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Ask INSTORE: March 2006

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Sleuthing out employee theft, the insurance implications of children’s playrooms, and advice on charging to cut off a customer’s ring.

[h3]Deterring employee theft[/h3]

[dropcap cap=Q.][h4][b]How can I solve an employee theft?[/b][/h4][/dropcap]

[dropcap cap=A.]”Ninety percent of all business theft is somehow related to the people who have the most opportunity – the employees,” says Steve Cotner of Corporate Intelligence Consultants. When trying to solve an instance of theft, he recommends the following:

Refrain from involving employees in the investigation. They may have caused the theft or have knowledge of who caused the theft.
• Discuss all decisions with your business attorney.
• Don’t wait to investigate. The longer you wait, the less detail is available to bring the investigation to a positive outcome. Document everything.  
• Check company surveillance cameras. If you don’t have video documentation or sworn witness statements, the likelihood of a successful investigation will be reduced.
• You may suspend the suspected thief pending the outcome of the investigation. Collect keys, change alarm codes and revoke computer access.

After the investigation is complete, perform an evaluation of the crime. Reviewing the results of the investigation should reveal what procedures need to be installed to make it more difficult for this to occur in the future.[/dropcap]

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[componentheading]INSURANCE[/componentheading]

[contentheading]Pay to Play[/contentheading]

[h4][b]I heard insurance companies will raise my premiums for having a kid’s playroom. Is this true? If so, how can I try to keep an increase in premiums down?[/b][/h4]

Most insurance companies charge an additional premium for children’s playrooms due to the increased risk of injury. Parents are often quick to sue when their children are hurt. According to Sue Fritz of Jewelers Mutual Insurance, the amount of the surcharge depends upon factors such as the items in the play area, the size of the play area, whether the area is supervised, and whether food or beverages are served.

That said, Jewelers Mutual insures a number of playrooms for no additional charge. These playrooms may include a toy box, TV and videos/DVDs, books, large-sized Legos, etc. An indoor playground with slides, swings, or trampolines is a different matter. “Work with your agent and insurance company to design an area that meets your customers’ needs without increasing your insurance premium,” suggests Fritz. Jewelers Mutual offers design assistance to its policyholders at no charge, whether for a playroom, remodeling project, or new construction.

[componentheading]MARKETING[/componentheading]

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[contentheading]Direct Route[/contentheading]

[h4][b]How can I improve my direct mail copy?[/b][/h4]

According to Al Lautenslager, author of The Ultimate Guide to Direct Marketing, you can vastly increase your response rate by following a few simple guidelines in your direct mail copy:
• Use short copy to tease the reader to read further or respond  
• Minimize the use of buzz words  
• Prove any claims with details to add credibility  
• Make your offer easy to understand at a glance  
• End pages in the middle of a sentence to encourage more reading  
• Keep paragraphs short  
• Break up long copy with graphics or white space  
• Don’t dwell on history or background
• Always put a sense of urgency and deadline in your copy  
• Create excitement: “Act Now!”, “For a limited time!”, “Hurry while it lasts!”
• Have a call to action at the beginning, middle and end of your copy
• “Free” is still a motivating word-use it and highlight it
• Restate your offer often, especially at the end of the communication  
• Use a “P.S.”- it’s one of the most frequently read parts of the copy

[componentheading]SALES[/componentheading]

[contentheading]Either/Or[/contentheading]

[h4][b]Is it better to have an employee with great product knowledge and no sales skills, or a person with no product knowledge and great sales skills?[/b][/h4]

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“Truth be known, you probably wouldn’t want either of them,” says Dave Richardson, sales consultant and author of the new e-book Managing a Growing Store in a Highly Competitive Marketplace. However, Richardson says that if push comes to shove, select the salesperson with no product knowledge. His reasoning: “You can always teach a good salesperson product knowledge, but it’s a lot more difficult to teach someone with a wealth of product knowledge about persuasive selling skills.” And in retail, closing sales is the name of the game.

