A Store Owner Wants Her Associates to Push a Diamond Brand, But a Manufacturer Spiff Is Motivating Them to Promote Another

TAYLOR, OWNER OF Verve Jewelers, was feeling disappointed as she scanned the store’s monthly sales report. The sales figures for their recently introduced luxury diamond engagement ring line, Adore, weren’t meeting expectations. This prestigious brand had come with a hefty price tag — a $200,000 initial investment. But it wasn’t just about the financial commitment; Adore represented a strategic move to elevate the store’s brand image and attract a new clientele.

Verve Jewelers had gone all out to ensure Adore’s success in their showroom. The brand provided extensive training for the sales team, ensuring they could confidently showcase each Adore ring. Recognizing the importance of commission-driven sales, Verve Jewelers implemented a $25 spiff (commission booster) for every Adore ring sold. Additionally, they prominently featured Adore on their website and collaborated with the brand to utilize co-op marketing dollars for targeted advertising throughout the year.

Despite these efforts, sales of Adore lagged behind those of a competitor’s brand, Boundless Brilliance. Taylor grew increasingly concerned. Was Adore simply not resonating with customers, or was there another factor at play? As she delved deeper, a conversation with Diana, her sales manager, revealed a concerning trend. The sales team, particularly newer associates, seemed to prioritize showcasing
Boundless Brilliance rings whenever possible.

As Taylor observed the sales floor, she noticed the way the team spoke about the brands had changed. When a customer expressed interest in a diamond ring, the initial focus seemed to be on Boundless Brilliance. Sales associates would pull out these rings, highlighting their unique cuts, settings and celebrity endorsements with enthusiasm. When it came to Adore, descriptions were factual but lacked the same spark of excitement.

Concerned by this shift, Taylor decided to have a casual conversation with a few sales associates. She started by praising their overall sales performance and then gently inquired about their experiences showcasing the different diamond lines. One associate, Lizzy, a bright young woman who had consistently exceeded sales goals, confided that she thought Adore was beautiful, but felt some of the designs were a bit traditional. She noticed her customers were more drawn to the bolder styles offered by Boundless Brilliance. Another associate, Michael, confided to Taylor that Boundless Brilliance’s spiff was a motivating factor.

Taylor listened intently, her initial suspicions solidifying into a knot of worry in her stomach. The team’s subtle shift in presentation suddenly made perfect sense. Later that day, she reached out to a sales representative from Boundless Brilliance to ask if they were giving store associates a spiff. Through their conversation, she learned that Boundless Brilliance had recently implemented a generous spiff program, effectively offering a $50 commission per ring sold. Taylor was surprised to hear this because she wasn’t notified of the new incentive.

The revelation hit Taylor like a ton of bricks. Boundless Brilliance’s financial incentive was double what Verve offered for Adore. A higher spiff meant a higher commission, and her team, like most retail sales associates, relied heavily on commission to supplement their base salary. She was faced with a complex dilemma. Eliminating the spiff on Boundless Brilliance would likely trigger resentment and potentially demotivate her sales team. Yet, continuing with the spiff meant potentially sacrificing sales of other, potentially more profitable brands, and ultimately, hurting the store’s bottom line.

Drue S.
Albany, NY

Here at my store, we have weekly sales meetings to discuss any new products and any customer concerns. Communication with a sales team is imperative since they give the clients the first impression of the business. Having a commission on the jewelry should always be consistent and offered. The fact that the owner was not apprised of the spiff on the older line is inexcusable. I would be extremely disappointed with the lack of communication from my rep. That company would definitely be hearing from me. That is not a small investment, and any spiff on the older line should have had the owner’s input and approval. Having said that, I would give the same spiff on the new line that the staff are not pushing. With equality, there is little excuse for the new line not selling.

Megan C.
Poulsbo, WA

I’d be quite concerned that one vendor implemented a spiff without the owner knowing. I’d want to dive into this aspect more. Did the sales manager know and not share? Did the brand bypass all management and go straight to employees? This is one problem area for me. I’d have to talk with the brands before determining a response. Can Allure increase their spiff? Can the store owner match it to equal the spiff between the two brands? Next, look at overall training on the two brands for employees. They need to be able to confidently sell both to the clients they have. As hard as the initial investment is for the Allure line, I’d also look for a way out of carrying it as a last resort.

Eric L.
Draper, UT

How can jewelry store owners create a commission structure that incentivizes the sale of all brands, not just those with the highest spiffs? I’d like to address just this first question. I see a lot of questionable practices with overall commission structure. I note on a regular basis that the goal seems to be the uniform sale of brands. This seems counterintuitive to me. Shouldn’t the structure be brand-agnostic and aim purely at motivating overall profitability? If I had a store, I wouldn’t allow spiffs from brands whose average gross margin dollars per sale were below my target. I would do everything reasonable to incentivize the sale of those brands providing the highest averages. Would love to hear why I’m wrong.

Bruce A.
Sherwood Park, AB

The good and the bad (there is no ugly). First the bad; Boundless Brilliance’s spiff, while generous, should never have been presented to anyone other than Taylor. By doing an end run around Taylor, this supplier has jeopardized their relationship with Verve Jewelers, forcing Taylor into a corner. They may sort it out going forward, but it was an unnecessary gambit on the part of Boundless Brilliance. The good is that Taylor now appreciates that the $50 spiff works very well as a motivation to sell her more profitable lines and Adore specifically. Perhaps the Adore team will agree to subsidize an additional $25 spiff on top of the $25 that Taylor is already offering?

Anni W.
Bend, OR

We were having a similar challenge with our team prioritizing a couple of incentivized key brands over our not-incentivized private label pieces. Like Taylor, it was important to support our commitment to our brand partners while maintaining results on our own label as it had a much healthier gross profit and was very important to our long-term plan for the business. To combat this, we really considered what drives our sales team. Ultimately, money. Knowing this, we developed a quarterly commission structure that is now based on not only overall sales but includes a baseline gross profit percentage target with opportunities to earn even more with a higher gross profit. For them to achieve their sales goal, it is necessary to sell the higher-end branded pieces, and to achieve the gross profit goal, the private label product. A delicate balance. We introduced the new program by first demonstrating what their earning potential was and then how it creates healthy growth for the business, further maximizing potential earnings.We have had consistent success since we rolled out this program.

Peter T.
Show Low, AZ

No vendor has authorization to offer spiffs, bonuses, or any form of compensation to my staff without my permission. I would contact Boundless Brilliance and let them know that if they ever contact my employees without my knowledge, I will never buy from them again (and post to all other jewelers the reason why). Given the financial damage they have done to my store, I would insist on compensation (cash, future discounts, etc.). I would immediately stop the spiffs from Boundless Brilliance. To ease the loss (in the minds of my employees) of the Boundless Brilliance spiff, I would temporarily increase the spiff on the Adore line to $50. Then I would phase out all permanent spiffs. They should only be used to stimulate sales at a particular time or for a particular product.

Jason R.
Bakersfield, CA

The basic ideology here is “sell the salesmen.” Sales associates are the gatekeepers of what gets first look. When Boundless Brilliance made a spiff double that of Adore, this nearly guaranteed that Adore would never be shown first. It may be helpful to revisit with your vendors that all spiffs have to be approved before going live. Secondly, whether you reduce the Boundless Brillance spiff or increase the Adore spiff, something has to be done.

You will not be able to get a true feel for how successful Adore will be if they aren’t being sold on level footing with Boundless Brilliance.