Service Corporation International (SCI): Business Model Canvas [10-2024 Updated]
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Service Corporation International (SCI) Bundle
Discover the innovative Business Model Canvas of Service Corporation International (SCI), a leader in the deathcare industry. This framework highlights how SCI effectively navigates its complex landscape through strategic partnerships, critical activities, and a commitment to customer service. From personalized funeral services to extensive cemetery management, SCI's model is designed to meet the diverse needs of families and communities. Dive deeper to explore each component and understand how SCI maintains its position as a trusted provider in a sensitive market.
Service Corporation International (SCI) - Business Model: Key Partnerships
Collaboration with independent investment managers
Service Corporation International (SCI) collaborates with independent investment managers to oversee their substantial trust investments. As of September 30, 2024, the total value of trust investments at market was approximately $7.15 billion. This collaboration is crucial for managing the funds collected from preneed contracts, which amounted to $1.06 billion in net preneed contract sales for the nine months ended September 30, 2024.
Partnerships with insurance companies for preneed contracts
SCI has established partnerships with various insurance companies to facilitate preneed insurance contracts. For the three months ended September 30, 2024, the sales production from preneed insurance-funded contracts was $174.4 million, with a total of 29,127 contracts sold. These partnerships are essential for enhancing the company's revenue streams while providing customers with options for funding their future funeral expenses.
Relationships with funeral service suppliers and vendors
SCI maintains extensive relationships with suppliers and vendors in the funeral service industry, which is vital for operational efficiency. The company reported consolidated funeral revenue of $1.74 billion for the nine months ended September 30, 2024, reflecting a slight increase from $1.73 billion for the same period in 2023. These relationships help ensure a consistent supply of products and services necessary for funeral operations, contributing to their overall gross profit of $784.8 million for the same period.
Engagements with local communities and organizations
Engagement with local communities is a key aspect of SCI's business model. The company actively participates in community events and supports local organizations, which enhances its brand reputation and customer loyalty. For instance, SCI's revenue from external customers in the United States was approximately $2.93 billion for the nine months ended September 30, 2024. Such local engagements not only help in building relationships but also contribute to the overall growth and sustainability of their operations.
| Partnership Type | Description | Financial Impact (2024) |
|---|---|---|
| Independent Investment Managers | Management of trust investments for preneed contracts | $7.15 billion in trust investments |
| Insurance Companies | Facilitation of preneed insurance contracts | $174.4 million in sales production (Q3 2024) |
| Funeral Service Suppliers | Supply of products and services for funeral operations | $1.74 billion in consolidated funeral revenue (9M 2024) |
| Local Communities | Engagement in community events and support | $2.93 billion in revenue from U.S. customers (9M 2024) |
Service Corporation International (SCI) - Business Model: Key Activities
Providing funeral services and merchandise
Service Corporation International (SCI) reported consolidated funeral revenue of $1,736.5 million for the nine months ended September 30, 2024, compared to $1,729.9 million for the same period in 2023. The increase of $6.6 million is primarily attributable to a $15.8 million growth in revenue from newly constructed and acquired properties, despite a $6.4 million decrease in comparable revenue.
During the same period, the comparable funeral gross profit decreased by $34.6 million, or 9.2%, from $374.8 million to $340.2 million. This decline was largely due to a decrease in comparable funeral gross profit percentage from 21.8% to 19.7%.
The average revenue per funeral service performed was $5,653 for the nine months ended September 30, 2024.
Managing cemetery operations and maintenance
For the nine months ended September 30, 2024, consolidated cemetery revenue was $1,356.9 million, up from $1,314.1 million in 2023, representing a growth of 3.3%. The increase was driven by a $33.1 million rise in comparable cemetery revenue, along with a $10.7 million increase from newly constructed and acquired properties.
The cemetery gross profit increased by $15.1 million year-over-year, from $429.5 million to $444.6 million, reflecting a slight increase in gross profit percentage from 32.8% to 32.6%.
Executing preneed contracts and trust fund management
In the nine months ended September 30, 2024, SCI recognized trust fund income related to preneed trust investments of $134.3 million, compared to $121.3 million for the same period in 2023. The trust fund income for cemetery perpetual care trust investments was $73.5 million, up from $63.5 million.
SCI's preneed sales production for the nine months reached $1,061.5 million, with 548,900 contracts sold. The company also reported a net investment gain of $453.9 million during this period, contributing to the overall financial strength and stability of the preneed trust accounts.
Conducting strategic acquisitions of funeral homes and cemeteries
During the nine months ended September 30, 2024, SCI spent $164.2 million on business acquisitions, which included $123.4 million for the acquisition of 10 funeral homes and 2 cemeteries. The acquisitions aimed to enhance SCI's network footprint, enabling service to complementary areas and bolstering the preneed backlog of deferred revenues.
