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Gratitude for the Unexpected Handwritten Thank-You

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It’s a rare occasion when I receive a handwritten letter or card in the mail. I’d estimate I get fewer than 10 each year, mostly from family members and close friends around holidays and birthdays. I particularly appreciate the ones from my grandparents, who still send me Halloween greeting cards with cartoonish lettering and ultra-cheesy punchlines that are clearly intended for children. The front of my last card read: “I have this haunting feeling that I’ve wished you Happy Halloween before.” The inside read: “Déjà Boo.” My grandmother then wrote a short note, signing her and my grandfather’s names to it. I kept the card because I’m a sucker for a good pun, and also because throwing away my grandmother’s delicate script would have felt like a criminal thing to do.

Jesse
Burkhart



Contributing writer for INSTORE.
I

t’s a rare occasion when I receive a handwritten letter or card in the mail. I’d estimate I get fewer than 10 each year, mostly from family members and close friends around holidays and birthdays. I particularly appreciate the ones from my grandparents, who still send me Halloween greeting cards with cartoonish lettering and ultra-cheesy punchlines that are clearly intended for children. The front of my last card read: “I have this haunting feeling that I’ve wished you Happy Halloween before.” The inside read: “Déjà Boo.” My grandmother then wrote a short note, signing her and my grandfather’s names to it. I kept the card because I’m a sucker for a good pun, and also because throwing away my grandmother’s delicate script would have felt like a criminal thing to do.

But every blue moon, I get a handwritten note that I wasn’t expecting because a holiday was around the corner. I don’t value one handwritten expression over another based on whether I was expecting it or not; the level of sincerity is the only thing that matters. But still, the unexpected ones produce a certain warming effect that the anticipated ones don’t.

I recently received an unexpected thank-you card from the small music studio at which I’ve been taking piano lessons for the past year. After I read the card, I plum forgot that it had been that long. (By my playing, you’d never have been able to tell.) But the music studio was keeping track, and so they sent me this card in recognition of my one-year anniversary.

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The message is pretty simple, as you can see. And though it was awfully kind of the studio to call what I had been making “music,” the words themselves weren’t what I appreciated most. I appreciated that the studio thought enough of my patronage to acknowledge it with what’s considered an unconventional expression of gratitude in the year 2016. I had received physical mail from the studio before; it was usually the latest newsletter it sends to students. That’s what I expected when I pulled the envelope from my mailbox. But opening it revealed a pleasant surprise – one that compelled me to keep it in the same pile as my grandparents’ cheesy Halloween greeting cards.

Sincere, handwritten expressions of gratitude are a lost art in today’s increasingly digital and impersonal world. That’s nothing you didn’t already know. I only shared this anecdote as a reminder of how a personal touch can go a long way toward building customer loyalty. The next time you’re looking for a way to set your business apart from a competitor, remember that the ink still has yet to fade from the oldest page in the customer-service playbook.

 

 

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OVER THE COUNTER: EPISODE 4

Jewelry Store Owner Rewards Her Staff With the Ultimate Adventure

The owner of a new Colorado jewelry store gave her sales team a steep challenge. In this one-minute excerpt of the latest "Over the Counter", hear how the goal was set ... and learn what she did when they reached their goal. Catch the full podcast here.

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David Geller

If Your Sales Are Acceptable But You Have No Cash, Look At Your Inventory

It’s an extremely simple formula.

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“IF I MADE that much money, where the heck is it?”

After getting one’s tax return back from the CPA, this is the usual question. Jewelers often tell me they aren’t making any money when, in fact, most I help do make a profit in the store.

But making a profit and having money are two completely different things.

Let’s just talk jewelry sales. If you sell $500,000 and earn keystone, your gross profit is $250,000.

If expenses are $200,000, then your net profit is $50,000, which is 10 percent of sales. Awesome!

“But I have no money!”

Easy. Look at how much inventory you have. At keystone, the amount of inventory you should stock is about equal to your gross profit from selling jewelry. So, if your gross profit was $250,000, then $250,000 should be about inventory level. If inventory is $400,000, the extra $150,000 (which you’ve been overbuying for a few years) hits you in the behind.

Take that $150,000 “too much inventory” and divide by half to three-quarters (leaving either $75,000 or $110,000). Then go look at your QuickBooks or accounting program and add up your accounts payable, credit card debt, bank loans, and loans from owner.

And you’ll see excess inventory is equal to debt, give or take.