[componentheading]STAFF[/componentheading]

[contentheading]Laser Learner[/contentheading]

[h4][b]I just purchased a laser welder and want to set up a training regimen for young new hires. What do you suggest?[/b][/h4]

“Training new hires on how to use your store’s new laser-welder starts with the store owner taking good notes during the manufacturer rep’s presentation,” says retail jeweler Chris Snowden, owner of Snowden’s Jewelers in Wilmington, NC, and laser aficianado. (Read his column “Laser Blast” in February’s INSTORE.)

According to Snowden, the first task new trainees should learn to do is weld jump rings. It may not sound like much, but they will be able to accomplish many jobs with this one skill. Most repair shops are loaded with these “menial” tasks, such as adding charms to a charm bracelet, or putting clasps onto chains and bracelets. The next task for them to tackle (usually within a couple of days) is welding broken chains. These two tasks should be enough for beginners in their first month.

The next step is to train them on ring sizing, and then finally on prong re-tipping. Most people can apply these skills to unusual jobs like welding a handle back onto a pewter baby cup, or replacing and welding a solid pin back into a watchband. With your new laser, the repair possibilities are almost endless.

[componentheading]SALES[/componentheading]

[contentheading]Going, Going …[/contentheading]

[h4][b]What’s the best way to respond to a customer who says, “I’m not interested?”[/b][/h4]

One thing you should not do is thank the customer and watch him or her walk out of your store. Despite their statement, you may still close this sale, says sales trainer Dave Richardson. “Try asking your customer a few questions and who knows what might happen,” he advises. He recommends asking the customer one of the following:
• “I appreciate your very frank comment; may I ask you why you’re not interested?”
• “Is it that you’re not interested now or not interested at all? Would it be better if I touch base with you next month when things are less hectic for you?”
• “Is there some aspect of this necklace that I didn’t fully explain to you or something that you’re looking for that I didn’t fully understand?”
• Just don’t give up, says Richardson. “Take the words as a challenge to stay in the game and see what you can do to resurrect a potentially lost sale.”

[componentheading]CUSTOMER SERVICE[/componentheading]

[contentheading]Cut-off Point[/contentheading]

[h4][b]What should I charge to cut off a customer’s ring?[/b][/h4]

Not a penny, says Tony Aalund of Jeweler’s Bench (Kingwood, TX). “Most people who need to have their ring cut off are in a bit of a panic,” says Aalund. “They’ve been trying to get the ring off for days, with no success. Most have thought about going to the emergency room, but we all know how expensive that is.” Barry Nicholls of Paradise Jewelry (Naples, FL) offers another reason. “I want to accept no liability. If it’s free, my exposure is a lot less,” he says. He has customers sign a release before he’ll cut off the ring. Be sure to explain the process before you begin, advises Nicholls. “Once I had a lady cut herself badly trying to remove the ring after I cut it, but before I bent it open. That cutter often leaves a razor edge sticking up,” says Nicholls. Most people are very appreciative, says Aalund. “We tell them it’s no charge to cut the ring off, and if you want it repaired and sized to fit correctly, we will be happy to do that. Almost all of them leave the ring.”

[span class=note]This story is from the March 2006 edition of INSTORE[/span]

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How to Promote Healthy Competition and More Of Your Questions Answered

It all depends on how you present it.

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How can I promote competition among staff without it turning my store into the setting for Lord Of The Flies?

The key to fostering healthy competition, according to new research done by a team at Harvard Business School, lies in how you communicate the competition. When employees feel excited, they’re more likely to come up with creative solutions and new ways to better serve customers. When they feel anxious or worried they might lose their job or be publicly humiliated in some way, they’re more likely to cut corners or sabotage one another. Leaders can generate excitement by highlighting the potential positive consequences of competition (such as the recognition and rewards that await outstanding performers) rather than creating anxiety by singling out and highlighting low performers (think of the steak knives scene in Glengarry Glen Ross).

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We want to lay off a sales associate, but we’ve never done it before. If we are to give them “a month’s pay,” does that mean their base pay, or do we factor in their average commission earnings as well?”