The fair values of the assets acquired included $49.9 million in property and equipment and $72.7 million in goodwill, with $60.1 million in deferred revenue and receipts held in trust.
| Key Metrics | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Consolidated Funeral Revenue | $1,736.5 million | $1,729.9 million | $6.6 million |
| Consolidated Cemetery Revenue | $1,356.9 million | $1,314.1 million | $42.8 million |
| Trust Fund Income (Preneed) | $134.3 million | $121.3 million | $13.0 million |
| Trust Fund Income (Cemetery) | $73.5 million | $63.5 million | $10.0 million |
| Acquisition Spending | $164.2 million | $72.5 million | $91.7 million |
Service Corporation International (SCI) - Business Model: Key Resources
Extensive network of 1,495 funeral service locations
As of September 30, 2024, Service Corporation International (SCI) operates a broad network of 1,495 funeral service locations across North America. This extensive footprint allows SCI to provide localized services to families, enhancing accessibility and community engagement.
Ownership of 494 cemeteries across North America
SCI's operational capacity is further bolstered by its ownership of 494 cemeteries. This significant asset base not only diversifies SCI's service offerings but also establishes a strong market position in the cemetery services sector. The revenue from cemetery operations was reported at $1,356.9 million for the nine months ended September 30, 2024, reflecting a 3.3% increase compared to the previous year .
Trust funds exceeding $5.2 billion for preneed contracts
SCI maintains trust funds that exceed $5.2 billion dedicated to preneed contracts. These funds are crucial for financial stability and customer trust, ensuring that funds are available to cover future services. The preneed contract sales for the nine months ended September 30, 2024, reached $1,061.5 million, underscoring the significance of these financial resources .
Skilled workforce trained in customer service and care
SCI employs a skilled workforce trained extensively in customer service and care. This human resource is vital for maintaining high service standards and emotional support for families during difficult times. The company emphasizes ongoing training and development, which is reflected in customer satisfaction metrics and service delivery quality.
| Key Resource | Details |
|---|---|
| Funeral Service Locations | 1,495 locations across North America |
| Cemeteries Owned | 494 cemeteries |
| Trust Funds | Exceeding $5.2 billion for preneed contracts |
| Cemetery Revenue | $1,356.9 million for nine months ended September 30, 2024 |
| Preneed Contract Sales | $1,061.5 million for nine months ended September 30, 2024 |
Service Corporation International (SCI) - Business Model: Value Propositions
Comprehensive deathcare services tailored to client needs
Service Corporation International (SCI) offers a full range of deathcare services that are designed to meet the specific needs of its clients. In 2024, SCI reported consolidated funeral revenue of $1,736.5 million for the nine months ended September 30, an increase from $1,729.9 million in the same period in 2023. This growth is indicative of SCI's ability to tailor its services effectively to meet diverse customer needs.
Dignity Memorial® brand ensuring quality and compassion
The Dignity Memorial® brand represents SCI's commitment to providing high-quality funeral and memorial services with compassion. This brand is recognized across North America, emphasizing the company's dedication to customer care. In the third quarter of 2024, SCI reported an adjusted comparable funeral revenue of $477.7 million, showing a slight increase from $472.8 million in the same quarter of 2023.
Financial stability through preneed sales and trust fund management
SCI's financial stability is bolstered by its preneed sales model and effective trust fund management. For the nine months ended September 30, 2024, the company recognized trust fund income related to preneed trust investments of $134.3 million, up from $121.3 million in 2023. Preneed insurance-funded sales production for the same period reached $548.9 million, a slight increase from $537.4 million in 2023. This model not only provides a steady revenue stream but also enhances customer trust and loyalty.
Wide range of customizable funeral and memorialization options
SCI provides an extensive array of customizable options for funeral and memorial services, catering to various cultural and personal preferences. The company reported a comparable average revenue per service of $5,653 for the nine months ended September 30, 2024, compared to $5,515 in the previous year, reflecting the value added through these customizable offerings.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Consolidated Funeral Revenue | $1,736.5 million | $1,729.9 million | +0.4% |
| Adjusted Comparable Funeral Revenue | $1,479.8 million | $1,474.0 million | +0.4% |
| Average Revenue per Service | $5,653 | $5,515 | +2.5% |
| Preneed Trust Fund Income | $134.3 million | $121.3 million | +10.3% |
| Preneed Insurance-Funded Sales Production | $548.9 million | $537.4 million | +2.8% |
Service Corporation International (SCI) - Business Model: Customer Relationships
Personalized service for families during difficult times
Service Corporation International (SCI) prioritizes personalized service, particularly during the emotional and challenging times families face. In 2024, the company reported a consolidated funeral revenue of $1,736.5 million for the nine months ended September 30, compared to $1,729.9 million for the same period in 2023. This demonstrates their commitment to delivering compassionate and tailored services to their clients.
