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Yoga, Tequila and Huey Lewis — Jewelers Share Their Most Unusual Holiday Coping Strategies

Everybody has to find a way to release the pressure somehow.

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This story was originally published on INSTOREMAG.COM in November 2016.

1. I dance wildly to the radio in my back office. — Kate Pearce, Pearce Jewelry, West Lebanon, NH

2. I spray orange-scented essential oil around my store to heighten the good vibes. — Janne Etz, Contemporary Concepts, Cocoa, FL

3. Play as much Huey Lewis and the News on the store stereo system as possible. — Matthew and Emily Clark, Spath Jewelers, Bartow, FL

4. I’ve made a fair amount of jewelry while drinking tequila. — Daniel Spirer, Daniel R. Spirer Jewelers, Cambridge, MA

5. I dress up as Santa Kas. I have a lady Santa outfit. It’s pretty; not a Mrs. Claus outfit. — Kas Jacquot, Kas A Designs, Jefferson City, MO

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6. Inhale rosemary essential oil for focus. — Julie Terwilliger, Wexford Jewelers, Cadillac, MI

7. I wear a bow tie every Christmas Eve while working the sales floor. I never wear bow ties, so it throws people off. — Marc Majors, Sam L. Majors, Midland, TX

8. I go out the back door and talk to myself, if just for a few minutes. Sometimes even the boss needs a pep talk or a scolding! — Rosanne Kroen, Rosanne’s Diamonds and Gold, South Bend, IN

9. I always have an adjustable set of dumbbell weights in my office. During times of stress or just to get my mind right, I will rep out a few sets. It tends to be a major stress reliever for me. It’s similar to positive reinforcement. — Howard Jacobs, Toodies Fine Jewelry, Quincy, MA

10. Every morning, I watch Golden Girls as I get ready for work. I get some of my best one-liners from Bea Arthur. — Mary Jo Chanski, Hannoush Jewelers, Rutland, VT

11. Downward dog yoga poses in the middle of the floor. — Meg Rankin, J. Rankin Jewelers, Edmonds, WA

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12. Each morning, I start the day with a self-made juice consisting of carrots, beets, ginger, celery, apples, lemon, green peppers, bananas (bitter melon in season) and spinach. — Kent Bagnall, Kent Jewelry, Rolla, MO

Over the years, INSTORE has won 76 international journalism awards for its publication and website. Contact INSTORE's editors at editor@instoremag.com.

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Real Deal

When Nature Strikes, Should This Owner Take Care of Her Employees or Her Business?

A longstanding tradition of holiday bonuses and raises is threatened.

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ROBIN SAGER OF GULFSHORE Jewelers had worked with her mother and father for more than 10 years before their 2015 retirement, and she helped to build the business from a small repair shop into a regional powerhouse. Her dad had always talked about “taking care of those who take care of you.” He was proud of his longstanding friendships with a number of sales reps and of his loyal and long-tenured staff. Once she bought the business and took over day-to-day operations, however, Robin quickly saw that what she had always considered her father’s admirable loyalty was really just his way of avoiding difficult situations with vendors, customers and employees — all of which would need to be handled if Gulfshore Jewelers was to be restored to sustainable health. With a firm commitment to the future, Robin laid out her priorities and chose to deal with the issues decisively yet slowly to minimize disruption.

ABOUT REAL DEAL

Real Deal is a fictional scenario designed to read like real-life business events. The businesses and people mentioned in this story should not be confused with actual jewelry businesses and people.

ABOUT THE AUTHOR

Kate Peterson is president and CEO of Performance Concepts, a management consultancy for jewelers. Email her at kate@performanceconcepts.net

Within the first year of her tenure, Robin took on the problem of shrinking margins and obsolete inventory. In some cases, that required severing vendor relationships that her father had maintained for years and building new ones with suppliers of more current lines at more advantageous prices. She also re-evaluated the store’s pricing strategy, re-tagging existing inventory using consistent markups and eliminating large-scale discounting. As expected, several of Gulfshore’s older customers were unhappy when they could no longer claim their usual 30 percent “friend of Joe’s” discount. When the “regular” sales reps stopped visiting and new product started arriving, a number of employees were openly critical of Robin and of what they saw as a betrayal of the friendships that were so important to her father. Much of the grumbling subsided over time as the new product caught the attention of regular customers who recognized the fair pricing.

