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As consumer demand for laboratory-grown diamonds grows, retailers wrestle with how — or even whether — to sell and market this new product.

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When Richard Kessler decided to sell laboratory-grown diamonds in his seven Kesslers Diamonds stores in Wisconsin and Michigan a couple of years ago, he jumped into the market with both feet. “We don’t do anything halfway,” he says. “We brought in a nice selection, trained our people how to explain the process and how they are the same as mined diamonds and how they are different.”hen richard kessler decided to sell laboratory-grown diamonds in his seven Kesslers Diamonds stores in Wisconsin and Michigan a couple of years ago, he jumped into the market with both feet. “We don’t do anything halfway,” he says. “We brought in a nice selection, trained our people how to explain the process and how they are the same as mined diamonds and how they are different.”

Within a month, Kesslers Newborn Created Diamonds outsold the company’s signature Kessler 81 diamond that debuted in 2005.

Now Kesslers cuts its Newborn Created Diamonds into the Kessler 81 faceting pattern, and three out of four customers choose the created version. “It’s amazing, absolutely amazing,” Kessler says. “We’re selling the living daylights out of these things and our competitors are telling everyone ‘You don’t want these ‘fake diamonds.’ The fact is they are taking hold.”
When De Beers announced on the eve of the JCK Las Vegas show in May that it would enter the laboratory-grown diamond market in September with Lightbox Jewelry — ungraded laboratory-grown diamonds set in 10K gold and sterling silver earrings and pendants — Kessler says many of his peers panicked, fearing prices on laboratory-grown center stones would plummet.

De Beers said it will sell its Lightbox diamonds by weight alone at $800 per carat, significantly lower than current market prices, which are generally about 30 percent below natural diamond prices. De Beers will market the line as a sparkly, stylish accessory that can complement an outfit, not a serious piece of jewelry to commemorate a momentous occasion.
“The guys I hang with were beside themselves,” Kessler says. “I wanted to take a wait-and-see attitude. But I don’t think De Beers is making a good business decision, and I think it’s a lose-lose for them. It can hurt the laboratory-grown diamond manufacturers, but it’s going to hurt De Beers at the same time on the mined diamond side. There’s little doubt that the price will come down. We’ve already seen some pressure. Prices were based on a percentage below mined diamonds. And mined diamonds have come down.”

These risks, however, are part of the business, he says. “We have the same business risk with the price of gold or platinum nose-diving,” Kessler says.

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Kessler says he’s able to reassure customers that whatever they buy will retain its value, at least in his store. His 100 percent trade-in policy might be crazy, he says, but it offers clients the confidence they crave. “So if the created diamond industry crashed to the ground tomorrow and consumers come in and say, ‘This thing is worthless,’ I can say, ‘No it’s not; you can trade that in for $3,000 and not pay an extra penny.’”

 

DEFINING DIAMONDS

Debbie Azar, president of GSI, which grades laboratory-grown diamonds, says despite the flurry of recent news coverage sparked by De Beers’ announcement, consumers remain confused about what laboratory-grown diamonds are and are not. “To clarify, laboratory-grown diamonds are not simulants (like CZ, moissanite, etc.). Laboratory-grown diamonds are, indeed, diamonds that share the same physical and chemical properties as natural diamonds.”

Richard Kessler: “It’s amazing, absolutely amazing. We’re selling the living daylights out of these things.”

Azar says both natural and laboratory-grown diamonds should carry grading reports from reputable gemological institutions in order to provide the consumer with the trust and confidence that their diamond is “what we say it is.” On July 24, the Federal Trade Commission’s jewelry guidelines were revised to include laboratory-grown diamonds in the commission’s definition of diamonds.

The FTC’s previous definition of a diamond was: “A natural mineral consisting essentially of pure carbon crystallized in the isometric system.” The new listing does not include the word “natural.” “When the commission first used this definition in 1956, there was only one type of diamond product on the market — natural stones mined from the earth,” the FTC said. “Since then, technological advances have made it possible to create diamonds in a laboratory. These stones have essentially the same optical, physical and chemical properties as mined diamonds. Thus, they are diamonds.”

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Despite the groundbreaking feel of this announcement, not much has changed in how laboratory-grown diamonds can be marketed to the consumer, says Tiffany Stevens, president of the Jewelers Vigilance Committee. Marketers still cannot call a laboratory-grown diamond a “diamond” without a qualifier — laboratory created, laboratory grown or (manufacturer name)-created. The term “cultured” can be used, but only in conjunction with another approved description. The FTC removed “synthetic” from the recommended language, and while it still can be used, it should not be used by a competitor to disparage another seller’s laboratory-grown products.

The FTC has also specified that the words “real,” “natural” or “precious” cannot be used in laboratory-grown diamond marketing.

If the conversation turns to green issues, caution is required there, too. You can’t just claim that laboratory-grown is the green option. The FTC green guides inform how these conversations should be conducted. “It has to be green or not; it can’t just be greener than someone else,” Stevens says.

But Jean-Marc Lieberherr, CEO of the Diamond Producers Association, says the new FTC Guides fail to provide the clarity needed to avoid more consumer confusion and deception, instead introducing unnecessary ambiguity.

Lieberherr says the DPA appreciates that the FTC still requires marketers of man-made stones to differentiate their product from natural diamonds. But Lieberherr expressed “deep concern” that the FTC has approved the qualified use of the term “cultured diamonds.” He says the majority of consumers mistakenly interpret “cultured” as a description used for natural diamonds. Lieberherr expressed surprise, too, by the wide use of the expression “mined diamonds” throughout the FTC Guides in lieu of “natural diamond.” Lieberherr says that “mined diamonds refers to an extraction process and not to a creation process, and the vast majority of the world’s diamonds will never be mined, making this an incorrect qualification.”

 

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INTRODUCING LIGHTBOX 

Steve Coe, general manager of Lightbox, says De Beers recognizes laboratory-grown diamonds aren’t going away. “You can’t put it back in the box,” Coe says. So, De Beers took a pragmatic approach and developed a line of jewelry based on the company’s consumer research.

