County, TX, deaths will likely choose cremation.

A little quick math tells me this:

23,689 x 60% = 14,213 people being choosing cremation

23,689 – 14,213 = 9,476 choosing traditional burial

According to the National Funeral Director’s Association (NFDA), approximately 31.7% of people choosing cremation would also like to have their ashes buried.

14,213 choosing cremation x 31.7% choosing to have ashes buried = 4,505

4,505 (cremated and buried) + 9,476 (traditionally buried) = 13,981 potential market

Considerations

Of course, there are many things to consider here. Those considerations include:

• People who have passed (whether they are buried or cremated) and already have a memorial
• People who pass and will not purchase a headstone for one reason or another
• People who pass and their bodies are going elsewhere

Other considerations include those that already have pre-need memorials, memorials for people who passed elsewhere but were buried in Dallas County, and people who passed in a different year who are just now getting a memorial.

Depending on the area you serve, you may need to further calculate your actual, potential market. For example, if you primarily serve a specific ethnic, religious or other group, you will need to define the population of that group and include it in your calculation.

But, to keep things simple, I use the calculated 13,981 as my estimated market.

Defining Our Market Share

Now that we know the estimated size of our actual market, the next step is to calculate our estimated market share.

Step 1: Know Your Sales

Knowing your revenue figures is important. But, for purposes of calculating market share, we are less focused on revenues and more focused on actual units sold in a given period of time.

For most monument companies, knowing the number of memorials sold in a specific area each year is incredibly difficult. It is also incredibly crucial. Arriving at the number of units sold may involve downloading data from your accounting program, design program or other order management software.

If you are simply unable to track down this information, you can estimate. So, let’s say we estimate to make 2500 memorial units per year in our market.

Step 2: Calculate Your Share

A little simple math tells us that, if our potential market is 13,981 memorial units, and we sold 2500 memorial units, we have an estimated market share of 18% in Dallas County, TX.

Using Your Market Share Calculation

Knowing we have 18% market share in the Dallas County market is fine…but, in order for it to be useful, we have to know how to apply it.

What this tells me is that I still have 82% of the market that is choosing to go elsewhere. But where are they going and how do I persuade them to use me?

Update: Click here to read all about applying the market share calculation to your business decision-making process.

Do The Work!

Now it is YOUR turn to calculate your market share. You can read through this tutorial for step by step instructions to estimate your market share. But, as a busy business owner or manager, you know you don’t have time for that! Save time and get organized by purchasing my easy-to-use Market Share Estimating Spreadsheet.

This spreadsheet features links that take you straight to the CANA statistics, Census Bureau and more! And, to make things EVEN EASIER, it is pre-formulated so all you have to do is enter the data and enjoy instant calculations.

Yes, you can do it yourself…but will you?

My spreadsheet is only $30…you’ll spend more than $30 in time just setting the spreadsheet up! Click here and save yourself some time now!