Case Study: Should a Funeral Company Shift Its Business Model?

The slides were on the screen when Javier Montoya walked into the glass-walled conference room on the top floor of Monteverde Memorial Group’s headquarters. But the CEO did not look at them. Instead, he walked to the window and gazed out over MMG’s flagship memorial park. From this height, the visitors moving slowly among the gravestones were weaving a geometry of loss. One woman knelt and straightened a bouquet as carefully as if it were a portrait on a living room wall. Javier had long ago trained himself not to notice such details—or rather, not to be affected by them, focusing on occupancy rates and price points. It was the only way to run a business built around death. But lately, at age 76, Javier had started to notice again. Lucía Moreno, MMG’s head of strategy, stood by the screen, remote clicker in hand. Her counterparts in operations, finance, and sales sat in silence, waiting for Javier. He snapped out of his reverie and took his seat. “Let’s review where we are,” Lucía said, turning to the screen. Strategy sessions like this one were rare. The business was simple—and durable. People passed away, families wanted dignity, and MMG built parks with burial plots for Chile’s growing middle class. Even as religiosity in the country waned, the ritual remained. A final resting place mattered. During the Covid pandemic there had been months when Javier felt the parks were swallowing the city’s sorrow. Business boomed, but it was hard to celebrate. Javier had buried several contemporaries in his parks. With the worst over, he wanted to look to the future. The screen showed a map of Chile dotted with the company’s properties. Red circles marked areas where MMG had once planned to expand. “New development has slowed,” Lucía said. “Land is expensive. Permitting is taking longer than we had forecasted. We can still open new parks—but not at the pace we modeled five years ago.” She clicked forward. “We also face a cost challenge,” she continued. “Operating expenses are rising, with water as the driver. Drought used to be seasonal; now it’s structural. And in 24 months, new regulations will require us to upgrade parks with soil moisture sensors, automation, pressure management, leak detection, and other measures.” Javier shifted in his chair. A green resting place had always been part of MMG’s value proposition. Recently that vow was feeling much harder to keep. “There is another path,” Lucía said. “Cremation is a small market but is growing faster than burial. For us, that would mean concentrating our relationship with customers to a single transaction, shortly after the moment of death.” The CEO took in her comment. MMG’s enduring relationships with customers were the reason the parks had been able to justify investments in the past. Families returning to visit the graves of their loved ones meant recurring revenue in the form of maintenance, memorialization, and upgrades. At the far end of the table, the head of sales cleared her throat. “We should be honest about what we’re hearing from customers,” she said. “Even families who come in for plots are asking about cremation. If we don’t offer an option, they’ll go elsewhere.” Lucía nodded. “The risk,” she said, “is that cremation has tighter margins, about 35% net versus around 50% for burials. And it’s quickly commoditizing our industry. Independent crematories are proliferating, and differentiation is weak. Unless we can offer something compelling beyond convenience, we’ll be competing on price.” Javier was well aware of Chile’s growing cremation industry and was concerned about the trend. His distaste was partly doctrinal; as a devout Catholic, he believed that one’s final resting place should be in consecrated ground. It was partly personal; the idea of his body being incinerated unsettled him. And it was partly professional. Javier had spent his life building gardens. To him, a crematory was the opposite: industrial, sterile, placeless. Feeling all eyes on him, Javier spoke. “Investing in smart irrigation makes sense if people keep choosing burial, as parks are a central part of our offering,” he said. “However, if cremation becomes the default, we’ll have spent millions on a service fewer families want. And it’s a bet we can’t take back if it doesn’t pay off.” The Things That Change, the Things That Don’t The university campus sat on the outskirts of Santiago. A collection of low buildings, scattered trees, and students in hoodies, it was a different world than MMG’s headquarters. Javier had worn a suit out of habit and felt overdressed. María Torres met him at her office on the second floor of an aging social sciences building. She was brisk but warm, with the alertness of someone used to interviewing people in crisis. “I have to admit,” she said, “your email surprised me.” “Surprised that a CEO wrote to an anthropologist?” “Most executives ask for a summary. No one wants to see the raw material.” Javier gave a small smile and followed María to a conference table, where she had arranged three piles. “Before Covid,” she said, pointing to the first. Photos showed graves covered in flowers and small objects—stuffed animals, ribbons, handwritten letters sealed in plastic. “This is Rafael,” María said, motioning to a photo. “He visits his wife every Sunday and speaks to her—aloud. “For people like Rafael, the cemetery isn’t a service,” she explained. “It’s a home. An actual home was unattainable while his wife was alive. So a burial plot offers a sort of redemption, a permanent home where he can one day join her.” She pointed to another pile of