That research confirmed that consumers confuse laboratory-grown diamonds with simulants. Once they do know what they are and how they are made, they like them, but prefer them for “lesser” gift-giving occasions, such as a Sweet 16 birthday, for self-purchase and for travel jewelry. But, according to the research, consumers still express a strong preference for natural diamonds for important occasions. “The other thing we heard was that consumers expected it to be a significantly lower price than natural diamonds,” says Coe. They decided to offer jewelry in the $200 to $1,000 range with laboratory grown diamonds in three colors: white, blue and pink.

Beyond whatever effects it may or may not have on the market, Lightbox is “absolutely” expected to make a profit. Coe says De Beers has a huge advantage because its division, Element Six, has been manufacturing diamonds for more than 50 years for industrial applications and has invested more than $100 million in research and development, which has led to advanced technology and capacity, allowing them to produce high quality laboratory-grown diamonds relatively inexpensively.
 “My personal view is that’s where laboratory-grown diamonds would have ended up in a few years’ time, so we’re just doing it now instead of later,” Coe says. “To be honest, this is like any manufacturing technology,” Coe says, citing the trajectory in the sales price of flat-screen TVs. “As technology improves and volume increases, prices always come down.”

Lightbox will initially be sold online, beginning in September. “Once we’ve got that up and running, we will have discussions with retailers about selling it,” Coe says. In the future, Lightbox plans to introduce other shades of blue and pink, and is experimenting with yellow, green and violet, which could be available within a few years. They’re also investing in a new manufacturing plant outside of Portland, OR, intended to significantly increase the volume of product they can supply by 2020.

Robert Smith: “I’m good friends with several growers, and I don’t think they’re going to stand idly by and let De Beers destroy their businesses. If they start a war, it could get really ugly and everybody’s going to lose.”

Suraj Mehta, director of Pure Grown Diamonds, a laboratory-grown diamond manufacturer, says De Beers’ announcement has not affected his pricing as business continues to grow unabated, particularly in bridal. “Ultimately,” he says, “retailers are realizing that it is a choice that consumers would like to have.”

Mehta disagrees with De Beers about the value proposition. “It’s extremely difficult to grow diamonds,” Mehta says. “When the consumer is shown the growing process and it’s explained that each diamond is unique and some diamonds are great and some are not great, it really fascinates them.”

Amish Shah, founder and president of ALTR Created Diamonds, says education is at the core of his product, and he produced a documentary film that retailers can use to demonstrate how created diamonds are grown. “We want to help the retailers’ associates understand that they ARE diamonds. Ones grown above the earth.”

Laboratory-grown companies provide grading reports, but De Beers has said it will not. Lightbox will be priced by weight alone. Coe says DeBeers sees no need to grade them, because once they pass the quality threshold the company has established, they are all nominally of the same “high” quality. “We just took the view that this is a manufactured product and one of the advantages is it’s pretty consistent,” Coe says. “With mined diamonds you get a huge range of quality.” Each will be inscribed with the Lightbox logo beneath the surface, inside the stone.

Edahn Golan, an independent analyst who specializes in the economy of the global diamond industry, says De Beers won’t grade laboratory-grown diamonds because it wants to completely kill diamond terminology in relation to laboratory-grown diamonds. But Golan, who has seen the product, agrees that it’s consistently clean with a great color.

Mehta says transparency offered by grading is very important to the consumer. “They’re not all alike,” he says. “They do come in all colors and qualities.”

Robert Smith of EM Smith Jewelers in Chillicothe, OH, says De Beers has a history of taking a sledgehammer to their competition. “I’m good friends with several growers, and I don’t think they’re going to stand idly by and let De Beers destroy their businesses. If they start a war, it could get really ugly and everybody’s going to lose.” “I think their aim is clearly to drive the growers out of business and then control the laboratory-grown market themselves; a strategy they have used often in the past. The control that De Beers has had over the diamond market has been a huge benefit to jewelry retailers for generations, but their hostile approach to this new challenge may be the death knell for the diamond business as we know it.”Golan suggests De Beers has proved diamonds can be grown less expensively and that U.S. retailers would be wise to demand lower prices from their own vendors. In effect, Golan says, De Beers entered the market to drive down the price and take on the growers who have made laboratory-grown an increasingly important category in the diamond bridal business. “Basically, they disrupted the disrupters,” he says. “That describes their whole strategy.”They are betting that strategy will completely change the game, he says. Golan believes De Beers will win that bet.

 

MILLENNIAL APPEAL: PRICE, SIZE & TECHNOLOGY

Meanwhile, despite De Beers’ effort to disconnect laboratory-grown diamonds from the ideas of rarity, romance and permanence, retailers and other experts report that those often-unpredictable millennials continue to be intrigued with laboratory-grown center stones for engagement rings. Anecdotally, they’re buying them in droves. Says Shah of ALTR Created Diamonds: “She wants the largest and most brilliant diamond he can afford. We are telling her she doesn’t have to compromise.”Pat Henneberry, “The Jewelry Coach” and vice president of Global Training and Development for Hearts on Fire, says friends of her 27-year-old nephew often call her and ask about laboratory-grown diamonds. But she tries to redirect them. “I tell them that I think laboratory-grown is not what you want to be part of your bridal story. What I hate to see is when a customer comes in, and if their first question is ‘What do you think about laboratory-grown?’, immediately a sales associate walks them over to the laboratory-grown counter, even if they also sell natural. Let’s at least walk over to the natural counter first!”

David Brown, president of the Edge Retail Academy, says many a millennial prefers putting money toward a house and an exotic honeymoon rather than a traditional ring. “They’ll do their research online, and when they decide there’s nothing much wrong with laboratory-grown diamonds, they may go that route, as long as it’s being sold by a merchant who can demonstrate the value and show the trust and give them a quality product they can stand by.”