Ongoing support through preneed planning and consultations
SCI emphasizes ongoing support via preneed planning, which allows families to make arrangements ahead of time. In the nine months ending September 30, 2024, the company recorded $1,061.5 million in net preneed contract sales. This reflects a significant engagement with families looking to alleviate future burdens and ensure their wishes are honored.
| Financial Metric | 2024 | 2023 |
|---|---|---|
| Net Preneed Contract Sales | $1,061.5 million | $1,098.8 million |
| Maturities (number of contracts) | 48,671 | 47,202 |
| Sales Production (number of contracts) | 89,050 | 87,128 |
Community engagement initiatives enhancing brand loyalty
SCI actively participates in community engagement initiatives, which enhance brand loyalty and strengthen relationships with clients. The company reported a 3.3% increase in consolidated cemetery revenue, reaching $1,356.9 million for the nine months ended September 30, 2024, compared to $1,314.1 million in 2023. Such initiatives help establish trust and a sense of belonging within the communities they serve.
Feedback mechanisms for continuous service improvement
To ensure continuous improvement in service delivery, SCI employs various feedback mechanisms. In 2024, the company noted a 9.2% decrease in consolidated funeral gross profit, totaling $340.2 million for the nine months ended September 30. This feedback informs operational adjustments and enhances service quality, demonstrating SCI's commitment to listening to customer needs and adapting accordingly.
Service Corporation International (SCI) - Business Model: Channels
Direct sales through funeral service locations
Service Corporation International (SCI) operates a network of over 2,000 funeral service locations across North America. For the three months ended September 30, 2024, SCI reported consolidated funeral revenue of $566.0 million, a slight increase from $554.8 million in the same period in 2023. The comparable funeral revenue for the same period was $556.9 million, up from $549.9 million in 2023, reflecting a 1.3% growth. The average revenue per service increased to $5,700 from $5,597 year-over-year.
Online platforms for preneed arrangements and information
SCI has developed an online platform that allows customers to make preneed arrangements and access information regarding services. For the nine months ended September 30, 2024, the sales production for preneed insurance-funded contracts was $548.9 million, compared to $537.4 million in the same period in 2023. Additionally, preneed trust-funded sales production reached $391.3 million, down from $418.2 million in 2023.
Partnerships with insurance agents for preneed contracts
SCI collaborates with insurance agents to promote preneed funeral contracts. In the third quarter of 2024, general agency revenue from these partnerships reached $59.3 million, up from $49.0 million in the same period in 2023. The number of preneed insurance contracts sold also increased, with 29,127 contracts sold in Q3 2024, compared to 28,284 contracts in Q3 2023.
Marketing through local community events and outreach
SCI engages in local community events and outreach programs to build brand awareness and connect with potential customers. The company’s efforts in marketing have contributed to the overall increase in funeral revenue, with consolidated funeral gross profit reported at $107.9 million for the three months ended September 30, 2024, compared to $109.7 million in 2023.
| Channel Type | Revenue (Q3 2024) | Revenue (Q3 2023) | Growth Rate | Notes |
|---|---|---|---|---|
| Direct Sales | $566.0 million | $554.8 million | 1.3% | Increase driven by acquisitions and new constructions |
| Online Platforms | $548.9 million (preneed insurance) | $537.4 million | 2.8% | Growth in online preneed arrangements |
| Partnerships with Insurance Agents | $59.3 million | $49.0 million | 20.8% | Increase in general agency revenue |
| Community Marketing | $107.9 million (gross profit) | $109.7 million | -1.6% | Efforts in outreach and community events |
Service Corporation International (SCI) - Business Model: Customer Segments
Families in need of immediate funeral services
Service Corporation International (SCI) serves families requiring immediate funeral services, typically in times of grief and loss. In the third quarter of 2024, SCI reported consolidated funeral revenue of $566.0 million, reflecting an increase from $554.8 million in the same period of 2023 . This increase is indicative of the demand for at-need services, which often arise unexpectedly.
Individuals planning for future funeral arrangements
SCI also targets individuals planning ahead for their funeral arrangements. The company reported a backlog of trust-funded deferred revenue of $7.70 billion as of September 30, 2024. This figure underscores the significance of pre-need services, allowing customers to secure their future arrangements and financial planning.