In 2017, Robin chose to address the issue of the store’s often inconsistent business practices. She worked with an industry consultant to develop an Employee Manual that clearly defined performance expectations and with her (somewhat reluctant) team to implement a mission statement and service standards based on a forward-thinking “extraordinary customer experience” philosophy. By the end of 2017, despite some lingering staff grumbling about missing Robin’s dad and the way things used to be, Gulfshore’s volume had stabilized a bit, and the bottom line was looking healthier.

Robin knew that the last big issue she had to deal with was the store’s payroll. It was clearly high as a percentage of gross profit and was out of line for the store’s volume. She looked at a list of eight employees who had all been with the company for 10 years or more. Each was paid a salary that had been automatically increased by 3 percent per year regardless of store performance to accommodate cost of living increases. They also got a Christmas bonus each year that ranged between $1,000 and $2,000 per person (based loosely on hours worked) because her father had always believed that honesty and loyalty should be rewarded.

There were no sales goals or productivity standards in place and no commissions attached. It was easy to see that some people worked harder than others. Some were really good at their jobs (jewelers and salespeople with solid relationships in the community) and some simply did a good job of being nice to the people who came into the store. Overall, they all got along well, though — and since it seemed that things were picking up a bit, Robin decided to leave the structure as it was for one more year while she worked on designing a new plan that would be fair to everyone, including the business. Everyone got their 2017 Christmas bonus and a 3 percent raise going into 2018.

Much to Robin’s delight, business continued to improve through the first half of the year. Traffic in the store and in the town overall was up, and everyone’s comfort level with the new product, policies and procedures seemed to be increasing steadily. It all hit a major stall in the fall though, when back-to-back hurricanes blasted through the region, creating major issues for local residents and wreaking havoc on the tourism industry in the area.

By the end of the year, sales had dropped nearly 30 percent, and the bottom line Robin had worked so hard to recover was decimated. Looking at the numbers in December, Robin realized that there was no way she could afford to pay out the usual Christmas bonuses. On one hand, she hoped the staff would understand, since they could easily see the circumstances, but on the other hand, she knew that they were all impacted by the storms as well and that they were likely relying on the money for their own families’ Christmas celebrations. She also knew that without a doubt, there would be no salary increases for the coming year, and that the base plus incentive compensation plan she’d worked to develop would be an absolute necessity.

Though she knew she could stand to reduce staff overall, Robin hated the idea of making life any more difficult for her people and was terrified with the prospect of damaging her reputation.

The Big Questions

  • Are there options that Robin is missing with regard to the holiday bonus?
  • Should she find a way to take care of her people and pay it as usual, even if it means borrowing more money from the bank?
  • Is there a way to change a longstanding (and generally unreasonable) compensation plan without losing long-tenured and community-connected employees?

Expanded Real Deal Responses

Jillian Hornik
Jae’s Jewelers, Miami, FL

Are there options? Yes, she can openly address the current financial strain placed on the business due to the inclement weather. Meet with each employee to discuss the impact of receiving a bonus versus receiving a pay increase. From there, the employees should understand the reasons behind a pay change. In my opinion, she has to choose bonus or pay increase; can’t take away both.

Should she find a way? Not as usual, but yes, she should pay. Whether it is a bonus without a pay increase or no bonus with a smaller pay increase, it wouldn’t be too much out of pocket. If all the improvements increased business as stated, the store’s bank account will be healthy again in only a month or two.

Is there a way to change? Possibly. If those same employees were to look for a similar job now, they would see what compensation structures are currently available. If those other available jobs are all commission-based and more demanding, your employees will fuss, but most likely stay.

Carolyn Warnke
Gunderson’s Jewelers, Omaha, NE

Assuming Robin has already cut her own wage, she cannot currently afford the entire bonus payout this year. Recommend to her employees that they receive what she can pay, whether it be 30 percent, 50 percent, or 80 percent, and when the rest of the funds are available, she donate them toward hurricane rehabilitation efforts. This will help build rapport with the community and economic recovery as well, meaning there will be less delay in sales coming back into the store and making Gulfshore Jewelers a household name for consumers.

As far as the 3 percent increase to yearly pay, if Beth had not yet announced the reformatting of her bonus and wage system, now would be the perfect time. While everyone is struggling financially and emotionally due to natural disasters, having this as news would show there’s hope for the future and better times ahead for the town and the company.