British jewelry designer and retailer Stephen Webster has found that young buyers are often attracted to the technology and modernity of laboratory-grown diamonds. Webster partnered with Swarovski to create a line of jewelry using laboratory-grown diamonds. “Because it’s Swarovski, who don’t mine things anyway, it certainly makes sense,” Webster says. “I have no problem with it as long as it’s defined. It’s very much like fur and synthetic fur. If you’re into fur, you’re not going to be into synthetic fur. But somebody who’s new to jewelry might be attracted to laboratory-grown diamonds.”

As Don Palmieri of GCAL Laboratories puts it, “the younger generation” is not afraid of the terminology “laboratory-grown” because they were raised with technology. “It’s not a negative to them,” Palmieri says.

Timothy Andre of Emma Parker, a retailer with a showroom near Seattle and a primarily e-commerce customer base, says millennials look at laboratory-grown as a solution. They’re in a tight spot if they want to get engaged and also buy a house, which in Seattle means an investment of at least half a million dollars. “Couples come to us, average age 28 or 30, and maybe finally they have a good job and even though they’re both making $90,000 or even $100,000, they’re staring at a tract house for $675,000. There is no point in paying for a natural diamond in this situation, like none at all.”“I’m super-practical,” he says. “If customers are open to laboratory-grown, we show them a 1-carat lab grown, a 1-carat Amora simulant and a 1-carat natural diamond and we’ll just let them pick.”So, in his world, laboratory-grown and other non-traditional centers make up an average of 35 to 40 percent of sales. When it comes to the value question, Andre is blunt. “I tell them if they’re investing in diamonds at all, they should go in another direction. Diamonds (mined or laboratory-grown) are a terrible investment.”

 

VIABLE OPTION OR LAST RESORT?

Retailers who have gone the laboratory-grown route and are able to explain it well to customers say they find little resistance.Jonathan McCoy of McCoy Jeweler in Dubuque, IA, realized the potential four years ago when he picked up half a dozen and they flew out the door. So far this year, 84 percent of center stones sold at McCoy are laboratory-grown. “We discuss the rarity of mined diamonds and lack of history of lab,” McCoy says. “Our whole presentation is offering options and showing stones next to each other.”

Brian Rouse, owner of Bay Area Diamond Co., Green Bay, WI, likes to use the term “above ground” diamonds, believing the term laboratory-grown is a little negative. “We want to have everything in the store that the market has to offer and let the customer decide. They look identical. And so, 90 percent of the time, clients pick the laboratory-grown diamond.”

Richard Bennett, owner of PK Bennett Jewelers in Mundelein, IL, says his first laboratory-grown sale was accidental. A couple came in looking for a diamond upgrade to a 2-carat or larger. “When we talked price, it was going to be hard to meet without going down in quality.” While he was searching, a laboratory-grown diamond dealer dropped in. “I asked him if he had a 2-carat radiant and he did, and it was very close to what these people were looking for and within their budget. The whole laboratory-grown thing, that didn’t matter to them at all. It was the beauty of the stone.”

Joseph Villarreal, owner of Villarreal, Designers of Exquisite Jewelry in Austin, TX, mentions the option of laboratory-grown only “as a last resort.” He doesn’t believe they’ll hold their value and he finds it unsettling that wholesale prices can vary widely. “I love the margin,” he says. “However, when I’m asked about the future value, I simply tell them I do not have a crystal ball.”


This article originally appeared in the September 2018 edition of INSTORE.

Eileen McClelland is the Managing Editor of INSTORE. She believes that every jewelry store has the power of cool within them.

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Cover Stories

12 Contrarian Rules of Jewelry Retail

Buy jewelry you hate? Talk people out of repairs? Jewelers insist these crazy business practices work.

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While it’s often wise to follow best practices in business, there are times to throw caution to the wind and break new ground in search of greater profits, more productivity or even less stress on the job. For 27 Contrarian Rules of Business, click here. But for contrarian rules that may apply exclusively to jewelry retail, check out the examples below, submitted by your peers.

1. Don’t hire jewelry experience

Stop worrying about “jewelry experience” when hiring. After working as a manager in the industry for a decade, I have realized that not only is industry experience often not important, a lot of the time it is detrimental because you have to un-train someone. — Emily and Matthew Clark, Spath Jewelers, Bartow, FL

2. Be open about your political beliefs

We are unapologetic about using our business and our platform to stand up for our beliefs, specifically in support of human rights, diversity and inclusion. We believe this is an investment in our community and the future. Some people may feel like a business should stay out of politics; we don’t. We won’t compromise our beliefs and don’t put a price tag on standing up for what is right. There is not a metric for doing business this way. — Bob Goodman, Robert Goodman Jewelers, Zionsville, IN

3. Stop producing bags or boxes

We don’t print our bags or boxes. They’re distinctive as we keep them the same and we encourage people to recycle them for gift giving. It makes us all feel good. — Sandra Locken, Sarini Fine Jewellery, Vulcan, AB

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4. Be closed more often

Two and a half years ago, we were drowning in work, always behind the 8-ball and under pressure. After studying daily sales records, I proved that the studio could be closed on Tuesdays to give us a day to just work. The shop catches up. I have a day to do business paperwork and running errands. We are available by appointment only, which gives us a great day to do design work. I promised my partner that if my assessment was not correct, and sales fell, I would change the plan. People are funny. The harder something it is to get, the more they want it. Sales held steady. No one freaked out. The shop no longer operates under stress. We are open 10 to 6 Wednesday through Friday and 9:30 to 3 on Saturdays. — Jo Goralski, The Jewelry Mechanic, Oconomowoc, WI

5. Don’t collect full payment up front

For custom design orders we do NOT collect full payment up front. We feel it is an added benefit for the client to have a little breathing room to not have to come up with a large payment all at once. The clients tell us they really appreciate it. — Joseph Villarreal, Villarreal Fine Jewelers, Austin, TX

6. Don’t buy the hot sellers

If a salesman tells me something is “hot,” I don’t buy it. Following the crowd is very bad for this store. Our customers are different. — Donald Killelea, Killelea Jewelers, Midlothian, IL

