A BIG PROBLEM IN our industry is that salespeople don’t know how to prove that the price on the tag is real. Many salespeople have gotten into a bad habit of showing lab-grown diamonds first because it’s an easy price point to sell. Selling a mined diamond takes diamond knowledge, sales skills and not having a poverty-level mentality. In other words, it takes a skill I call “value-added romancing.”
Negotiation is something that kills profit, cash flow, and sometimes even the ability to reorder the item because the profit is too low. Some stores just do a straight 10% off all the time — that’s $100,000 off every $1 million sold! That’s a huge amount of your year’s operating dollars. Some use negotiation as a cheap tool to close the sale: “I’ll take 10% off if you buy it now.” They don’t believe they can sell it for the price on the tag.
Some think some clients are more important than others, so they want to give them a good deal. The term “good deal” should never be used in a high-quality jewelry store. You’re not working in a pawn shop. The next time the client comes in, they will want even more of a discount; it’s a never-ending problem. Some clients find out you do negotiate but you didn’t negotiate with them, so now they know you think some clients are more important than they are.
Stores that sell at the price on the tag have a higher closing ratio than those that negotiate the price. Some even come in pre-closed because they know you don’t play with the dollars.
How do you solve this? First, have sales meetings and teach all of your salespeople how to use value-added romancing statements. These are interesting facts and truths about the item being sold, which change the client’s idea about the value, quality and price of the item. A value-added statement is something like, “It takes a million diamonds mined to get one gem-quality one-carat.”
Using statements like this make price objections disappear by proving the price is real. When the client says, “What’s your cash price?”, respond “It’s the same if you use check, card or cash. Which method do you prefer?” Show no signs of negotiation. Some ask if you will throw in the tax. Respond, “No, we don’t charge for tax — we’re a collection agency for the U.S. government and we have to pay the tax, just like you do.”
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When you say the price, say it correctly: “Do you realize this is only sixty-nine fifty?” It sounds professional, and you’re not making it about the money, you’re making it about the client, the reason they came in, and the item. If you get to the price and the item is $15,000 and they say it’s more than they want to spend, professionally say, “Is there a number you’re comfortable with?” (Never ask “how much do you want to spend” or “do you need financing.”) They may say $10,000, then you say, “I can do that for you. The 1.5 you want, we can go down to a 1-carat at the same quality and do $10,000.” They say they like the 1.5 better, and you say that one is $15,000. That’s called option negotiation.
I did not change the price of the item. I changed the item to match the price they wanted to spend. This strategy upholds your integrity, the store’s integrity, and the item’s integrity.
Don’t play with the store’s money or your commission or the client’s money. They can decide how much they want to spend on their own. Don’t be afraid of the price, and don’t think the client can’t buy it. Northing is a lot of money because everything is affordable to someone. Remember: The more money it is, the less time it takes to sell it and the easier it is to close. No more negotiating.