Overall, these recommendations should at least pacify her workers, prevent layoffs and greater debt, and in the end, benefit the community to some degree.

Tim Soulis
Golden Classics Jewelers, Harrisonville, MO

A bonus should be contingent upon performance of the employee and the business — not guaranteed. Explain the challenge of a 30 percent drop in business, ask for buy-in to weather the storm.
US Consumer Price Index for Urban Consumers shows inflation was 0.7 percent in 2015, 2.1 percent in 2016, 2.1 percent in 2017 and 1.9 percent in 2018. The historic 3 percent raises paid have outpaced inflation. Eliminate this expectation.

Manage employees according to performance or lack thereof. Employees who are not in alignment with the “team” and “business” may need to find new homes. Keep good faith, be honest. Lead with optimism and fairness. Evaluate performance, conduct difficult conversations, set goals and motivate the team. Convert to base plus incentive pay in lieu of automatic raises and bonuses going forward. Bonuses can be used privately to reward exceptional individual results.

Focus on employees who are generating the most revenue. Keep their buy-in, ask for more. Reward results. The community cannot run the business. Eliminate entitlement mentality. Complacency cannot persist. Take courageous steps now to be stronger when the whole economy sees recession.

Marc Foster
Plaza Jewelers, Houston, TX

When the “expert” was making the policy book, a section on “Emergency Preparedness” should have been included. We have had to respond to several natural disasters. Robin should call each employee and let them know the situation. Set a sales goal, and if they meet that goal, they will be rewarded with a bonus. This way, they will feel like they are getting something for hard work. She should not bring up the automatic pay increase; just address it privately if asked.

Valerie Naifeh
Naifeh Fine Jewelry, Oklahoma City, OK

This is Robin’s opportunity to do three things: inspire her staff, change the automatic bonus structure, and be a local hero. Don’t borrow any money. Share the news of the 30 percent drop in sales with the staff. Explain it‘s not possible to give the bonus; however, a bonus can be paid monthly or quarterly if the following happens: the sales staff calls clients every day about upcoming anniversaries, birthdays, holidays, wish list items and add-on sales, and these result in measurable sales at the expected profit margin. The jewelers need to complete repairs and custom jobs on time so delivery is not delayed. Robin can negotiate new terms for merchandise she can’t pay for. Most vendors will give extended terms with no interest or take product back with a minimal restocking fee. In the end, the staff who prove to be “rainmakers” stay and those who don’t are gone. Now the new bonus system is in place! You produce, you get a bonus! And the company survives.

Jennifer Farnes
Revolution Jewelry Works, Colorado Springs, CO

This may be the year for Robin to pick one versus the other … and to communicate transparently with her team. People understand numbers when It is laid out in black and white. Share a sales report of year-over-year numbers showing a profit and loss history, and give each team member the option of either a cost-of-living increase or a one-time bonus. If she truly can’t afford to do either, then it is time to make the decision to let go of under-performers or abstain from the wage increase/bonus altogether and let team members leave on their own. If they see and truly appreciate how much the business was impacted, she won’t lose anyone and they will band together to recover together. If the recovery is huge, she needs to be fully prepared to pay it forward to them all in the following year.

Robert Cohan
Craig Brady Jewelers, Montclair, NJ

Difficult situation; however, her team has been there for years and should know the facts as to the unavoidable downturn in business. It’s not a change of policy implementation without basis.

Her team needs to be introspective. They’re not being “punished.” Unless she makes some changes, the store’s future could be devastating, and that would affect them all, long term.

Her loss is their loss, inevitably.

The “winners” will stick around and fight to put it back in good shape, day by day. Their livelihood depends on their commitment to success.

What’s the Brain Squad?

If you’re the owner or top manager of a U.S. jewelry store, you’re invited to join the INSTORE Brain Squad. By taking one five-minute quiz a month, you can get a free t-shirt, be featured prominently in this magazine, and make your voice heard on key issues affecting the jewelry industry. Good deal, right? Sign up here.

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Tip Sheet

The Best Question to Ask Job Candidates and More Tips for March

Don’t miss “the right-hand close.”

