Saturday Story Time - Insurance Claims

After having left the jewellery insurance claim business for a couple of years, I thought I had a good reason to re-enter that market.  Working for Diamori in downtown Edmonton, I now had the ability to adjudicate high-end watch claims, we could repair damaged diamonds and I had access to more high-end jewellery.  So, now that Diamori was up and running, why not put my new connections to work with my network of insurance adjusters?

I hit the phones and then launched a flier campaign telling all of the insurance and adjusting firms that I was at their service; listing my new capabilities.  This flier hit the desk of the person who was coordinating that year’s Claims Manager’s Golf Tournament.  Perfect!  I’ll throw some prizes at them and take part in order to rekindle the old relationships.  It’ll be fun, right?

Do you know the best moment of being hit in the head?  When it stops.  Until I walked onto that golf course and started glad-handing the claims managers, I didn’t realize how much better I had been feeling about jewellery since I had quit doing claims.  All you have to do is look at Harlings in Vancouver or Fleetwood in Calgary.  The insurance claim business can be very lucrative.  It just wasn’t overly lucrative for me, and it made me feel nauseous just being among them again. 

I really enjoyed the rewards of helping people get through a very stressful situation (usually break-ins).  However, it seemed the more honest and forthright I chose to be, the less competitive I was against my competitors.  Underwriters’ rules would change on a dime, and all of a sudden, rather than allowing the client to use their claim to buy whatever jewellery they wanted, you had to replace piece-for-piece according to estimates.  At one point, one of my insurance companies had a policy where they paid one-half of their total exposure to the insured, and then asked us to collect the deductible from the first $500 dollars spent, collect half of everything over the deductible and invoice the insurance company for the balance.  Sound confusing?  It was, but I knew it would only be a matter of time before the rules would change again.

I don’t discourage anyone from pursuing insurance business.  It ceased to be enjoyable for me and therefore I stopped promoting in that arena.  This is a huge industry.  If you don’t understand insurance business and don’t enjoy it, don’t do it.  If chasing corporate awards business is a passion for you, do it with gusto.  Gemology, custom design work, service work, wholesale, volume retail, carriage trade, management are just some of the avenues that you can focus on in your career.  Life is too short to work at something that makes you miserable.

For now, I hope, like me, you’re doing something that utterly fulfills you.  If not, do what you’re doing to the best of your ability so that you can earn the privilege of graduating or transferring to what you’re really passionate about.

Business is in the Beholder of the Eye

Grabbing a quick breakfast at A&W, I realized how easy it is to conduct an entire business transaction without making any eye contact whatsoever. I’ve done it many times.  I can just hear the crocodile hunter now, “Wow!  That’s a beaut!  Don’t look directly into its’ eyes … it might lash-out and sell you something!”

It was just a bacon ‘n egger, so it didn’t really need a close personal connection.  It’s just that when someone looks like they’re not having much fun, it challenges me to put a smile on their face.  It took a pause and bending down a bit to get her to look-up at me, but she finally did.  As soon as we had eye-contact, we had rapport.

Remember that, you young sales assocites.  You may be looking into their eyes, but until you get them to really look into your eyes, you’ll have trouble generating rapport.  You might make a sale without it, but with rapport, you can not only make the sale, but earn future sales by earning CLIENTS.  The eyes are the window to the soul. 

C2A (call to action) – Make meaningful contact with everyone you meet this week; even if you have to stick your head out of your car at the drive-through.  Practice makes perfect.

Lifetime Value of a Customer

In my research into direct marketing, I keep on hearing the phrase “lifetime value of a customer.”  You see, anyone who methodically targets an audience with an “amazing offer” is usually looking for a client, not a sale.  If they get you to buy a Sham-Wow, a set of Ginsu Knives, a Bradford Exchange figurine, or your first 10 CD’s for a penny, they will have opened the door to future sales.  The future sales are what they make their money on.  By making the initial purchase the buyer is saying, “I’m the type of person who is willing to purchase this kind of item from you via this form of marketing.”

In the recent article on “Spruikers”, I wrote, “If you convert (new customers) into long-term clients, their lifetime value from personal spending and referrals is virtually immeasurable.”  Today I want to help you estimate that “immeasurable” number.  Since you lose some clients every year to attrition, let’s call 20 years a lifetime.  Take your average annual sales over the past 5 years and multiply that by 20.  Take a look at how many clients are on your current database (assuming you have one.)  If you’re doing around $800,000 per year as of late, and you have accumulated 3000 names in your POS system, your L.V.C. is in excess of $5,000. 

Does anyone else think that it’s worth spending some money to add more names to that list?  What if you were to spend $20,000 this year to attract new customers to your store?  If you make sales to 150 new customers through your efforts and each of them spend $140 that’s only $21,000 in sales.  That barely covers the cost of marketing, and not the product itself.  Failure?  Not necessarily.

