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How to Work On the Business, Not In It … and More Tips for May

Plus safer jewelry shipping, and the broadcast media you should be using.

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MANAGEMENT

I keep reading I should be working on the business, not in it. But just how do I make the change?

The secret is in attaching a value to your time and using this to guide your decisions. First work out what your time is worth. If your sales target is $1.5 million a year then divide this number by 2,250 (assuming that you’ll be working 45 hours a week, 50 weeks a year). Now you know the only way to reach your sales target is if you’re involved in activities and/or decisions that generate $670 per hour for the store. This figure alone should make you drop the squeegee and call your neighbor’s kid to see if he wants to make some extra money cleaning windows.

Second, do a daily tracking report of all your activities in 30-minute increments for several weeks. With this log you will be able to see what is sucking up most of your work hours. You may well find that more than 50 percent of your time is being consumed by trivial and unproductive work. Lastly, prioritize what’s important and start delegating a few tasks each month. Then it’s time for the fun stuff: focusing on marketing campaigns, big sales and the new products and relationships that generate the big bucks.

PROMOTIONS

I’d like to send out a monthly newsletter to my customers, but to be honest, an interesting mailer that won’t get immediately trashed looks like too much work. Are there shortcuts?

Go directly to Google, also known as shortcut heaven, and type in “jewelry” or “fashion” and “free reprint articles.” Within seconds, says Frank J. Rumbauskas Jr. author of Never Cold Call Again, you’ll have a mass of jewelry-related content to choose from that will make your newsletter a worthwhile read and you a fashion consultant in the eyes of your customers. Second, find a professional mailing service like www.aweber.com, which, for about $20 a month, will automate the entire sending process, giving you access to newsletter templates as well as managing follow-up and taking care of CAN-SPAM compliance.

MAILBOXES, ETC

What’s the safest way to ship jewelry?

Jewelers Mutual offers this five-step guide: 1. Pack the jewelry in a cardboard box marked with the return address and tracking number; 2. Place this parcel in a larger box from the delivery service or in a sturdy, unmarked shipping box (no smaller than a shoebox); 3. Surround the inner box with packing material; 4. Seal the outer shipping box with gummed, reinforced-paper mailing tape or pressure-sensitive shipping tape. Write the tracking number on the box. (Disguise address information so there are no references to jewelry); 5. Require a signature on delivery, using registered mail whenever possible.

COMPUTER SECURITY

The media is full of stories about hackers attacking big corporations. As a small-business owner do I have much to worry about?

If cyber-crime had a color-coded alert system a la terrorism it would be glowing a warm red. According to industry estimates there were an average of 33 million attacks a day last year and the figure is growing. And while it’s true hackers prefer the big game — less than 1 percent of industrial hacking is targeted at small business, according to cybersecurity firm Symantec — the impact on mom-and-pop businesses can be far greater. To reduce the likelihood of attack, pass credit-card data directly to a processing company rather than storing it on your own store PC. Another imperative is to install firewall software on every computer, and keep the antivirus software current. If you have a wireless network, you should use the latest wireless data encryption standard, called Wi-Fi Protected Access. And employees should have access only to the systems they need to do their jobs. Sadly, it is not unusual for the crooks to be current or former employees. Finally draw up clear policies about not downloading suspicious e-mail attachments and free software. 

ADVERTISING

When you buy broadcast media, how do you decide what station to buy and what program?

Contrary to popular belief, says marketing expert Ellen Fruchtman, you should not purchase your media based on what you watch or listen to, but rather on what your target customer is watching and listening to. And, the best way to assess that information is to utilize Nielsen and Arbitron research. These ratings are available only to subscribers who are typically actual broadcast stations and agencies and the data can be quite expensive. Neilsen and Arbitron research will tell how many viewers or listeners there are for each station and show. Then you factor in the cost to determine the effectiveness of buying each program. A highly rated show is good only if the price is reasonable. That leads us to Cost Per Point (CPP). A CPP is the cost to reach 1 percent of the demographic you’re looking to reach. The lower the CPP the more effective use of the dollars. Then common sense comes in to play. A show may be highly rated but not suited for your brand.  