7. Talk people out of repairs

We talk people out of repairs every day, from suggestions on how to make their rings work in their present form to postponing expensive repairs until they are absolutely needed. We have gained restyling business and referrals from these customers as we are seen, and known, for doing what is needed, when it is needed, not over-selling repairs, but servicing our clients in what we feel is the best method. — Jonathan McCoy, McCoy Jewelers, Dubuque, IA

8. Let your employees make the rules

My employees make the rules, I am transparent about the numbers, we have a beer fridge … there’s a lot of non-traditional practices we have! — Jennifer Farnes, Revolution Jewelry Works, Colorado Springs, CO

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9. Buy jewelry you hate

We have three of us often in the buying decisions, and we always buy something that all three of us “hate.” Inevitably, it’s one of the first items to sell. We happened on this by accident and have run with it for years now! — Nicole Shannon, Keir Fine Jewelry, Whistler, BC

10. Hold onto old jewelry

I have an 80 year-old business. Some of the “treasures” I have held on to for one reason or another are now on display and selling rather well. It seems people are regularly checking to see what’s new in the old and estate jewelry. — Karen Schmitt, Straith’s Jewelers, Centralia, IL

11. Get behind on custom orders

I think by default, I have created a business advantage by being behind. I am so far out on custom order deliveries that it must be giving the impression that my services are really in demand. It’s like Groucho Marx once declared, “The only club I want to join is the one that won’t let me in.” The further in the hole my custom orders become, the more clients seek me out, mostly all by referral. — Murphy McMahon, Murphy McMahon & Co., Kalispell, MT

12. Show up late to work

I come in late every damn day. It works because I make my staff pick up the slack and I can hit the ground running when I get here. Seriously though, my staff is awesome and they know they have to be on the ball first thing in the morning because I am not. Don’t feel like changing that up at all. — Erika Godfrey, Hawthorne Jewelry, Kearney, NE

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Cover Stories

The 19 Contrarian Rules of Business

Don’t promise excellent service? Run annoying ads? Business leaders insist these counterintuitive principles work.

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TO MAKE A POINT about how our brains operate, the American neuroscientist Gregory Berns likes to encourage people to close their eyes and imagine the sun setting on a beach. If you just tried it, odds are the image that arose was the clichéd one — a warm tropical island scene, most likely framed by the frond of a coconut tree, awash in orange, as opposed to, say, a dark, wind-whipped pebble beach off the coast of northern Scotland.

The brain “is fundamentally a lazy piece of meat,” Berns writes in his book Iconoclast. It needs energy to operate and has evolved to use it as efficiently as possible. As a result, it defaults to shortcuts as it can — past experience, other people’s opinions, common practice — to avoid the taxing effort of perceiving or imagining afresh.

There are, of course, people who make it a habit to buck convention, who have a knack of seeing something no one else does. Berns refers to these disruptive original thinkers as “iconoclasts.” Generally, they are probably better known as contrarians. These are the brave and often odd souls whose questioning of the conventions of society or their professional field have repeatedly caused history to change course or leap forward.

In business, entrepreneurs are often contrarian by definition — they see value and opportunity where others do not. The contrarian investor Bill Gurley notes that “you can only make money by being right about something that most people think is wrong.”

The idea of being an independent spirit appeals to many. In a recent Brain Squad survey, 58 percent of our readers identified themselves as contrarians compared to 30 percent who said they were conformists and 12 percent who said they were neither. Of course, by definition, it’s not possible for the majority to be contrarian, even more so in a tradition-bound industry like jewelry. We suspect the result reflects most jewelers’ thoughts of themselves as independent operators charting their own destinies in a world where most of their fellow citizens opt for the security of more regular employment.

It is not easy being a true contrarian. There is the risk of ridicule, having to live with constant uncertainty. Being contrarian for the sake of contrarianism is pointless.

There is, unromantically, much to be said for doing things the timeworn “best practice” way. We thus begin our exploration of contrarianism with a caveat — doing something differently is exciting, possibly liberating, often far more lucrative than the conventional way … and often dangerous. Go charging away from the herd with care. Ultimately, you want to choose the ideas — new or old, intuitive or rational, bizarre or conventional — that serve you best.

The customer is not always right

1It’s actually irrelevant if a customer is right or wrong. This is, after all, a commercial transaction, not a debate. Just because a customer wants, needs, or expects something does not mean that delivering it is the best thing for your business. Indeed, “keeping certain customers happy can be a horribly inefficient and downright distracting way to run a business,” note Brent Adamson, Matthew Dixon, and Nicholas Toman in an article in the Harvard Business Review. It’s also not much fun.

As a business owner, you need to make decisions that best apply your company’s capital, intellectual energy, and product capabilities. Rather than customer satisfaction, the ultimate goal should be running a sustainable business. Have a written, legally defensible terms of service statement, warranties, guarantees, and a simple process to determine which clients or customers deliver the strongest ROI and which are actually costing you money. In some cases, it’s better for long-term growth (not to mention store morale) to jettison a high-maintenance client and focus on improving the quality of your customer base.

Ignore terrific opportunities

2One of the dangers of business success is that it leads to more opportunities. Pursue them at your peril. In business, there is always a trade-off. Doing one thing well invariably means you can’t do another at a high level as you spread yourself too thin. The result is a damaging mediocrity.

In his book, Essentialism: The Disciplined Pursuit Of Less, Greg McKeown cites studies that show the loss of focus is a key reason companies fail. The antidote? Spurning good opportunities. “Not just haphazardly saying no, but purposefully, deliberately, and strategically eliminating the nonessentials. Not just getting rid of the obvious time wasters, but being willing to cut out really terrific opportunities as well,” he says. “Few appear to have the courage to live this principle, which may be why it differentiates successful people and organizations from the very successful ones.”

Don’t give your staff the resources they need to fix a problem

3Constraints breed resourcefulness. This is an idea that has been gaining influence in business circles for the last few years. “Is there something in the nature of constraints that brings out the best creativity?” writes Scott Berkun, the author of Mindfire: Big Ideas For Curious Minds. Consider a good haiku or sonnet, and the answer is obviously yes: it’s precisely the limits of the form that inspire new ways of working inside them. In the workplace, that means no more “blue sky” brainstorming: if you want the best answers to a question, focus it narrowly; consider a time limit, too. Google sometimes puts fewer engineers on a problem than it needs; it inspires ingenuity. Behind all this is the counterintuitive insight that discipline and structure are often the path to freedom, not its enemy. See constraints as a game. Not only are games about fun, but they are distinguished by the rules that govern them.