Insurance policyholders seeking funeral funding options
Another critical customer segment includes insurance policyholders looking for funeral funding options. For the nine months ended September 30, 2024, SCI recognized $134.3 million in trust fund income related to preneed trust investments . Additionally, the total insurance-funded revenue backlog was recorded at $8.29 billion, indicating strong demand for insurance-backed funeral services.
Communities requiring cemetery services and memorialization
SCI also serves communities that require cemetery services and memorialization. The consolidated cemetery revenue for the nine months ended September 30, 2024, amounted to $1.36 billion, a 3.3% increase compared to the prior year . This growth reflects an ongoing need for cemetery services, including memorialization and care, which are central to community needs.
| Customer Segment | Revenue (Q3 2024) | Backlog (September 2024) | Growth Rate |
|---|---|---|---|
| Immediate Funeral Services | $566.0 million | N/A | 2.1% |
| Future Funeral Arrangements | N/A | $7.70 billion | N/A |
| Insurance Policyholders | N/A | $8.29 billion | N/A |
| Cemetery Services | $1.36 billion | N/A | 3.3% |
Service Corporation International (SCI) - Business Model: Cost Structure
Operating costs for funeral homes and cemeteries
The operating costs for funeral homes and cemeteries for the nine months ended September 30, 2024, totaled $2,308.6 million, which includes costs of service and overhead expenses. The costs of service amounted to $706.6 million, while overhead and other expenses accounted for $807.8 million.
Marketing and advertising expenses for brand promotion
Marketing and advertising expenses were included within the broader category of corporate general and administrative expenses, which were $124.1 million for the nine months ended September 30, 2024.
Administrative expenses including salaries and benefits
Administrative expenses, which encompass salaries and benefits, were a significant part of the corporate general and administrative expenses. For the nine months ended September 30, 2024, these expenses reached $124.1 million, an increase from $112.3 million in the same period of 2023.
Investment management fees for trust funds
Investment management fees related to trust fund investments generated recognized income of $134.3 million and $73.5 million for preneed trust investments and cemetery perpetual care trust investments, respectively, for the nine months ended September 30, 2024.
| Cost Category | Amount (in millions) |
|---|---|
| Operating Costs for Funeral Homes and Cemeteries | $2,308.6 |
| Marketing and Advertising Expenses | $124.1 |
| Administrative Expenses (Salaries and Benefits) | $124.1 |
| Investment Management Fees (Preneed Trust) | $134.3 |
| Investment Management Fees (Cemetery Trust) | $73.5 |
Service Corporation International (SCI) - Business Model: Revenue Streams
Revenue from atneed and preneed funeral services
For the nine months ended September 30, 2024, consolidated revenue from funeral operations was $1,736.5 million, compared to $1,729.9 million for the same period in 2023. This reflects an increase of $6.6 million. The comparable revenue from funeral operations was $1,714.2 million for the nine months ended September 30, 2024, down from $1,720.6 million in 2023, indicating a decrease of $6.4 million.
Sales from cemetery property and interment rights
Consolidated revenue from cemetery operations for the nine months ended September 30, 2024, was $1,356.9 million, an increase from $1,314.1 million in 2023, representing a growth of $42.8 million. The comparable cemetery revenue increased by $33.1 million, or 2.5%, primarily due to an increase in comparable cemetery core revenue.
Income from investment earnings on trust funds
For the nine months ended September 30, 2024, recognized trust fund income (realized and unrealized) related to preneed trust investments was $134.3 million, compared to $121.3 million for the same period in 2023. Additionally, income from cemetery perpetual care trust investments was $73.5 million for the nine months ended September 30, 2024, up from $63.5 million in 2023.
Commissions from insurance-funded preneed contracts
In the nine months ended September 30, 2024, sales production from insurance-funded preneed contracts was $548.9 million, a slight increase from $537.4 million in the same period of the previous year. General agency revenue increased to $163.3 million from $139.8 million in 2023, reflecting a growth of $23.5 million.
| Revenue Stream | 2024 (in millions) | 2023 (in millions) | Change (in millions) |
|---|---|---|---|
| Funeral Operations Revenue | $1,736.5 | $1,729.9 | $6.6 |
| Cemetery Operations Revenue | $1,356.9 | $1,314.1 | $42.8 |
| Preneed Trust Investments Income | $134.3 | $121.3 | $13.0 |
| Cemetery Perpetual Care Trust Income | $73.5 | $63.5 | $10.0 |
| Insurance-Funded Preneed Contracts Revenue | $548.9 | $537.4 | $11.5 |
| General Agency Revenue | $163.3 | $139.8 | $23.5 |
Article updated on 8 Nov 2024
Resources:
- Service Corporation International (SCI) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of Service Corporation International (SCI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Service Corporation International (SCI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.