Let’s look at the lifetime value of 150 new customers.  If your L.V.C. is $5,000, then 150 new clients are worth $750,000.  Yes, that’s three-quarters of a million dollars.  How much would you spend to get those 150 new clients now?

As you consider your marketing plan and promotional calendar, don’t forget to take into account the need for targeting new clients.  If you market exclusively to your known clients, that attrition I mentioned earlier can take that same $750,000 away from your future sales.

Patriotism

I’ve been watching old seasons of Kiefer Sutherland’s 24.  In season 2, Jack Bauer is working undercover with a group of bad guys who are plotting to blow-up his counter-terrorism unit building.  When a captive telephone repair guy asks, “who are you guys?”  One of the bad-guys tells Jack to answer.  His reply, “we’re patriots.”

The fact that bad guys refer to themselves as patriots was cause for instant fear.  Why is that?  Well, patriotism implies that you believe in your cause so fervently that you will take extreme measures to protect or further it.  You will kill or die for it.  When Hitler or Bin Laden called their constituents to perform patriotic acts, horrific things were done out of firm patriotic convictions.

It’s been many years since our nation has been asked to test our own patriotism.  If Canada had to step-up and protect our very existence against an invading enemy, how would you respond?  Would you be willing to go to war or send your children to war?

Deep thoughts. 

Let’s move onto jewellery.  What if I told you that the jewellery industry was under attack.  The very way we have conducted business is being threatened.  If we do not push back against this enemy, our businesses could be in grave danger.  I’ve never heard of Ford dealers trying to pass-off Lada’s as Mustangs.  I’ve never heard of a furniture store trying to sell knotty pine as teak, and the Leather ranch has yet to be criticized for selling the hide of the cowardly “nauga” as leather.

We’ve put-up for years with embellishment of diamond qualities, but never to this extreme.  Because so many diamonds are being sold with grading certificates of one kind or another it’s easy to just take them at face value and blame the supplier IF they’re ever called into question. 

The more difficult and more patriotic route is to stand-up for our industry and begin rejecting misrepresented diamonds and rejecting the purveyors thereof.  You may lose sales to jewellers without the same convictions.  Those losses are casualties of war.  The big question is, “are you going to beat-‘em or join-‘em?”  In many ways the stereotype of the polite Canadian is accurate.  Picture a jeweler in New Jersey being told by a client, “the guy down the street is offering me an EGL certified SI2/G for $2,000 less than your diamond.”  How polite and diplomatic is that guy likely to be regarding the discrepancy? 

Maybe us Canadians speaking-up and aggressively defending our integrity and our standards is just what we need; even if our brashness isn’t very patriotic.

Jewellery Vending Machines??? Come on!!!

If you’ve traveled through major airports you might have seen vending machines selling iPods, DVDs, premium brand headphones and the like.  Warren Buffet’s Richline Group are launching vending machines for jewellery.  Mark Hanna, an executive from Richline explains:

“As we toured stores, we got the distinct feeling that there was very little service in some stores. And in the stores where there was service, it wasn’t really oriented toward the price-point goods. So this was a culmination of that process.” Read more… (JCK Online)

My conclusion about Richline’s plans may not be what you expect.  Good for them.  It’s about time.  Let’s take all of the beaded bracelets, $99 diamond heart pendants, $19.99 diamond studs, sleepers and easy-to-sell jewellery and put it in vending machines.  Imagine, “no more browsing for hours, just to buy a bead or two.” (click if you haven’t heard my parody of John Lennon’s Imagine)

It doesn’t take an electronics engineer to sell an iPod, so why not sell them in machines?  Trained monkeys can sell a lot of what jewellers are selling today; and if Warren Buffet has his way, by vending machines.  He’s a brilliant man and I’m sure he’ll make a fortune off of these.

Later in the article, JCK’s Rob Bates writes, “of course, old timers and branding purists may recoil: Is a vending machine really the proper presentation for an elegant product like jewelry?”  Well, most price-point goods only look elegant. 

If price is the key benefit and they are so saleable that a machine can do it, let the machine do it!  Save your highly skilled, personable, jewellery savvy sales associates for selling the good stuff!  Only, don’t put those machines at the front of your store, put them in the back.  If you can’t sell a client something of lasting quality, juke your thumb over your shoulder and direct your customer to the vending machine for something more suitable.

Jewellery is the ultimate gift!

This story would not happen with any other gift and jewellery.  It is the ultimate expression of love, the most treasured of heirlooms.

Watch this heartwarming story from CNN:

http://cnn.com/video/data/2.0/video/bestoftv/2012/05/19/woman-finds-rings.wbz.html

New Musical Video Blog - Let it Be Flawless 'D'

The latest video blog is also my second music video.  Apparently I'm in my "Beatles phase" right now.  This parody of Let it Be addresses diamond selling, internet diamonds and diamond grading.  I hope you enjoy!