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Reputation is key. As you touched upon, nothing short of hearing from others what they went through helps as much.
Like you said, a lot of people wait until they need the service before they think about it. This is usually at the worst time in a person's life, so emotions are high. It's best to, at minimum, think about what you would want to have done ahead of time. At the last place I worked, I specialized in helping people pre-arrange services. The whole idea is to put your wishes down so it's one less thing for your family to worry about. I personally preferred it since it was a much lower pressure situation since no one had to purchase anything at the time, unless they chose to pre-pay, which is strictly optional.
I've always looked for directors that are honest (duh) and forthcoming to families on what things are without pushing higher end items. For example, explain the difference of a sealer casket vs an unsealed casket, without using emotional language like: "you don't want mom drowning in water, right?" Barring not knowing anyone that can give you a recommendation, Google and Yelp are your best friends. It just takes a bit of forethought and looking at what the reviewer is saying. We all have seen the insane reviews that don't have any bearing in reality.