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Friday, October 30, 2020

Get Your Margin

Get Your Margin By Bill Boyajian

I remember playing basketball against a team in junior high school that was superior to my team in both coaching and players. After they made a basket, they would shout SCORE and put on a full court press. After stealing the ball they would score again and by half time, they were always well ahead with a sure win in front of them. In the second half of the game, their coach would call off the full court press and not pile it on just to run up the score against us. As a player, I appreciated that.

There is a lot of discussion in sports about whether it’s okay to run up a score when an opponent is clearly defeated. Once in a while teams make miraculous comebacks, but almost never when the opponent is vastly superior. Still, a lot of coaches will never be satisfied unless their team goes all-out for the whole game to win by a huge margin.

Sports and Business
I find a lot of corollaries between sports and business. Successful businesspeople have their game face on even when things are going great. They have an insatiable appetite for success, so they keep pouring it on. There’s nothing wrong with wanting to be more successful or to make more money. Too often, jewelers feel they make enough money or can’t charge customers more for their products or services. I tell them that customers vote with their pocketbooks and will surely let businesspeople know if they charge too much by walking away from their store.

I think it’s okay for a coach to have sympathy for a team that is clearly defeated, but I don’t think it’s okay for businesspeople to be afraid of charging a fair and reasonable price for their products or services. What I have found is that owners tend to charge less than they could in mark-up for fear of losing business without realizing that they are losing necessary profit by charging too little, or worse, by discounting products when they don’t have to.

Your Risks
As an entrepreneur, you take risks each day in business. You support numerous staff and their families who depend on you to be successful. You purchase hundreds of thousands of dollars of new products every year not knowing what will sell and what won’t. You sign a multi-year lease that commits you and your business to tens of thousands of dollars of future payments. Discounting your products or failing to focus on the margin you need to be profitable is the kiss of death for every jeweler. Discounting and losing margin may be keeping you from making what you deserve. And it also keeps you from being able to pay employees what they deserve in salary and bonus.

You Need Balance
Balance is needed in business as much as it is in sports. Just like you wouldn’t run up a score to build your own ego, you wouldn’t charge more than is fair and appropriate for your products or services. But neither should you charge too little, which would keep you from achieving a fair return on your investment and a reasonable standard of living.

Many jewelers are approaching retirement age and don’t have the resources outside of their business to retire comfortably. Sometimes it’s too late to reverse course and make up for lost ground. But most often it’s not. Take some time to review your margins and increase them on a consistent basis.

About the Author: Author, educator, speaker, and business consultant, Bill Boyajian was President of the prestigious Gemological Institute of America (GIA) from 1986-2006.

Friday, October 02, 2020

Are You Ready For The Post Covid Ramp-up?

According to highly reliable sources, half of all retail sales will be done by ecommerce driven by 2025, according to sources. The physical restrictions of Covid have fast-forwarded the inexorable move to marketing and selling online. Those not fluent in social media marketing and ecommerce may be left behind.

“Omnichannel” is the new paradigm. Customers expect to engage with stores through multiple intersecting channels —website, social media, phone, text, email, in store. They may see a ring online that sparks their interest. Next, they may search for local jewelers online. You do have a website, don’t you? to find your hours and location, give you a call, or live chat via your website. They may visit your store to check out what you have to offer while continuing to comparison shop online. You may close the sale over the phone, through email or text, or at your store. You must be active and proficient across the spectrum to engage your customers where they are or you will miss them.

Some Social Media Marketing Tips to “up your game”:
Define your “avatar,” your key client profile. Are they millennials? Gen Z? What’s their income and target price points? Are they self-purchasers? What’s their style—casual, eclectic, traditional? What kind of music, movies, books do they like? What are their hobbies? Outdoor adventures, yoga, cooking? How important is socially responsible sourcing to them? The more clearly you can focus on your target customer and you may have several different types, the more clearly you’ll know how to reach and appeal to them on social media. Facebook appeals to an older demographic. For Instagram, tune into key “influencers” and take clues from the styles of their most popular posts.

Stand out. Grab attention. Don’t be boring. Customers are exposed to thousands of images and ads daily. It’s not enough to post a picture of a nice piece of jewelry. Take a striking photo, preferably video both on a live model and showing close up detail of the piece from several angles. Photo quality and lighting should be very good with lots of light, but not look too “professional” or slick. Take pictures of your staff or customers (with their permission, or course) modeling the jewelry. (Tip: They don’t have to have bought it already! As they’re trying on a pair of earrings, compliment them. “These look so fantastic on you. Do you mind if I snap a photo and post on Facebook?” Encourage them to share with their friends for feedback.)

Headline is key. Take a tip from YouTube, another platform where you can also be regularly posting videos for example, show a custom ring being made. The thumbnail photo and headline are crucial. “Click bait” is the term for making the headline so compelling browsers have to click! Try a controversial statement “Diamonds are NOT a girl’s best friend! Want to know why?” Humor, an inspiring quote, or a confession “I must confess, I rarely shop in jewelry stores…BUT” Tap into current trending topics Search Google trends. Appeal to emotion. Tell a story.

Give value upfront. The online counterpart to a free ring cleaning. Offer something of real value that establishes yourself as an authority. Give a free webinar that customers have to preregister for you keep their email addresses on “How to choose an engagement ring” or “The lore and lure of precious gems” or “How to care for pearls and precious gem jewelry.” Offer a free download of a paper ring sizer, or chart of birthstones and traditional anniversary gifts.

Testimonials are gold. Collect quotes from happy customers with permission to use them. Offer $100 credit to your top 20 customers for them to make a 15 second testimonial video you can post on social media.

Find a problem. Fix it. Help identify your customer’s problem and offer a solution. Are they overwhelmed with the prospect of finding an engagement ring and don’t know where to begin? Appealing to an underlying fear or anxiety and offering a simple, clear positive solution is a winning strategy.

Sales funnels. Social media offers millions of potential new customers. Reach out to a new larger base. Tip: You’re not limited to your local area. Target a new national or international market. Funnel prospective customers through the steps of the purchasing process via targeted ads on Facebook and Instagram, leading them directly to a landing page with a specific unbeatable offer (“$19.99 pearl earrings Black Friday special”) where they can complete the sale with a few clicks. Gather data, especially emails and text phone numbers so you can regularly follow up with new leads generated.

Next time: Clinching the sale online through ecommerce. Websites and more!

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