Suzanne Devries, president of Diamond Staffing Solutions, says that legally, you’re required to give them only the vacation, sick and personal days they have accrued, although she recommends that you base your decision on how valuable an asset this person has been to your organization, and how long they have been with you. “If it’s a long time and they have been loyal, you should definitely consider a certain amount of days per year. Second, make sure you have documentation that states why you are having layoffs.” She also advises you do an exit interview and have the person sign documentation stating that they understand why “they are part of a force reduction.” An important thing to keep in mind is how other staff will view this. They will want to know that they will be treated fairly even when times are tough.

I keep hearing contradictory advice: Set goals or don’t set them. What’s your take?

There are three main arguments against setting goals: One, that they can lead people to focus on the wrong things (by, for example, becoming too aggressive in chasing sales targets) or cut ethical corners; two, that they become demotivating when it becomes clear they can’t be reached; and three, that it’s healthier to live your life focused on the present. The secret to smart goal setting, then, is to do it in a way that addresses these problem areas. That means:

1. Set challenging goals, but don’t make a big deal of it if someone falls short.
2. Structure goals that focus on behaviors, so your people are learning and improving, rather than wildly chasing a financial goal.
3. Be specific. Setting vague goals can produce higher rates of success with motivated staff, but if your employees are normal human beings, being specific will prevent procrastination.
4. Make the first couple of milestones easy so that people can build momentum toward the major goal. Progress is a huge motivator.
5. And finally, don’t make goals a death march; have fun trying to accomplish them.

I’d like to hire a trainer, but I’m worried about the return on investment. How can I be sure it will be worth it?

To really get your money’s worth, you need to focus on two things: 1.  Hard skills. Overinvest in training that helps to increase ability, rather than motivation. Focus on small but vital aspects of your staff’s sales skills. It could be when to pause in a presentation, how many features to stress, or phone manner tips. Break tasks into discreet actions, practice within a low-risk environment and build in recovery strategies. 2. And this is just as important: Follow up. Bring in a trainer, but only if you yourself are willing to buy into their lessons and do ongoing training and reviews.

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How to Be Safe at Company Parties, the Best Interview Question for a Prospective Hire, and More of Your Questions Answered

Plus how to avoid becoming a mediocre business.

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How do I lift my store out of the rut of mediocrity?

According to work by the Brigham Young business school on high-performing teams, peers manage the bulk of the heavy lifting when it comes to maintaining standards. But how to get to that almost mythical land of self-enforced high standards?

Joseph Grenny, a social scientist and author of Crucial Accountability, says there are four leadership practices that can help:

1. Start by showing the consequences of mediocrity to connect people with the experiences, feelings and impact of bad performance. Keep the issue alive by telling stories that illustrate work well done and the real human cost of shoddy work, such as lost diamonds, ruined weddings and upset customers.

2. Set clear goals and explain why they are important. “Use concrete measures to make poor performance painfully apparent,” says Grenny.

3. Establish peer accountability so that people feel comfortable challenging one another when they see mediocrity. Regular weekly reviews can provide opportunities for mutual feedback and establish peer-accountability as a norm, Grenny says. It’s key that your store becomes an environment where everyone feels entitled to challenge anyone if it is in the best interest of the business.

4. Be quick to defend the high standards. A chronic poor performer is a clear impediment to the goals you’ve set. How you handle this situation will let your team know whether your highest value is keeping the peace or pursuing performance.

“When you ask a group to step up to high performance, you are inviting them to a place of stress — one where they must stretch, where failure is possible, where interpersonal conflicts must be addressed,” says Grenny. “If you shrink from or delay in addressing this issue, you don’t just lose that person’s contribution — you send a message to everyone else about your values.”

I’m planning my company party, but one concern is that somebody might get drunk and have a car accident. Got any advice on protecting myself?

Concerns about liability for alcohol-related incidents, sexual harassment, and workers’ compensation claims have led many companies to forgo holiday galas entirely. You don’t have to. But if you’re really afraid, lawyer Anil Khosla, writing in Inc. Magazine, suggests the following steps to reduce your liability: “1. To distance the business from the party, make it an entirely social event, don’t invite clients or vendors, and make sure employees know that attendance is voluntary. 2. Plan accordingly. Hold your gathering off-site, if possible. That may shift some of the potential liability to the hotel, restaurant, or caterer. If you must have an on-site party, hire an independent caterer. Don’t permit anyone from the company to serve alcohol, and instruct bartenders to stop serving anyone who seems inebriated. Lawyers advise avoiding an open bar— or, at the very least, limiting it to the first hour. Also, close the bar at least one hour before the party ends. 3. Consider providing transportation to and from the event. Make sure that cabs will be available, and appoint someone to suggest cab rides home for people who have had a few too many.”