PUBLIC RELATIONS

I’ve tried sending press releases about my store to my local newspaper but with no luck. What am I doing wrong?

It’s probably a lack of research. It’s so easy now for anyone to bombard a newsroom with blind press releases, which inevitably get trashed by the first gatekeeper. You need to do your homework on the Internet, advises Jeff Crilley, the author of Free Publicity. Find out which reporter covers small business or fashion or whatever your angle is and pitch them your story. Then it’s a matter of following up with the press-release basics: Short catchy headline, engaging first paragraph and then the “who, what, where, when and how” details of why your event is newsworthy. “As you write that first sentence, you should be able to imagine your favorite TV anchor reading it word for word,” says Crilley, an Emmy Award-winning TV reporter.

Over the years, INSTORE has won 80 international journalism awards for its publication and website. Contact INSTORE's editors at editor@instoremag.com.

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What to Do with a Conservative Business Partner, How to Set Goals You Can Achieve and More of Your Questions Answered

Plus, how to get your staff to actually listen more.

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Apart from telling them to talk less, how do I actually get my staff to be become better listeners?

Robin Dreeke, a former head of the FBI’s Behavioral Analysis Program, says the secret lies in an appreciation that good listening is more than simply shutting up. “Listening is having nothing to say. There’s a difference there. If you just shut up, it means you’re still thinking about what you want to say. You’re just not saying it,” he writes in It’s Not All About Me: The Top Ten Techniques For Building Quick Rapport With Anyone. The reason is that customers can tell you’re not focused on what they are saying. Instead, Dreeke suggests, do this: “[A]s soon as you have that story or thought you want to share, toss it. Consciously tell yourself, ‘I am not going to say it.’ All you should be doing is asking yourself, ‘What idea or thought that they mentioned do I find fascinating and want to explore?’” Get your sales staff or jewelry designers to take such an approach in their interactions with customers, and the results could potentially be revolutionary. No sales pitches. Just responding to what customers are telling them. That’s listening.

Year after year, I’ve carefully plotted SMART goals for my staff, but we never attain them. Any idea what we’re doing wrong?

To the rational mind, it’s hard to argue with the SMART mnemonic — Specific, Measurable, Achievable, Relevant, and Timely — when it comes to goals. At the heart of it is “achievable,” after all. Except, of course, when it comes to managing humans, it’s best to be wary of anything that gives off the clinical odor of rationality. In the place of SMART goals, we thus propose an experiment for you: This year, try some Vague and Seemingly Irrelevant goals (yep, the sort of targets that can’t even be counted on to form a clever acronym). Clear goals such as “Increase sales by 20 percent” can be motivating, but also set extra hurdles to fail at, which can throw the human mind into a tizzy (like a yellow Post-it sticker on your mirror that says “Don’t eat a cream bun today!”) Vague goals, on the other hand, can be liberating. As for “seemingly irrelevant,” the key word is the first: “seemingly.” This is management at a higher level. Identify the secret drivers to business success, be it the cheery baristas at Starbucks or actions in your store that result in a positive review on social media, and you may actually get the specific financial results you desire. In his book The Antidote: Happiness For People Who Can’t Stand Positive Thinking, Oliver Burkeman recounts the story of a Formula One pit crew whose members were told that they would no longer be assessed on the basis of speed targets; they would be rated on style instead. Instructed to focus on acting “smoothly,” rather than on beating their current record time, they wound up performing faster. It’s a seductive story. Could you do the same with your staff?

What’s a good rate of growth to aim for?