In the jewelry industry, a good inventory turn is 1.0 (one time per 12 months). For every month after 12 that stale item sits in the case, the selling price (at keystone) must be increased monthly by 4 percent to make the same amount of profit after a year. If an item cost $100 and sells for $200 and is a year old, then each month starting with month 13, you must add $8 to make up for the second year’s missing profit month-by-month. By month 18, you’d need to raise the price by $48. In two years, it would need to make you $200 instead of just $100. And just think: you could have invested that money into new inventory!

Note: If you have this kind of old inventory and have less debt, I’m betting you do a large amount of shop sales (which requires virtually no inventory) or buy/sell a lot of scrap. These are “free money” departments, requiring little inventory while throwing off good profits. But why work your tush off in one place to help pay for a debt-ridden department someplace else in the store?

Most jewelers think jewelry (including diamonds) doesn’t go out of style. Wrong. Jewelry goes out of money.

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David Brown

Why Warren Buffett Places So Much Trust in Emotional Currency — And How Your Store Can Get It

It’s time to create a “moat” around your prices.

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He’s long been considered America’s foremost investment guru, and given the returns achieved by his company, Berkshire Hathaway, it’s easy to see why. Understanding what Buffett considers to be a good business can shed light on how to improve your own business strength — to put, as he calls it, “a moat” around it to ward competition away.

Hearing his theory on business value is well worth doing, whether it’s his annual Berkshire Hathaway meeting or other snippets of advice the media shy guru may drop. It’s his take on business value from a commission investigating the financial crisis back in 2009 that recently caught my attention.

When asked about his investment in the ratings agency Moody’s, Buffett had the following to say:
“If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by a tenth of a cent, then you’ve got a terrible business. I’ve been in both, and I know the difference.”

Buffett went on to discuss his belief that good management can’t save a bad business, but a good business can continue no matter what management does.

Moody’s represented a case in point. Because of their duopoly with Standard and Poor’s as the benchmark of rating agencies, they effectively had a business with a moat around it. Even if a competitor came in offering ratings at half the price, both Moody’s and Standard and Poor’s had created a business that would not suffer. Price increases or decreases would make no difference.

In a jewelry industry where pricing competition often seems to be the only thing that customers are concerned about, it raises the question, “Can a jeweler successfully build a pricing moat around what they offer?” Moody’s and Standard and Poor’s perform a task that others can do but no one else can do it with the prestige of having their name attached — and that makes all the difference.

On the face of it, it may seem difficult to achieve this level of power when selling a commodity that can be purchased elsewhere — yet jewelry is an emotional buy. By definition, you should also be able to achieve an emotional moat around the association of your name to the process. Tiffany has achieved this — however, is what they are offering any different to what you or other jewelers able to provide? Does the customer gain any form of tangible benefit, or is it a feeling based on emotion?

Just because it’s intangible doesn’t mean it’s not real. The ability to increase prices and have your customers accept it because you are the only feasible option is priceless — the number one thing Buffett considers when investing.

If it’s worthwhile for Mr. Buffett to consider it for his major investments, it’s worth you considering for yours.

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Commentary: The Business

Put Yourself First and Cultivate Your Own Brand

Concentrate on custom and healthy vendor relationships to succeed in today’s jewelry retail environment.

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It’s time for independent jewelers to create their own brand identity by partnering with brands that respect and honor their relationships, and by doing whatever they can to build loyalty with custom design, whether or not they have in-house shops.

Larger stores possess the volume needed to buy branded products and the showcase space necessary to display them. Granted, branded products and their retailers have a rarefied environment, with packaging, advertising and a built-in national customer affiliation.

But Pandora truly changed the dynamic of the vendor/retailer relationship in the last decade by building their brand off the independent’s efforts. They demanded higher sales volume and reorder numbers, then removed underachievers from the supply chain. Many independents lost the branded customer base they had acquired.

Worse, once Pandora identified the larger established consumer markets, in a checkmate move, they established their own stores, thus selling directly to the consumer. Many retailers suffered serious financial losses with non-returnable inventory and had their reputations damaged with unfulfilled customer service requests.

Following in hot pursuit, several popular companies decided they could dictate to their retailers how much they had to spend and restock in order to keep their brands. But in the end, many of these demanding brands will diminish because trends and styles change!

The goal of a supplier-retailer relationship is to be both transparent and mutually beneficial. There are many companies that go the extra mile for their retailers. Find those, buy from them and remain profitable.

It’s also time for the independent jeweler to do everything possible to create their own following in the custom-jewelry wars. The popularity of custom has created a multitude of manufacturing jewelry stores showcasing their own products and increasing their own brand diversity.
Great local and online presence, along with professional training and an engaging and well-informed sales staff, allows your store brand to flourish. Self-branding, shameless advertising and polished elevator speeches help us gain and maintain our status in the community as the go-to jeweler.

 

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