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Ask INSTORE: June 2011

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Shaking up your sales contests, perking up your displays, non-compete pacts, and more.

 [h3]MIX IT UP WITH INCENTIVES [/h3]

[dropcap cap=Q.][h4][b]I put up a weekly “sales report chart” for our associates, so they can see how they are performing against each other. We rank the associates by gross sales and pay performance-based bonuses, but after two years I think we need to spice it up a bit. Any suggestions?[/b][/h4][/dropcap]

[dropcap cap=A.]We’re guessing that your real problem is that the same people keep winning, which is the challenge with numbers: They can be as discouraging as they are encouraging (especially if you’re the associate stuck at the bottom of the table). Also, while gross sales aren’t a bad indicator, they are not always the best gauge of store performance. We know of several store owners, such as Leo Hamel of Leo Hamel Fine Jewelers in San Diego, who hammer into staff that the only thing they care about is margin, meaning profitability. When setting target-linked bonuses you should have two goals in mind — to ensure they encourage the right kind of sales behaviors and that anyone can win. So mix it up. One month offer a prize for most sales, the next month most new customers, then most repeat business or most add-ons. Identify what’s important for your store’s performance and away you go.[/dropcap]

[componentheading]DISPLAYS [/componentheading]

[h4][b]I want to perk up my showcase displays at little or no cost.[/b][/h4]

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Start with a rewrap of your floorboards and then add some accent displays, says Larry Johnson, senior VP of Pacific Northern and the author of The Complete Guide To Effective Jewelry Display. “Ask your display vendor about closeouts, show samples or other discounted displays. Focus on diamonds first and use some of the profits you’ll make there to redo other cases,” he says.

[componentheading] LITIGATION [/componentheading]

[h4][b]I’m worried about California’s new regulations on recording ZIP code information. How do I ensure I don’t
get sued?[/b][/h4]

We understand your concern. The ruling by the California Supreme Court that retailers who request ZIP codes during a credit card transaction, and record that information, may violate the state’s Song-Beverly Credit Card Act, has resulted in some commentators predicting a wave of such litigation. Already, some class action lawsuits are seeking $1,000 for each customer whose information was sought. But be careful and you should be OK. “The court held that ZIP codes constitute ‘personal identification information’ and should not be requested and recorded,” said attorney John Powers of Los Angeles-based Drinker Biddle. “The act does not prohibit a retailer from asking for identification information to verify the identity of the card holder — as long as that information is not recorded. In addition, the act exempts situations where customers’ addresses are necessary for a ‘special purpose’ such as delivery, servicing or installation, nor where retailers accepting credit cards are contractually obligated to provide personal identification information in order to complete the credit card transaction,” he noted. Given the law has a federal counterpart, the Fair and Accurate Credit Transactions Act of 2003, it will be worth watching for all retailers.

[componentheading]CONTRACTS [/componentheading]

[h4][b]I have asked a potential new hire (a jeweler) to sign a two-year non-compete agreement but he says he doesn’t want to sign for longer than six months. Is there a standard acceptable term? [/b][/h4]

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Yes, one year is pretty much the standard, says Suzanne Devries, president of Diamond Staffing Solutions, adding it’s difficult for a non-compete agreement to hold up in court for more than a year. “Make sure you have a good labor attorney look it over, or write it for you, or it will not be worth the paper it’s written on,” she advises. This might also be a good time to ask yourself why you think you need such a long period of protection. Our advice is to focus on what you can do to grow your business and stop worrying about imaginary threats. Business is about execution. Get that right, and you won’t have to be concerned about people stealing your customers.

[componentheading] INTERIOR DESIGN [/componentheading]

[h4][b]What’s the best color of walls to show off diamonds? I have good lighting but the jewelry is picking up the peridot color with a 24k wash on a Tucson finish.[/b][/h4]

Walls finished with a pale gray, pale mushroom, sage green or pale taupe work well for diamond or presentation rooms — basically anything that doesn’t have gold or yellow in the color, says Ruth Mellergaard, a principal at interior design firm GRID/3 International in New York. “In the showroom, we have found fewer problems with the walls but definite problems with the ceiling. A white or off-white ceiling is by far the best over diamonds so that there is no negative reflection, i.e., yellow, and so that the most light reflects back into the cases and onto the customers and merchandise,” Mellergaard says.

[span class=note]This story is from the June 2011 edition of INSTORE[/span]

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