Some growth is necessary for any business to keep up with competitors, benefit from economies of scale and provide new opportunities for its people, but there are more important things you should probably be focusing on. As Brazilian businessman Ricardo Semler noted in his book Maverick, the only things in the world that grow for the sake of growth are businesses and tumors. “Growth needs to be balanced with margin, operating expenses and inventory levels, otherwise it can result in working harder but having nothing to show for it,” notes David Brown of the Edge Retail Academy. Worry about cash flow, profit, taking care of your staff and customers, and basically just doing a good job. Growth should then take care of itself.

I had an embarrassing encounter with a customer earlier this week, and now I can’t get it out of my mind. It’s tormenting me. Help!

The old-school psychoanalyst would say we need to revisit this in punishing detail (these thoughts of perfection, where do they come from?), but it doesn’t sound like you want to go there. In place of that approach, we recommend substitution (come up with a funny version of the story) or distraction. The latter gets a bad rap, but recent studies have shown it’s actually pretty effective. Want to forget that screw-up at work? Do what Gary Gordon of Samuel Gordon Jewelers used to recommend after a sale went badly and go polish silverware for 30 minutes. Or start plotting a complex dinner tonight. Your brain has trouble focusing on more than one thing at a time, so a new action interferes nicely with recollection. And running the same movie reel over and over in your head really helps no one.

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Handling the Salesperson Who Bombed at Christmas and More of Your Questions Answered

Plus, what’s a fair repair warranty?

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After reviewing my sales team’s performance over the holidays, I found I have one who underperformed. She’s a lovely person and tries to implement the training we give her, but her numbers just don’t improve. Do we just persist with training?

It sounds like she has the right attitude and work ethic to succeed, just not in sales. Almost anyone can learn how to describe a product’s features (the knowledge), they can even learn how to ask the right open-ended questions to elicit a customer’s exact needs (a skill), but they’ll never learn how to push that prospect to get excited about jewelry and to commit at exactly the right moment. That is a talent some people just seem to be born with, says Marcus Buckingham, a leader of the play-to-people’s strengths school of business management. “In the minds of great managers, consistent poor performance is not primarily a matter of weakness, stupidity, disobedience, or disrespect. It is a matter of miscasting,” he says. You’ll be doing both your store and this woman a possibly life-changing service by forcing her to apply her talents and strengths in some other field.

Any thoughts on how to breathe some fresh air into our business? We need to shake things up.

Every good idea requires not only a fresh catalyst, but also a new way of looking at things. In the words of design consultant Tom Kelley, you want to achieve “the sense of seeing something for the first time, even if you have actually witnessed it many times before.” That explains the success of asking new employees (about a month after they’ve been added to payroll) what changes they would make to the way your store is managed. Constraints, such as radically slashing a budget for a certain department, are another well-proven way of generating new ideas and inspiring creativity. Reconsidering an issue in a different physical context seems to help, as does picking some specific type of person — a doctor, an astronaut or a historical figure — and imagining what they’d do in your situation. The key is to shift perspective as randomly as possible.

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What is an acceptable warranty on a customer’s repair?

A one-year warranty on repairs from defect is the norm, according to Blaine Lewis, a master diamond setter and metalsmith. “For example, to replace a Tiffany head in four or six prongs, your store would guarantee the setting and the stone for replacement up to one year from service if, with normal wear, a problem occurs. The warranty should state that the guarantee is not applicable if abuse beyond normal wear is at fault.” Lewis says to make sure your repair prices are high enough to let you provide a strong guarantee, which can give you a competitive edge. Keep in mind that while you do offer a strong warranty, you’ll find that you seldom have to honor it (and maybe never if you’re really, really good).

Should I encourage my sales staff to use mimicry to build rapport with customers? It seems too obvious and manipulative.

