Sadly, tragedy was the mother of invention for Mike Belsito. After helping plan his cousin’s funeral, he came up with eFuneral.com, a website that allows grieving families to comparison shop for funeral services. With co-founder Bryan Chaikin, Belsito recently expanded the Cleveland-based site from three test cities to a total of 11. (Nine of the 11 are in the top 15 metropolitan markets for funeral services, based on the team’s analysis of census figures.)
eFuneral’s biggest challenge is making inroads into the $12 billion to $13 billion funeral industry, one that has seen very little change in the past century. Belsito (pictured) recently shared some hard-won “lessons learned” with the Intuit Small Business Blog.
ISBB: What is the need that you’re working to address?
Belsito: Two years ago, when my cousin died unexpectedly, I helped plan the funeral. There were eight or nine funeral homes within a few miles of where we lived. I assumed there would be a website similar to Angie’s List that would help us to choose one that provided good service and fit our budget. There wasn’t. There were listings of funeral homes, but nothing else. Afterward, I checked out reviews on Yelp to choose a restaurant to go to dinner with my wife. It hit me — we had more information to make an informed decision about where we’d eat dinner (a $40 purchase) than we did to plan the funeral (which cost more than $10,000). So that’s what got the ball rolling.
The funeral industry is notorious for resisting innovation and transparency. How are you dealing with that?
Sometimes, I think entrepreneurs develop a product without actually knowing if it’s a solution to a problem. The big challenge is, you don’t know what you don’t know. The only way to learn is to launch your product and really listen and get that feedback from customers. Then you have to iterate.
We changed (our approach) once we began understanding what worked. Initially, our revenue model was to charge a transaction fee to the funeral home when a consumer purchased funeral services by way of our website. Now we’ve moved more toward a paid subscription model. We don’t charge to list a funeral home or its prices on our website, but a funeral home can opt for a premium membership, with the ability to upload photos and videos or use a feature that connects the consumer directly to the funeral home.
What’s the value proposition for the funeral home owners?
About 40 percent of people who pass away are being served at the time of death by a hospice. Families will ask hospice social workers for help, but ethically they aren’t allowed to make recommendations. They can’t say, “You should use XYZ funeral home.” But they can suggest [that] families go to eFuneral to do their comparison shopping. When they found out what we were doing, these social workers became our biggest champions. So it’s in the funeral home owners’ interest to work with us.
Weren’t funeral home owners resistant to the idea?
When we sit down face-to-face with funeral home owners, all we can do is try to show that we are genuinely trying to help them. True, not everybody wants to make this information widely available. But the FTC requires funeral homes to carry a price list, and when consumers ask, they’re supposed to be forthright. So we’re just making it public on the website. We believe that’s the right thing for customers and ultimately for the funeral home owners.
We’ve also been fortunate to participate in funeral industry publications, [which] has helped us build credibility. We serve as guest contributors, writing articles on topics like technology and marketing. Most funeral directors attend mortuary school, which isn’t that focused on business and marketing. Plus, we’re coming at it from a fresh perspective, and I think that’s appreciated.
How does the website work?
A family can simply browse public profiles of funeral homes to view general information, including pricing information and reviews. They can also choose any three funeral homes and compare them, apples-to-apples. They can look at who’s providing and what they’re charging.
We’re always looking for ways to provide more value, too. We have eFuneral featured offers, where we’re working with vendors on funeral-related goods and services to offer families exclusive deals on things like memorial stones and flowers, in order to offer more value for families.
But we don’t see eFuneral as being just about cost. We’re about to enable ratings and reviews, so families can leave comments. For some families cost isn’t the single most important factor. We don’t want to tell them where to go for the funeral. We just provide information so that they can make a more informed decision.
Knowing what you know now, is there anything you would’ve done differently for your cousin’s funeral?
I’ve learned that cost doesn’t necessarily correlate with quality. If one funeral home is charging more, it’s not necessarily offering a premium service.
It’s surprising that no one else has created a business like this. Funerals are a huge purchase.
There aren’t enough people like us who are trying to bring the change that’s needed in the business. It isn’t a sexy industry. Not a lot of 21-year-old web developers want to start a death-care internet startup.