Thursday, 22 September 2011

Black and White

I had a great visit with two young gentlemen in the retail jewellery trade this week.  Both work in high-end stores, and both are concerned about the pesky competition we face from on-line diamond sales. 

Both Andrew and Matt have been in the industry long enough to have seen the client you dread.  The one who already bought the diamond or the ring on-line and now wants you to set their diamond or make a matching wedding band.  Once that ship has sailed, you can try to earn their long-term business, but there’s always that “burr in your craw” about the bigger sale that you didn’t get.

The answer to this problem does not lie in what you do with this customer now, but how to keep them from buying online in the first place.  It’s not necessarily the younger generation buying on-line; rather it’s just a whole new paradigm that has taken hold of modern individuals of all ages.

The new paradigm is all about Freedom of Information.  Don’t forget that most people have come through your store before deciding to buy on-line.  You had your chance, and blew it.  They felt that they might be missing out on something after leaving your store.

At one time, we elected officials and trusted that they would act earnestly on our behalf.  At one time, you’d visit a doctor and hang on his or her every word.  At one time, you would seek council from a sage car salesman for explanations of features and benefits of the car brands you were loyal to.

In today’s paradigm, we exercise our right to Freedom of Information.  It’s all there at our fingertips: the Kelly Blue Book (used car values), patient ratings of doctors, online medical self-diagnostic tools, parliamentary meeting minutes, Wiki-lieaks, and all kinds of consumer information websites.   These give your clients just enough information to be dangerous.

One way to combat this new paradigm is to fight fire with fire!  Almost 20 years ago now, we decided to increase our repair prices.  It felt risky because a sizing had been $12 for so long, and jumping it to $20 seemed drastic.  What did I do?  I took a really nice binder, and printed on fancy paper a shiny new repair price list.  When a client asked how much for 4 tips and a new half-shank, I just opened up the binder, ran my finger down the page and read-off the prices.  It was right there in black and white.  I didn’t REALLY have to look it up; I knew what exactly what the pricing was.  But, we never had a challenge to our newly raised pricing because it was in BLACK AND WHITE.

Consumers are mistaking information on the internet as accurate; even though only some of it is.  If you're open and concise with your information; show a good selection of diamonds and jewellery; and they can see, touch and feel your jewellery, how can you miss?

Suggested content for your very own information binder:
  • ·      Repair price list
  • ·      Diamond price lists with retail pricing
  • ·      Four C’s (I suggest you write your own with an emphasis on the rarity of higher quality and size levels)
  • ·      Gold and platinum information; including alloy content, nickel allergies and rhodium plating
  • ·      Jewellery care and maintenance
  • ·      Warranty policy
  • ·      Return / exchange policy

Again, even if you know all of this information by heart, reciting it with the open page in front of you will add weight to your assertions.  If you do this well, they might even come to trust you more than the internet.

Thursday, 15 September 2011

Carpe Diamond

Okay, I admit it… I sat and watched the Home Shopping Channel for about 20 minutes last night in my “not so fancy but clean, cheap motel room” in Farflung, Saskatchewan.  Now to be fair, I turned there when I saw the listing show “Ammolite”.  Some of you know that “Korite Ken” is my cousin, so I just wanted to watch long enough to have something to bug him about.  The thing I found interesting is that everything they were selling was in silver.  I’m sure they still sell gold, but like all of us, they’re trying to keep price points down to reasonable levels.

Here’s the thing about price points.  Trying to chase them down the scale is what Wallmart does.  Wallmarts’ suppliers have a price-point and a look in mind.  In order to make those two factors happen, they make jewellery cheaper, thinner and with lower and lower quality gemstones in order to fit the price-point.  I’m not equating Korite’s product with Wallmart at all.  I’m simply saying that jewellery is and should be more expensive today than it was 10 years ago.  Vive la difference.

All of this talk about making 6kt and 8kt gold, the silver bead phenomenon, stainless steel, titanium and other alternative metals reflects irrational fear.  What if home-builders decided to make houses out of cardboard in order to keep price points the same as they were 10 years ago?  What if Detroit, Japan and Korea decided to start making cars without airbags, without ABS brakes and with Firestone tires? 