If you’re worried about getting caught, take comfort in studies that show that most shoppers are actually really bad at noticing it. In his book Honest Signals: How They Shape Our World, Alex Pentland cites research showing subjects identified mirroring of their words and body movements only about 10 percent of the time and mostly only when it was a really unusual gesture. The students also liked the mimicking agent more than a neutral one, and rated him or her as being friendlier as well as more interesting, honest, and persuasive. Just adding mimicry, the research found, made a sales pitch 20 percent more effective. We humans like people who are like us, and whether it’s social background or word choice, emphasizing this similarity improves social relations. Besides, if your salespeople are paying such close attention to everything a customer is saying, they may just discover exactly what it is that customer is after and provide excellent service, which can’t be a bad thing.

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How To Decide Between Equal Job Candidates, Splitting Staff Chores and More of Your Questions Answered

Plus how to market your engraving capabilities.

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I have two good candidates for the position of sales associate, but I can’t decide between them. Can you suggest a tie-breaker?

Toss a coin and let fate be your arbiter. If they’re both equally appealing candidates and you can’t reduce the uncertainty by doing further research or interviews or trial runs, then your decision doesn’t much matter. That likely sounds like rash advice, but this paralysis you’re experiencing has a name: Fredkin’s Paradox. The computer scientist Edward Fredkin summed it up as, “The more equally attractive two alternatives seem, the harder it can be to choose between them — no matter that, to the same degree, the choice can only matter less.” To be sure, it will probably turn out to have mattered in hindsight, but by then it’ll be too late. Given that you’re unable to know how things will turn out, overthinking this one — or any similar tough choice — is futile.

How do you share the chores among sales staff fairly and in a way that is easy to enforce?

Store consultant David Geller suggests breaking your staff into groups and rotating the responsibilities. “Put some easy chores with some bad ones like vacuuming and cleaning the bathroom,” he recommends. The people whose names are under the different groups of chores (see table) do them for only one week, and then they move onto the next group of tasks. This shares around the bad and light chores and also makes it easy for the store owner to raise the issue when a job needs doing. “After doing this, I no longer complained to a person; I complained to a group,” Geller says. “If I go out and see the glass in a showcase is dirty, I don’t expect everyone to clean it, just Group 2.’”

I recently purchased an engraving machine. Any ideas on how I can market it?

One of the biggest mistakes jewelers make is keeping their engraving machine in the back room, says Annette Peloquin, marketing manager of Signature Engraving. Putting the engraving machine in the front of your store, even if it’s just for special events like Mother’s Day and Christmas sales, has a “curiosity” factor that will attract new clients into your store. Also, regular direct-mail pieces with coupons or discounts on engraving services are another way to promote your services. “Be sure to aggressively promote the wide range of engraving possibilities,” such as logos and photos engraved on charms, she says. Hand out flyers to bridal shops and bridal planners that may wish to engrave picture frames or champagne glass or guest book foiling. Also, says Peloquin, engraving corporate gift items for small-to-medium-sized businesses can be another lucrative sideline.

I found a honey of a deal at an estate sale, but I’m worried about paying so little for a piece worth far more. Are there any state or federal laws regarding the purchase of jewelry that is marked at a grossly understated value?

While laws vary widely between different states and municipalities, Elly Rosen of the AINetWork’s Gems & Jewelry Trade Reference says, “We may seek guidance from the general principles involved.” For Rosen, the simplest answer is that “we can buy as low as we wish and make as much profit as we can … so long as we do nothing to deceive or take advantage of the seller.” Estate sale buying is the easiest to answer as it’s a free and open public sale with the seller in control. In such a situation, Rosen says, “We can offer as low as we wish and it’s their option to accept. If it’s an auction and our low bid gets the hammer — it’s ours to resell at whatever profit we can fairly obtain. If we’re on the street and someone offers to sell an item far below its value, we can accept their offer. We don’t know each other, so there’s nothing leading them to believe we have special knowledge they might otherwise rely on.” However, when buying over the counter in your store, things change. “[Customers] may believe they can rely on our knowledge, so greater care is needed not to say or do anything implying low value. They ask for $50 for a $1,000 item, we can accept their offer.”

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