Forget trying to fix your weaknesses

4In a series of bestselling books, the Gallup consultant Marcus Buckingham has made a persuasive case for a strengths-based approach to life and business: it’s both more effective and more enjoyable, he argues, than struggling to fix your weak spots. According to Buckingham, most people try to “plug” their weaknesses, while the really successful focus on exploiting strengths. You’ll rarely improve a weakness beyond mediocrity, argues Buckingham, not least because it’s hard to invest sustained energy in something you don’t enjoy. If you truly know what you’re bad at, you’re already ahead of the pack. Don’t throw that away by wasting your time getting slightly less bad.

Don’t believe in long work

5Few things are as American as the belief in the merit of hard work. The problem is too many small business people confuse work and progress. A day when lots of things get done, when you arrive home exhausted after holding six meetings with staff and vendors, clearing 300 emails from your inbox, and finally straightening those old files in the backroom, sort of feels like a productive day, but it’s unlikely to have helped your business take the next step forward. Marketer Seth Godin calls this bias for efficiency over effectiveness “the trap of long work.”
“Long work is what the lawyer who bills 14 hours a day filling in forms does.
Hard work is what the insightful litigator does when she synthesizes four disparate ideas and comes up with an argument that wins the case—in less than five minutes.

“Hard work is frightening because you might fail. You can’t fail at long work, you merely show up.”

The management guru Peter Drucker suggested the best way to address this issue was by constantly asking yourself the question, “What’s the most important thing for me to be doing right now?”

Think small

6In his 1994 book Built To Last, Jim Collins introduced the world to Big Hairy Audacious Goals, or BHAGs, his term for the ambitious long-term goals that he argued galvanized successful companies. And it seems the term is rolled out in every discussion of good business practice. But the problem is that the excitement, energy, and envelope-pushing boldness stirred up by such endeavors often dissipates quickly in the face of the day-to-day running of business. Worse, such big-picture thinking, telling yourself something is epic and of crucial importance, often leads to fear, resistance and ultimately inertia and disappointment. As the psychologist John Eliot writes in his book Overachievement, “Nothing discourages the concentration necessary to perform well … more than worrying about the outcome.” The marathon runner who’s reached a state of “flow” isn’t visualizing the finish line, but looking through a narrower lens, focusing on one stride, then another, then another. Like the formula for contentment (happiness = reality – expectations), it’s often better to forget the end goal, aim low and just focus on the process if you really want to get things done. This can apply to everything from setting low targets for salespeople (spurred on by achieving the goal, they will often break through and hit a higher number) to big projects. The young Jerry Seinfeld’s scriptwriting technique involved marking an X on a calendar for every day he sat and typed. His goal was an unbroken chain of Xs. If he’d aimed instead to write masterful jokes, he’d have been distracted and intimidated.

Forget audacious. Just go do it.

Get rid of the rules

7Too often, managers assume the key to improvement must be clearer procedures, more exactingly enforced. But the result is organizational structures that permit zero autonomy — and extremely annoying customer service (“Sorry, sir, our policy doesn’t allow you to …”). Perhaps even worse is that such management fails to capitalize on the talents of those lower down the hierarchy. Zappos’ contrarian founder Tony Hsieh made headlines a few years back when he said he was rolling out “Management by Holacracy,” which eliminates the traditional oversight role of the manager and instead relies on the employees themselves to decide how to get their day-to-day responsibilities completed on the basis that they probably know best. That may be too much for most business owners, but according to Harvard Business School research, “loose monitoring” of employees makes for higher profits as well as happier workplaces. Striking the right balance between autonomy and control is very likely the essence of being a good manager.

Give away your time

8Overwhelmed by work? Feel you are in a constant race against the clock to get things done? Try making some time for others. “While it might seem counterintuitive to sacrifice some of the very thing you think you don’t have enough of, our research shows that giving a bit of time away may, in fact, make people feel less pressed for time,” Cassie Mogilner Holmes, an associate professor at UCLA and Michael Norton, a professor at Harvard told the Wall Street Journal. Another hack to deal with time scarcity — erase a day from your schedule. Busy? Don’t schedule anything for Fridays. The work you didn’t get done will flow over, and you’ll finally knock off those to-do list items.

Hire more introverts

9On the surface, introverts don’t seem to have the makings of great salespeople or even managers. Social interaction tires them, they have trouble with insincere flattery, they don’t like to push people, and they don’t tend to contribute vocally to meetings or brainstorming sessions. But there are positive flipsides to all this: introverts tend to demonstrate a higher degree of sensitivity in emotional interactions, they are more likely to be experts in their field, they are less likely to be yes-men or women, and as for managing people, they do better than extroverts when the staff itself is full of self-directed go-getters. “Although extroverted leadership enhances group performance when employees are passive, this effect reverses when employees are proactive, because extroverted leaders are less receptive to proactivity,” says Susan Cain, author of Quiet: The Power Of Introverts In A World That Can’t Stop Talking.

Be last to market

10Among business gurus, few things are as unquestioned as the notion that innovation is the path to success. “Innovate or die!” goes one mantra. Yet if innovation were a surefire way for companies to achieve dominance, the world might look very different. White Castle, RC Cola, and Diners Club were all innovators, but think of fast-food, soft drinks and credit cards, and those are unlikely to be the first names that come to mind. The upsides of unoriginality are clear: imitators let others make the costly mistakes, and then incorporate the lessons learned into a far better product. (Exhibit A: the iPhone.) In his book Copycats, the management theorist Oded Shenkar argues we need “to change the mindset that imitation is an embarrassing nuisance.” Rather, it’s a “rare and complex” capability, one we could all do with cultivating, he says. In his book Zero To One, Peter Thiel argues that “it’s much better to make the last great development in a specific market and enjoy years or even decades of monopoly profits.”

