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Ask INSTORE: April 2009

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Online networking for jewelers, better lifetime trade-in guarantees, and getting off the sales floor — forever.

[h3]Plenty of online networking options available for jewelers[/h3]

[dropcap cap=Q.][h4][b]What are some of the better online networking tools available to jewelers?[/b][/h4][/dropcap]

[dropcap cap=A.]There is no shortage of forums out there — which, as you’ve evidently found, is precisely the problem: There are too many to choose from. The oldest and best known is still Polygon (polygon.net), which remains a good place to ask fellow jewelers questions, source product and seek advice. But there are also lots of free alternatives, says Robin Gambhir of OpenBlue Networks, which runs the largest network of retail jewelry sites in Canada. “For jewelry makers, Ganoksin.com is a good resource for technical information. JCK offers a forum at jckmarketplace.com but you have to register before you can see anything.” And of course for information about retailing, check out INSTORE’s newly designed website (instoremag.com) by clicking on the “Community” link on the top. “For jewelers with an interest in technology, our company launched TheWiredJeweler.com, which is a social network for jewelers,” says Gambhir.[/dropcap]

[componentheading]TRADE-INS[/componentheading]

[contentheading]Curse of the Lifetime Guarantee[/contentheading]

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[h4][b]Years ago, like a lot of jewelers, we guaranteed customers that if they brought their stone back to us, we’d give them full credit for the retail dollars spent. But with the evaporating margins on diamonds we are now putting out cash to take back a (sometimes not very good) diamond that was bought years ago. Should we stop doing trade-ins?[/b][/h4]

John Anthony Jr., the owner of John Anthony Jewelers in Bala-Cynwyd, PA, has been doing such trade-ins for years and says they can still work if you do the following:

— Don’t try to charge keystone for the diamond;
— Ensure the customer knows that the metal is, or will be, based on the current (at that time) scrap price;
— That you understand the laws of probability work in your favor. That is, only about 10 percent or fewer of customers ever turn in their original diamond;

And most important, that you only sell better-grade stones. If you sell junk, or stock junk you’re dead, because you will never be able to resell it, he warns. He also suggests doing a GIA or other course to brush up on your diamond knowledge so you never, ever get stuck with stones that won’t sell again. And if you’re still not convinced that you can make it work, David Geller of Jeweler Profit, suggests putting it in writing that “We’ll give you full credit, but you have to spend twice as much on the second diamond.” Says Geller: “If you do that, and raise the margin a little on the new stone, you should at least come out very little out of pocket, waiting for their diamond to sell to then make your profit.”

[componentheading]CUSTOMER RELATIONS[/componentheading]

[contentheading]Feeling Special[/contentheading]

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[h4][b]Everyone says that with times being tough, you should go back to the well, meaning your existing customers. But how do you ensure you don’t bug them with repeated invitations to come and buy stuff?[/b][/h4]

The secret is to make them feel special. Let your best customers know when new merchandise will be coming in, and especially, if you decide to put certain pieces on sale. Second, show them you value them, that they are different from the customer who just walked in off the street.

This can be done in a variety ways from small rewards — free regular cleaning service, free appraisals, even fridge magnets — to keeping notes about the little things in their lives that you can bring up in conversation later. Then it’s a matter of not only seeking to maintain your history of sales with them but increasing the sales cycle by upselling as well with higher priced items, add-ons and service offers. Remember that each time your focus should be on finding the right piece for each particular customer, not just any item to top up the bill.

[componentheading]SALES FLOOR[/componentheading]

[contentheading]Leading from the Front[/contentheading]

[h4][b]At what point should I cut out of sales?[/b][/h4]

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Working out the value of your time to the business is a fairly straightforward sum and if your financial goals are bigger than any sales you could close on the floor, then you are right to be looking to spend more time strategizing, working on marketing campaigns, meeting with potential partners, taking advanced business courses or whatever. But it’s a mistake to think you can or should ever stop selling. Your salespeople need to see you constantly looking to bring in new business. That can be with regular stints on the salesfloor, playing a support role, making the odd old-fashioned sales call or by trying to sell the company at a higher level. Once it stops with you, it’s over from the top down.

[componentheading]MARKETING[/componentheading]

[contentheading]All in the List[/contentheading]

[h4][b]Do you have any tips on buying a mailing list?[/b][/h4]

We do, and like all good marketing advice it’s built around a group of initials: RFM. That’s something you should never stray from. RFM stands for Recent purchase history, Frequency and Monetary value.

In other words, when did the people on the list last make a jewelry purchase and how much did they spend? A good list broker should be able to provide this data. Second, check how old the information is. “Hotline” responders, those who responded to an offer in the past three months, are the most coveted because they are much more likely to take up a new offer than a stale name (which means basically anything older than 18 months.)

Third, older people are more receptive to direct mail offers. And sadly, over 35 qualifies as “older” these days. When you talk to a broker be sure to specify that you want “response lists” as opposed to the more common “compiled lists,” says Jonathan Downing, VP of marketing communications at Fruchtman Marketing. “Response lists prove mail responsiveness in their very nature; they are harvested from a previous mailer’s direct-mail responders, hence the name,” he says. In mailing lists, as with everything, you basically get what you pay for, and highly qualified lists are expensive. So always be looking to build up your own database to run “permission-based” campaigns. That is, send mail or e-mails to people who want it.

[componentheading]NETWORKING[/componentheading]

[contentheading]It’s a Wide Wired World[/contentheading]

[h4][b]What are some of the better online networking tools available to jewelers?[/b][/h4]

There is no shortage of forums out there — which, as you’ve evidently found, is precisely the problem: There are too many to choose from. The oldest and best known is still Polygon (polygon.net), which remains a good place to ask fellow jewelers questions, source product and seek advice. But there are also lots of free alternatives, says Robin Gambhir of OpenBlue Networks, which runs the largest network of retail jewelry sites in Canada. “For jewelry makers, Ganoksin.com is a good resource for technical information. JCK offers a forum at jckmarketplace.com but you have to register before you can see anything.” And of course for information about retailing, check out Instore’s newly designed website (instoremag.com) by clicking on the “Community” link on the top. “For jewelers with an interest in technology, our company launched TheWiredJeweler.com, which is a social network for jewelers,” says Gambhir.

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