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Security
Beware Social Thieves

Going to Basel? Beware of who you tell, what you post, and how you move. “Skilled gangs of robbers monitor social networks, and, based on information that the exhibitors post, the robbers have attacked, robbed and even burglarized hotel rooms that the exhibitors were staying at,” Itay Hendel, CEO of Israel-based ISPS, which specializes in theft prevention for the jewelry industry, says in a statement.

Management
Will Do, Not to Do

When making your daily to-do list, don’t pick 20 things you hope to do and that you think will add up to one day’s work: you’ll overestimate your capacities. Instead, pick the three or four most important things and really commit to doing them, even if you think they’ll take you only a couple of hours, suggests Luciano Passuello at litemind.com.

Showroom
Sign Language

When you go to a jewelry show, you ask your vendors what’s new, right? Of course you do. Consultant Larry B. Johnson, author of The Complete Guide to Effective Jewelry Display, says the best way to draw customer interest from regular clients is to put a whiteboard on an easel (total cost: $79) just inside your door with all of your new products written on it.

Sales
The Right-Hand Close

Owners are uniquely placed to provide a blessing to close a sale, but knowing when to intervene can be tricky. The sales associates at Linnea Jewelers in La Grange, IL, signal such situations by shifting the piece to their right hand (a technique recommended by sales trainer Shane Decker). Owner Denise Oros will then step in to provide the reassurance that’s often needed with a line such as “Great choice! I got that stone, pearl, etc. in Tucson, it is a one-of-a-kind, she will love it! You really have an eye for the finer things.”

Personal
Keep Vacations Short

There seems to be a belief that a “proper” vacation requires at least a week off. But as the American psychologist Thomas Gilovich told the Boston Globe recently, “If you have to sacrifice how long your vacation is versus how intense it is, you want shorter and more intense.” That’s because we remember and judge our experiences, whether good or bad, not in their entirety, but according to how they felt at their emotional peak and at the end.

Hiring
Ask How They Prepared

Anand Sanwal, the CEO and co-founder of fast-growing tech company CB Insights, has an interesting take on the best question to ask a job candidate: “Tell me how you prepared for this interview.” Not only does the reply likely reveal a lot about how the person’s commitment to the position — do they care? — but it will hint at their work ethic and their analytical capabilities, he says.

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Commentary: The Business

Raw Gems Hold the Key To Unlocking the Imagination

Learn to sell jewelry as the powerful talisman it always has been.

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WHY DO WE, HUMANS, have such a thing as jewelry?

I don’t think it was intended to mark status originally, back when we were walking around naked and hunting bears and living in caves. I think, on the contrary, it was because of the unforgettable experience of suddenly coming face to face with something amazing, a small thing that shimmered, so unlike anything else in your life, so special, that from that moment on, you knew your life was changed forever.

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You held onto that gem, or pearl, or gold crystal, and knew you had to hold onto it, no matter what. But how? You had no pockets, you wore leaves, or maybe nothing! So you had to figure out some way of drilling it, or wrapping it, and, inevitably, hung it about your neck. In every culture, the first jewelry is always a pendant, one thing protected. When you have something around your neck, you are going to fondle it, and soon you become very attached to it; maybe it will protect you and become your secret power. And that, which I call Transcendence, is why we have such a thing as jewelry!

So when your customer moans, “My daughter does not even like jewelry!” smile and resolve to bring back the magic. In a corner of my gallery, there is a partially enclosed space called the Gem Room with drawers of tourmalines, amethysts and colored sapphires and such, and I enjoy inviting people in to discuss custom work.

But when I see a young adult coming in, quick, before they whip out their electronics, I challenge them: “You look like someone who would like raw gems! Let me show you something unusual!” and I whisk them away to the Gem Room (while the parent goes about their business). I place in their hand a large raw lapis, full of pyrite stars, a piece of opal rough with a shimmering stripe in one corner, or a huge slice of watermelon tourmaline. A transformation! They are now alive.

Then you say “Wouldn’t this be right for Game Of Thrones (or a warrior in Wakanda)?” Then tell them where it came from, how hard it is to find and ask them, yes, to imagine themselves as a prehistoric human walking out of a cave, suddenly finding something amazing like this: wouldn’t they want to somehow keep it? But they have no pockets, they’d have to find a way to drill it, wrap it, maybe, and that is how jewelry comes into being. Then you walk away and let them play for a while.

You know that now they get it.

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