Run annoying ads … often

11There’s a reason that grating TV ads work: the more they grate, the more you’ll notice them, and noticing — thanks to what psychologists call the “mere exposure effect” — leads to liking.

Depressingly, whatever we’re repeatedly exposed to, and regardless of any other reason to like or dislike it, we’ll end up growing fond of. According to Roy H. Williams, author of The Wizard Of Ads, there’s actually no way for successful advertising to avoid being irritating to some degree. “Ads that twist our attention away from what we’d been doing are always a bit annoying,” he says. But if you fail to get your audience’s attention, your ad has failed at the first hurdle. “Consequently, most ads aren’t written to persuade; they’re written not to offend. But the kinds of ads that produce results make us answer yes to these three questions: Did it get my attention? Was it relevant? Did I believe it?” Williams claims 98.9 percent of all the customers who hate your ads will still come to your store and buy from you when they need what you sell. “These customers don’t cost you money; they just complain to the cashier as they’re handing over their cash.”

Stop holding meetings

12Jim Buckmaster, chief executive of Craigslist, has a simple policy: “No meetings, ever.” There are several reasons why meetings don’t work. They move, in the words of the career coach Dale Dauten, “at the pace of the slowest mind in the room,” so that “all but one participant will be bored, all but one mind underused.” A key purpose of meetings is information transfer, but they’re based on the assumption that people absorb information best by hearing it, when only a minority of us are “auditory learners.” The key question for distinguishing a worthwhile meeting from a worthless one is this: is it a “status-report” meeting, designed for employees to tell each other things? If so, it’s probably better handled on email or paper. That leaves a minority of “good” meetings, whose value lies in the meeting of minds itself — for example, a well-run brainstorming session.

Drop some F-bombs

13The jewelry world is one of refinement, education and professionalism, not the place for profanity. Yet swearing, when done judiciously, according to various psychologists, boosts endorphins, promotes social bonding and makes people more persuasive. Periodically, let your staff and customers know you’re human.

Stop asking, “Where do you want to be in 5 years?”

14Hiring employees who will challenge management is another staple of business advice, but everyone has probably worked with “yes, but” employees who basically oppose every new idea and approach. To find true contrarians, Thiel in his book Zero To One recommends asking the following question when interviewing employees: “Tell me something that’s true that nobody believes in.” (God, global warming and aliens don’t cut it.)

Don’t ask for the sale

15The traditional approach to selling says tout the benefits, close throughout, close with an assumption and then push for the add-on followed by another. You’re just efficiently taking the customer in a direction she wanted to go anyway. In contrast, the “slow sales” movement, which has been gaining ground for a few years, argues that there are intelligent, deliberate customers who prefer an almost “do-it-your self” zero-pressure environment. Granted, getting them to the cash register may take longer. But according to INC magazine, this technique alleviates the extra costs of post-purchase dissonance from returns, customer service time, negative feedback, and customer churn.

Look for mentors and staff who do it the “wrong way”

16Tim Ferriss has an interesting approach to considering contrarians: Be on the lookout for the anomalies, like the wispy girl who can deadlift 405 pounds. They’re performing with techniques rather than genes. “These iconoclasts show the differences in techniques and attributes,” he says. “If someone has become really good at doing something in a very nonstandard way, you can infer that the standard path isn’t necessarily the best methodology for learning a skill.”

Don’t promise excellent customer service

17Ask independent jewelers what is their point of competitive advantage and they’ll overwhelmingly say excellent customer service. But, something big corporations know (but never publicly say) is that delivering excellent customer service ultimately results in unhappy customers. Thus the field of “expectations management.” “If you want satisfied customers, it’s certainly wise to act in ways that will satisfy them. But it’s also wise to pay attention to (and, if possible, influence) their criteria for feeling satisfied,” writes Oliver Burkeman in The Guardian. Training customers, employees, and partners not to expect a “yes” in response to every single request might be crucial for preserving sanity. Far better to have a reputation as a jeweler who, for example, turns around a repair within three days than one who does it overnight — because in the latter case, as soon as you fail to deliver on that tight deadline, you’ll be seen as underperforming.

Ask customers for favors

18The “Ben Franklin effect” states that if you want to get someone to like you, you should ask him or her to do you a favor. The strategy, named for the founding father’s habit of borrowing books from opposing politicians to win them over, works because humans hate cognitive dissonance: we can’t stand a mismatch between our actions and thoughts. So if we find ourselves helping someone out, we’ll unconsciously adjust our feelings for them. The implications are striking. Don’t suck up to your customers — ask for favors or even just their opinions (“Where do you think the economy is headed?”).

Don’t be so professional

19We live in an era with more opportunity than ever to burnish the image we’re projecting, and more pressure than ever to do so. But in her new book, Cringeworthy: A Theory Of Awkwardness, Melissa Dahl makes a persuasive case for celebrating those times when “someone’s presentation of themselves … is shown to be incompatible with reality in a way that can’t be smoothed over.” Awkwardness pierces that facade, exposing the imperfect life behind it. Quoting the words of the philosopher Adam Kotsko, she says it creates “a weird kind of social bond” — a solidarity arising from seeing that behind the fakery, we’re all just trying our best to seem competent. The awkward you, then, is the real you, the one without the defensive performance. And people will like you for it.

Click here for 8 more Contrarian Rules, as well as the exclusive online article, “12 Contrarian Rules of Jewelry Retail.”

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Cover Stories

Holiday True Tales

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on

Any random day in the life of a jeweler provides plenty of stories to tell – whether those tales are heartwarming, infuriating, funny or odd. But once the holidays are on the horizon, those stories become more and more, shall we say, interesting. Here is a compilation of some of our favorites, culled from reports from the front lines of fine-jewelry retail. Go forth bravely this season, and bring your sense of humor!