photos and papers. “During Covid,” she said. One quote was highlighted in yellow: We didn’t say goodbye. We just received instructions. “That’s from a man whose mother died during lockdown. He couldn’t see her in the hospital, and the funeral was restricted. The priest wasn’t there. Death became administrative,” María said. “For many, Covid broke rituals. It shattered the belief that death is sacred, that it’s narratively coherent.” She nodded toward the third pile. “After Covid. This is where the shift accelerates.” She pointed to a picture of a table set for lunch. “Burial assumes permanence—of family, faith, place. But modern life is not permanent. Families are dispersed, people move. Belief is optional now.” She motioned to the materials again. “Cremation is not only a cost choice—it’s a meaning choice. It lets people end the story, allows them to grieve privately without committing to decades of upkeep.” Javier felt the word upkeep land heavily. That was MMG’s business. “Here’s the dilemma,” María said. “Cemeteries work best for families who want an ongoing relationship with those they lost. That group still exists, but that preference is no longer the default.” Javier gazed at the table, deep in thought. “Or,” he said, “we’re misreading a temporary shift as a permanent one.” He looked up at her. “People turned to cremation when Covid took away rituals. But life has normalized, and housing in most neighborhoods is becoming more expensive. Won’t they return to wanting a final resting place for their loved ones that they can visit?” The Possible Futures of Loss For Javier, a home-cooked meal with his son, Daniel, and his granddaughter, Sofía, was a Sunday tradition. The conversation between father and son often turned to MMG, including whether Daniel might take over someday. And lately Sofía had joined too, full of questions about the business of death. It wasn’t long before Javier broached the subject weighing on him. “I have a decision coming,” he said. “A big one.” Daniel didn’t look surprised. After finishing his MBA in Mexico, he had joined an innovation consultancy, and he enjoyed talking with his father about the business. “Is it the crematories?” He set down his fork. “I understand why you don’t like cremation, but I’ve always been uneasy with the cemetery obligation model.” Javier remained silent. “You sell a plot,” Daniel continued, “but for families who require financing you also sell decades of financial commitment. Some are pressured into services they can’t afford. Is that really helping them in their time of need?” “I don’t think families buy a plot,” Javier replied, his tone even but full of conviction. “They buy a place where they can stay connected—a home.” Daniel nodded once, accepting his father’s sincerity. “Papá, countless industries have gone through this shift. Banking used to be built on long-term relationships. Now it’s transactional—online, price-transparent. Healthcare, too. People used to have a family doctor for decades. Now it’s urgent care, telemedicine, convenience first.” Javier frowned. “And death?” “Death is becoming transactional,” Daniel said. “People want closure.” Javier looked down for a moment, finding himself holding back tears. “That may be true for some, and it’s sad,” he said quietly, “but not everyone. There are still families who want to remain connected—and the data shows that cremation is still a relatively small share of the industry.” “If cremation keeps growing, it doesn’t need to be a one-time transaction. You can design something more expansive, more differentiated.” Javier watched him carefully. “Like what?” “First,” Daniel said, “a visiting wall, which is becoming common in newer memorial parks. Urns are kept in them so that families and friends have a place to come to. Second, AI-assisted remembrance. Tools for connection built from photos, letters, and voice recordings—but fully opt-in, transparent.” Javier’s face tightened. “A chatbot.” “A memorial companion,” Daniel corrected gently. “Only if the family wants it. And finally, a new long-horizon option: cryogenic storage.” “Freezing people.” “Not a promise of revival, just possibility. People already think this way about technology. You can offer it ethically, with consent and boundaries.” Javier sat still, remembering the elaborate games his son invented as a child. Daniel was still so bright and creative, but even his adult visions were fanciful. It’s why Javier felt he couldn’t hand over the business and retire. “Ongoing service creates the potential for recurring revenue,” Daniel pointed out, “and does it without obligating families to pay for a plot they might not be able to afford. There’s lower up-front cost. A transparent contract. No implied theology.” Sofía cleared her throat. “Can I ask something?” Both men paused. She looked between Javier and Daniel. “Do people want to be remembered forever, or just not forgotten right away?” “That’s what I mean, papá,” Daniel said. “You’re making a decision that outlives you.” Then he stopped, embarrassed by his forthrightness. “I know that’s hard,” he added. Javier tried to respond but a lump caught in his throat. Instead, he smiled and said, “That’s a good question, mi Sofi, but let’s talk about you and save our business for another day.” The Experts Respond: Should Javier continue investing in burial parks or pivot to cremation? Jori Bolton John Fallon is a professor of practice at Northeastern University’s D’Amore-McKim School of Business, the former CEO of Pearson plc, and a coauthor of Resurgent. Javier should start up a cremation offering and keep offering burial services. Consumer preferences