Service Corporation International (NYSE:SCI) Q4 2022 Earnings Call Transcript

And how much of it stays because it’s our market share gain or it’s the baby boomers beginning to impact the projection. So the most of it I think we’d identified before. You’re right, there’s a little bit excess deaths still in that 2023 projection, but not as much as we saw in 2022 or as much as we saw in 2021.

John Ransom: Well, I mean, it’s kind of remarkable because you would also add in the higher interest expense, which wouldn’t have been contemplated. So it’s really the base is even a little better than that. Okay. And then just a squishy question on the consumer, I mean, preneed cemetery is the ultimate fairly large ticket item that can be deferred. So are you seeing kind of as you went through 2022 with the ebbs and flows of the stock market. And 2023, you mentioned the lower end consumer some changes. But what are you seeing in your core kind of 73-year old boomer relatively affluent? When you approach him or her about a preneed big ticket preneed cemetery, what are you seeing in terms of behavior changes, if any, from the peak?

Thomas Ryan: I’d say generally, John, seeing very favorable I mean, we’re still seeing good stuff at the high end. We’re seeing good stuff in generally in the core and you touched upon it. I’d say we’re still seeing a kind of that lower entry point sale a little more difficulty in getting people to, like you said, sign on the guideline versus defer. So that segment continues to be a little bit challenging. But I think by the results you’re seeing, we’re overcoming it with a lot of other things, which are more plentiful leads, more effective leads as we take these marketing leads and have learnings and be able to test. So €“ and then leveraging the utilization of our technology to enhance kind of real-time training and productivity.

So I think a lot of this we’re overcoming and still feel very strong about it. And my thought is if we don’t enter into a recession and inflation begins to tamper back down, we’ll see that customer come back and feel really good about back half of 2023 and particularly as we get into 2024.

John Ransom: Yes. And then you’ve touched in the past on sales productivity. So in short, you’re selling more stuff with fewer people, but you have like, again, take a point in time 2019 maybe is our pre baseline. What’s the useful way just to think about the average productivity for salesperson today versus pre-COVID? And how much of that would you say is just using more modern tools like contact management and moving inventory online and streamlining your product flows versus just good old-fashioned kind of more rigorous kind of top-down management? And that’s it for me. Thank you.

Thomas Ryan: Fair, John. So as far as headcount of salespeople, I’d say we’re down about 300 to 400 headcount from 2019 pre-COVID. And if you look at the productivity, I think I referenced we’re 28% higher than we were back then. So we’re able to be 28% higher with, call it, 7% to 8% less headcount. So quite a bit of efficiency. I would tell you that quite a bit of that, the majority of that is probably being able to leverage the tools we’ve invested in, be it Beacon, be it Salesforce and the way we utilize those things. And then combining that with I think the marketing leads growth, if you look at the lead sources, we’ve had the traditional channels that generally follow a pretty predictable pattern and the real increase in leases went through the digital leads and the marketing leads and those have become more plentiful and more effective.