THE SPIRIT OF CHRISTMAS

1 During the 2016 holiday season, we were down two employees (one on maternity leave, one on medical leave). It was chaos and those of us who were working don’t remember much about it … except for meltdown lady. A client came in the week before Christmas to have us refurbish a chemically damaged ring (cracked and missing metal). We told her because of our schedule we couldn’t guarantee a Christmas delivery, and she yelled at me that she thought we were professionals. I said we would try, but again reiterated there were no guarantees. She came in two days later to pick it up (Christmas was still five days away) and we told her we hadn’t even had a chance to look at it yet. She crossed her arms, stomped her feet, and proceeded to have a toddler-style meltdown in the middle of our packed showroom. My lead jeweler volunteered to stay late to do the work if she would just pay and leave. I offered to ship it to her so I wouldn’t have to see her again. Of course, the day after Christmas she was in with the daughter because the ring was four sizes too small (we were only repairing the breaks). It was clearly our fault the ring was the wrong size and she demanded we size it up for free while she waited. I promptly told her our only guarantee was on the ring repair and not on the size — and she could pay for the sizing, pay the rush fee if she wanted it while she waited, or find the door. She left the ring, we sized it, and when she came to pick it up, she got in a few jabs about how we should have known it needed to be sized (we had never met her daughter). I told her after her behavior in our studio three times that she was no longer welcome to return. It was my first client “firing” and it felt good!!! jennifer farnes, revolution jewelry works, colorado springs, co

SOMETHING BORROWED

2 We had a customer who wanted to purchase three or four high-end rings, let his wife wear them through New Year’s and then let her keep one and bring back the others. I told him we would not take back anything that was worn. He said fine, he would shop elsewhere. I thanked him. rosanne kroen, rosanne’s diamonds & gold, south bend, in

CHARMED, I’M SURE

3 We had a client tell us they needed eight ugly-sweater charms for Christmas, and it was the 21st of December. All custom made. It was an unusual request since we never saw an ugly-sweater charm before and only had three days to make up the charms. The client offered to pay more than the usual asking price because of the short notice. We made the charms, the customer came back in and was ecstatic. He ended up sending us a gift card to our local Brazilian steakhouse and a picture of everyone wearing their ugly sweater with their matching ugly-sweater charm. lyla ismael, lyla jewelers, oak lawn, il

THAT TAKES THE CAKE

4 A customer in her 80s is downsizing and found a gold-plated cake knife in our box, in mint condition, engraved with her in-laws’ names and 50th anniversary date. She wants to return it! cathy graves, ellis jewelers, frankfort, in

WRAPPER’S DELIGHT

5 One Christmas season, I was wrapping an item that a female customer had just purchased. She said, “Wow, I can’t believe you still wrap!” I replied, “Yes, we will always offer to wrap for you, no problem.” She returned later that afternoon with the presents she had purchased at the mall the same day for us to also wrap! nancy carbonetti, stephen’s jewelers, wilmington, de

THE MOONSHOT

6 The Christmas hot seller a few years back was the Bulova Accutron watch. A man comes in looking for the “Astronaut.” I show it to him, but he just can’t pull the trigger and leaves. Next day he comes in, looks again but can’t decide. I introduce him to the assistant manager. He leaves to think about it. The man comes in several more times and finally says he will be back on Christmas Eve to purchase the watch. Fast forward to Christmas Eve, and we are closed and pulling the merchandise for the night, nearly ready to have a toast and call it a season. The man comes to the entrance and rattles the door, trying desperately to get in. The manager says, “Who the #!*# is that?” I tell him the man has come back to purchase the Accutron Astronaut. Manager lets him in and after trying it on he says … “I’ll be back after Christmas!” don delano, jl jewelers, tampa, fl

THE TICKING CLOCK

7 I was working with a customer last Christmas on an engagement ring. He wanted it for New Year’s Eve, but because we close the week after Christmas, it had to be completed Christmas Eve. It was Dec. 21 and he needed to decide on which diamond he wanted. He was running late and I told him I did not mind staying late. We closed at 7 and he arrived at 7:30. He kept going back and forth between diamonds for four hours. Finally, at 11:45, I told him he had 15 minutes to make up his mind because I was going home at midnight. Plus, I still had to make a custom setting for the ring! I will go the extra mile for a customer, but he almost went too far. It was a $24,000 sale, so I guess it was worth it. rick sanders, sanders jewelers, gainesville, fl

CELEBRITY APPEARANCE

8

We kept the store open after closing on Christmas Eve for a huge, internationally known celebrity thinking he was going to make a very large purchase. After the long season, everyone was looking forward to getting to their families and a little R&R, but we stayed (the whole crew) more than an hour in hopes that this guy was going to make it all worthwhile. In the end, he purchased a $64 pair of pearl studs. Well, at least we can say he shops with us at Christmas. Maybe next time!!? jon walp, long jewelers, virginia beach, va

PREGNANT WITH ANTICIPATION

9

09 When I lived and had my workshop on a small farm, there was a loud knock on the front door on a wild and windy night. I open the door to find a bedraggled elderly lady holding a very fat Chihuahua. She said that her dog was about to give birth and she immediately thought of me as I had a few sheep and was used to working with small things. gordon laurie, eidos, santa fe, nm

TIME FLIES

10
One fellow came in late afternoon on Christmas Eve with a complicated custom ring design. I priced it out, he agreed, then he said, “I can pick this up tomorrow, right?” When I regained my composure to answer, no, it would take us two weeks to make, he responded, “But it’s all she wants for Christmas! She gave me the design in October!” russell criswell, vulcan’s forge, kansas city, mo

THE CONNOISSEUR

11I once had a customer whom I would consider a Mr. Know It All. He was shopping for an engagement ring, and after showing him multiple diamonds, I decided to have a little fun and test his knowledge of diamonds. I showed him a larger cubic zirconia, and after examining the stone, he gave me his thoughts and pointed out what he liked and didn’t like about the stone. I then told him it was in fact a cubic zirconia. We had a good laugh and I gained his trust. He is actually now one of my best customers and a good friend. james stinson, diamond classics, mcminnville, tn