Homes are being built to a higher standard than ever.  Cars have more features than ever.  They’re fetching higher prices than ever.  More money is being spent than ever, so why are we reducing features?

Some aren’t.  We have retailers selling more caraters than ever, more 2ct diamonds than ever and more one-off pieces than ever.  This is the time to not only carpe diem, but it’s time to carpe diamond!  Seize the diamond!

Friday, 9 September 2011

Social Networking

Social Media is a new buzzword for our industry.  Everyone wants to be on-board, but few are familiar with “how”; let alone “why”.  I’ve spoken with many jewellers who feel like they’re going to miss-out on something big unless they are involved in “social media.”

I’m starting to use Facebook more, and I now tweet.  I have this blog and have published another one for a mission trip to Haiti.  With such limited experience, I can’t tell you what to do to make your business a success with the use of social media, but I can tell you that if you’ve ever been involved in “direct marketing”, you’re already a step ahead.

When I was in retail, I had a small 10th floor operation in Edmonton.  I spent months gathering old job-bags and receipts to compile a mailing list because I believed it important to prospect from people who have already given you money.  I wrote, photo-copied and stuffed envelopes to get my “GemNotes” newsletter into the hands of friendly faces.  This was “targeted direct mail” using free information to earn loyalty.  When fax-mail became popular, I was on the road with Customgold and used that to distribute “road reflections newsletter.”  Now that email is available, I’ve used email to notify my targeted audience that they can “click-through” to the latest edition of my “Road Reflections Blog”.

The progression from direct mail, to fax-mail to email is all the same thing.  It’s all DIRECT MARKETING.  It’s getting a tailored message to targeted group of people.  The only difference is that we’ve gone from postage stamps to fax machine, to computers for our method of distribution.  Each step makes direct marketing cheaper and easier to do.

Here’s where the rubber meets the chicken --- due to technological advances, direct marketing is becoming easier and cheaper, so everyone can and is doing it.  If everyone can do it cheaply and easily you’ve got more and more competition.  Facebook, Twitter, LinkedIn, etc. are making it possible for little Becky’s “I’ve got a cold (frowny face)” to push your marketing down into the cyber-basement.  It takes no thought and almost no work to post a message on social networking.

How do you stand-out?  Ask Robert Collier.  He wrote the seminal work on direct marketing, “The Robert Collier Letter Book” in the 1930s.  The late Mr. Collier focuses on amazing headlines and convincing copy to spur consumers to spending.

Direct marketing actually takes three primary elements; a good headline, a compelling message and a great inner reality.  If you don’t have good headlines (the ad for the ad,) then nobody will read what you have to say. 

If your message doesn’t compel people to action, then you are wasting your time.  I’m not saying that they have to storm-on down and buy a 2ct diamond because you Tweeted them into it.  I’m saying in the immortal words of David Ogilvy, “the heart and soul of advertising is a BIG PROMISE.”  You’ve got to have a message that either brings people into your store now, or endears them to patronizing you in the future.  They have to be convinced that you have an offer that will not only be good value, but add value to their lives.  In order to draw people in, you need to promise the fulfillment of their need for love, acceptance, prestige, self-fulfillment or any other your targets’ hot-button “needs.”

Oh, and by the way, if you don’t back-up your boasts with a great reality, you’ll only sell them once if at all.  If you believe as P.T. Barnum did that “there’s a sucker born every minute,” you’ll suffer the downside of social networking.  In a recent discussion about the issue with Dick Jewell of Mitchell & Jewell in Red Deer, he pointed out the dark-side of social networking.  If someone has a beef against you, social networking can rapidly accelerate bad publicity.

If you want excel at social networking, study the masters of direct marketing.  Understand that the easiest most automated ways of direct marketing by far have the lowest response rates.  If you really want to make money from social networking, maybe try a hand-written letter in a hand-addressed snail-mail envelope. 

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