are changing, even if the pace of change is uncertain. I know how emotionally charged this advice is. I spent more than a decade leading Pearson, a company built around printed textbooks. In that time we went from selling 20 million physical books annually to fewer than 1 million, while also undergoing a digital transformation. Textbooks weren’t just products; they were symbols of rigor, permanence, and trust. Letting go of them felt, to some, like letting go of our soul. It wasn’t. But it did require separating what truly mattered—empowering people to learn—from the form our mission had previously taken. MMG is facing a similar moment of transition. In the early stages it is tempting to explain change as cyclical rather than structural. There is always a plausible story: The crisis will pass. Rituals will return. Customers will come back. But often they don’t. The right response is therefore to run in parallel both models that MMG is considering. Grieving families often arrive uncertain about what they want, and a company that can credibly offer burial and cremation—both done with the values that define MMG—will have an advantage. Javier should communicate clearly with employees about what is changing and why. He must explain that MMG’s purpose lies in providing not burial but dignity, ritual, and care, and that all of those can be delivered through cremation, particularly when paired with ancillary services like the ones Daniel describes. At Pearson, the mistake would have been to confuse selling physical books with empowering learning. For MMG, it would be to confuse building cemeteries with remembering a life of meaning. Financial discipline will be critical during this transition. MMG cannot avoid investing in its burial parks, and cremation services will take time to mature. Leadership must plan for a period in which capital is deployed ahead of revenue and margins are under pressure. Finally, Javier should, initially at least, lead this change himself. Whether Daniel or professional managers succeed him, the next generation must inherit a company that has already accepted the change—not one still debating it. Running two models now is the best way to prepare this family business for the future. Jori Bolton Artem Manilov is the founder and CEO of Tending, a subscription-based service for headstone restoration and grave maintenance. Javier should continue to invest in memorial parks rather than pivoting to cremation. Cremation is a low-margin, highly competitive business; pursuing it risks pulling management attention and capital away from a much larger—and more defensible—opportunity. I say this as someone who has spent nearly a decade building technology specifically for cemeteries and memorial businesses. From my vantage point, the real strategic question is not burial versus cremation. It is whether MMG is willing to modernize its core business. Demand for ground burial will persist. Religious families, traditional communities, and multigenerational households will keep choosing it, often for nonnegotiable cultural reasons. That demand may no longer be growing rapidly, but it is stable—and valuable. The mistake would be to assume that a mature market cannot be a source of growth. MMG’s goal shouldn’t be to expand the number of burial customers but to dramatically increase the lifetime value of those it already serves. Most cemeteries sell land, perform the burial, and collect a maintenance fee. From the family’s perspective, that is where the relationship largely ends. From the company’s perspective, that approach leaves enormous value untapped because loved ones want connection, reassurance, visibility, communication, and services that fit their digital lives. I launched my business because I believe customers will pay for the ability to remotely order grave and headstone maintenance, flowers, anniversary services, and restorations. For cemetery businesses like MMG, such options create recurring revenue streams layered on top of existing ones—without changing the core ritual. A technology partner can white label the platform, allowing MMG to continue to own the customer relationship, which Javier feels is important to the firm’s values. Investing in digital infrastructure also prepares the company for what comes next. In my view, Daniel’s vision is absolutely where the industry is headed. But AI-driven customer service, predictive maintenance, and, eventually, more-advanced digital memorialization—in the form of chatbots, personas, and even holograms—all depend on having direct digital relationships with families. This is where leadership matters. A transformation along these lines requires new talent, new skills, and a different way of thinking about service. Javier’s experience and moral authority are invaluable, but he does not need to personally design the future; he needs to create space for it. That may mean stepping back from day-to-day control and empowering a new generation—whether Daniel or professional managers—to modernize operations while preserving the company’s values. The funeral businesses that win in the next decade will not be the ones that abandon their core. They will be the ones that finally bring the rituals of death into the digital age. HBR’s fictionalized case studies present problems faced by leaders in real companies and offer solutions from experts. This one is based on the HBS case study “Parque del Sendero: Repositioning in the Death Care Industry in Chile” (case no. 525-064), by Jill Avery, Andres Cuneo, and Marco Bertini.

Case Study: Should a Funeral Company Shift Its Business Model?

Summary.

Partner Center