THE MARATHON LOSER

12 It’s Christmas 2011. A young man comes into the store looking at jewelry. He asks to see an $1,800 gold chain. The sales associate shows him and he decides to run out the front door with the chain without paying for it. The sales associate screams, “He has our chain!” Dress shoes and all, I go running after the bandit. Little does he know that I have been training for the past two years for a major ski trip and an upcoming 10K race. Our mailman sees what is going on as I am screaming at the chain bandit and begins to run with me. The UPS guy sees what’s going on and parks his truck in the middle of the road and helps us. After a few hundred yards or so, two young men on their bikes see what’s happening, ride in front of the chain burglar, drop their bikes and tackle the idiot. Cops show up and the rest is history. We get the chain back, he goes to jail and no one is hurt. Just another day in retail! greg raskin, raskin’s jewelers, prescott, az

RIGHT OUT OF MY MOUTH

13 One Christmas season, I snuck out of the shop just to run down a few doors for a soda. When I left, my associate was helping a college student pick out a gift. In the meantime, an older gentleman came in to find something, too. (Yes, I know that I left her alone while already tied up with one client … argh… I should be embarrassed, but whatever!) Anyway, the old guy that came in was upset he had to wait, yelled at her and started walking out the door. The college kid says to him as sweetly as possible, “Merry Christmas, ya A$$hole!” Sometimes those things that would feel so good to say in retail actually get said (thankfully, by someone else)! erika godfrey, hawthorne jewelry, kearney, ne

HIS FINAL MISTAKE

14 A customer bought his wife a Christmas gift and then bought one for his girlfriend as well. After he mixed up the packages, his wife came in, stating that he must have switched the package and given his girlfriend her gift because she would never wear the present he gave her. She ended up exchanging the gift for another piece on a slight up-charge of about $12,000. I don’t know if these people are still married, but instincts would tell me no. marc majors, sam l. majors, midland, tx

TURNS OUT, SANTA JUST ISN’T FUNNY

15 One Christmas Eve, a gentleman came in the front door dressed as Santa Claus. Within seconds of entering the store, he announced, “This is a stick up.” We had already called 911 before we realized that it was our local hardware store owner who had been enjoying too much holiday cheer wanting to spread a little of his cheer and trying to making a joke. No one else found his joke amusing. james sickinger, sickinger’s jewelry, lowell, in

CHRISTMAS EVE ON ICE

16 The goofiest Christmas customer request I got came a few years ago when cellphones were the size of large lunch boxes. This customer called me from the center of Mille Lacs Lake while ice fishing at about 4 p.m. and said he forgot that this was Christmas Eve and would I wait for him to get to town in about an hour and a half. Needless to say, I agreed and showed no mercy when he came in. I sold him the second-highest priced item in the store (I couldn’t quite get him to buy the highest priced item). I always felt that this was fair because he published most of the phone directories in Minnesota and we all know how pushy they used to be. ed menk, e.l. menk jewelers, brainerd, mn

DECIMALS MATTER

17 We had a customer come in at the last minute on Christmas Eve wanting to look at the prettiest pair of diamond earrings we had in the store. My staff showed him a gorgeous pair of earrings with a cost of $4,295. The customer was thrilled, had us wrap them up and proceeded to write us a check for $42.95! andrew russakoff, russakoff jewelers, skowhegen, me

GOD KNOWS HE TRIED

18 I had a gentleman buy a ring and then marry himself to God in front of one of our mirrors. He came back the following week requesting a refund of the ring. Oh my. jill keith, enchanted jewelry, danielson, ct

A TALE OF TWO RINGS

19 Our favorite story from any holiday happened probably 25 years ago. Dad and I were discussing the sales of a busy December day. After a crazy discussion, we realized he and I had sold an engagement ring to two different guys within an hour apart. Each was asking the same girl to marry them. The girl was the daughter of one of my dad’s friends. She had been dating one of the young men for six years, the other for six months. She told them both no. She is still a customer, and married to a different guy. hugh harby, harby jewelers, jacksonville, fl

DESIGNATED DRIVER

20 An extremely nervous groom-to-be “celebrated” his purchase with so many celebratory shots that I had to drive him home! I made a customer for life! dennis petimezas, watchmakers diamonds & jewelry, johnstown, pa

LIGHTS, CAMERAS, ACTION!

21 We had a customer who wanted to create an amazing Christmas experience for his wife here in our store. He purchased an amazing piece of jewelry then gave us directions on the special day. We have a large showroom with a staircase at the south end that leads to offices and the staff break room. He explained he wanted Santa at the top of the stairs with a bell. On his cue, Santa was to appear on the stairs ringing his Christmas bell and carrying the wrapped gift. He took his wife to lunch and let us know they would be in around 1:30. We rented a Santa costume and our jeweler became Santa. Two female associates stood at the bottom of the stairs to give Santa the cue to come down. Our customer was to let us know when Santa was to make his entrance. At the last minute he decided he wanted the girls at the bottom of the stairs to sing Jingle Bells. They were a bit panicked but agreed. The customer gave the word, the singing began and Santa came down the stairs ringing his bell. The customer’s wife was surprised and delighted. The store was very busy with Christmas shoppers. We still have customers that remind of us this amazing memory. georgena kincaid, gold casters fine jewelry, bloomington, in

JUST LOOKING FOR TROUBLE

22 At 4:55 p.m. on Christmas Eve, a gentleman strode in and did a power look. My friend D walked up to him at the counter with a freshly applied smile. He said, “I’m just looking.” To my surprise, D said: “No you’re not. You’re in deep trouble. Now what can I help you with?” He walked out with a box! steven wardle, forest beach design, chatham, ma

AT LAST, SOMETHING SWEET

23 I was waiting on a family. The grandma really loved a pair of earrings, but they just didn’t have the $99 to buy them. We continued talking, and a few minutes later, one of our sales associates came over. She had a wrapped Christmas gift for the grandma. She unwrapped the gift and it was the earrings she wanted! Seems another client decided to be our “Christmas Angel!” She created a joyous time that touched all of us. debbie fox, fox fine jewelry, ventura, ca

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