How do I tease out a prospective hire’s innate strengths during the interview process?

The indirect method is often best when it comes to getting at a prospect’s true strengths. Marcus Buckingham, a leader of the strengths-based school of business management, suggests asking this question: What was the best day at work you’ve had in the past three months? “Find out what the person was doing and why he or she enjoyed it so much,” he says, adding it’s key to keep in mind that a strength is not merely something someone is good at. “It might be something they aren’t good at yet. It might be just a predilection, something they find so intrinsically satisfying that they look forward to doing it again and again and getting better at it over time.” The theory is that the best businesses are those that fully leverage the strengths of their employees as opposed to trying to fix up their weaknesses.

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How to Tell When that Struggling New Hire Can’t be Saved, and More of Your Questions Answered

Also, the Golden Rule of Triggers and a better way to set goals.

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I got really angry at a customer the other day and left a pretty rude message on their voicemail. So, OK, I’ve lost that client. But how can I keep this from happening again?

If you feel that anger management is an issue that’s affecting many parts of your life, go see a mental health professional. However, if you’re like the rest of us, and anger is more a cause for periodic embarrassment or regret, we fully recommend business author Tony Schwartz’s Golden Rule of Triggers, which is “Whatever you feel compelled to do, don’t.” Instead, he says, take a deep breath, and “feel your feet” — a distraction tactic that allows you to pull your head out of the red mist. You can no doubt remember occasions when you’ve told yourself (or others) to “take a deep breath” or to “count to 10” before exploding in rage. What Schwartz’s rule removes, though, is the need to reflect on whether we’re in such a situation. Instead, it recommends interpreting any sign of compulsive behavior as an indication that the action is probably imprudent. Rather than battling compulsion, his rule co-opts it as a warning system. The Golden Rule of Triggers may seem ridiculously simple, but in that tiny gap between the total grip of “flight or fight” survival mode and doing something you’ll regret, more likely to be an ill-considered email or text message these days, simple rules are all you’ll be capable of following.

How do you know when a new employee can’t be saved? How much time should you give someone?

When you have coached someone carefully and repeatedly, invested large amounts of energy and they show no signs of improvement, that’s a solid signal you probably need to act. The clincher comes when their co-workers start showing their frustration and stop trying to help the person. This is often at about the three or four month mark. A lot of bosses will let it drag on past that, but it’s really in everyone’s interest for both parties to pursue new opportunities.

What should I do if I think my store is being “cased”?

There are several immediate steps that can reduce the likelihood of a robbery or burglary. Jewelers Mutual offers the following advice. First, alert your employees by using a pre-established code word or phrase. When that happens, your employees should take the following steps:

1. Have an employee with a cellphone leave the store to observe from a safe distance.
2. Make more employees visible on the sales floor.
3. Write down the description of any suspicious people and, if possible, their license plate number.
4. Make sure cabinets, showcases and safes are locked.
5. Greet the individuals and attempt to engage them in conversation. If they are robbers, your attention will be unwanted and they will leave.
6. Call the police and ask them to visit your store as soon as possible. Explain that you think your store is being cased for a potential robbery or burglary.
7. Store customers’ merchandise in a safe place out of sight.
8. Review procedures to follow should a robbery occur — stay calm, do not resist, obey the robber’s orders, do not say or do anything unless you are told to do so.

Morale is bad and moaning seems to be part of our culture. Any ideas on how to turn it around?

Bring an upbeat attitude to the store every morning and make it clear you expect the same positivity from your charges. In this new era, it’s expected your employees will take responsibility for their own happiness and effectiveness. For truly disgruntled staff, there’s not much a manager can do except to make it known they are on the wrong bus. (And it’s often a couple of bad seeds that will set the toxic tone for a store.) A jewelry store is no place for people who throw their hands up in the air and declare, “This place sucks!” at every setback.

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