As part of a retro movement to appeal to Baby Boomers, the 1970’s are back. Cheeky Honda mini-van commercials aside, Shane Decker told audience members in his keynote speech on Sunday morning that jewelers need to prepare themselves for the price point selling that characterized retail sales over three decades ago.
In his “Magic Numbers: The Importance of Price Point Selling and Buying” seminar, Decker sprinkled in the usual levity in sharing his many sales tips the president of Ex-SELL-Ence is known for in his travels to stores across the country as well as his industry speaking engagements. But there were moments of tough love with retailers who Decker said are, “not good at handling price objections. Retailers and their sales staff need to do a better job proving the worth of the diamonds they’re selling.”
Shane Decker glad-handles the audience before his keynote speech.
Decker went on to explain that magic numbers are the dollar amounts customers have in mind before they enter a store. The numbers can come from various sources, such as research on the Internet, advice from a friend or family member to the top end of a tight budget. Regardless of the source, “most people can spend twice that amount based on incorrect or preconceived notions,” says Decker. “And, at the end of the day, price objections are mostly about testing the salesperson in determining what a customer can get away with.”
Romancing the sale was a constant Decker refrain throughout the keynote speech and he also gave retail jewelers their own set of magic numbers. An essential key to romancing purchases in a retail jewelry store is better trained staff. Decker chastised jewelers for spending copious amounts of money on the store, inventory and advertising, but “how much do you spend on your sales staff?”
In all fairness to his audience members, Decker shared his concerns about an aging workforce that is being replaced by younger sales people who have a “poverty mentality,” says Decker. “This frame of mind comes from sales people who think just because they can’t afford to buy luxury products that their customers can’t.”
This way of thinking, in part, is contributing to the dying art of negotiating in retail stores across the country. To revitalize the art of negotiation, Decker offered numerous negotiating strategies in dealing with the many “magic numbers” that create price objections in the minds of customers.
Decker started with the “Option Negotiation.” If a customer has a certain amount they’re stuck on for a one-carat diamond, drop down in the color or clarity of the diamond being shown or offer to have a smaller diamond set in the piece. “This gets the customer thinking more in terms of value,” says Decker.
The “Limited Authority Tactic” is a sales method that puts the price cutting power on a faceless entity – the vendor. “Sorry, we don’t have the authority to discount items based on vendor restrictions … they could take the collection of jewelry away,” says Decker.
A Decker personal favorite is the “Owner’s Blessing.” The salesperson tells the customer he or she does not have the power to discount. That authority only comes from the store owner. In calling the store owner to the showroom floor he or she might say, “this is one of my favorite pieces in the store,” and then give the blessing to the discount. “It takes only 10 to 15 seconds and closing ratios go up 75%,” says Decker. “And, there’s the added benefit of customer contact with the store owner.”
When discounting, Decker implored audience members to keep the first number small – no more than 10%. If further discounts are pursued in the sales presentation, the second discount should be half of that first amount. So, as a general rule, ideally sales should not be discounted more than 15%.
Customers may have their own magic numbers, but a key part of Decker’s keynote speech was giving retailers their own magic numbers, starting with jewelry prices that should end in 50, 75 and 95. Decker discouraged numbers that are too exacting or difficult to convey in a sales presentation. “Don’t use weird numbers like $487.32,” says Decker. “Price the item at $495.”
Arriving at magic numbers isn’t a simple case of rounding up or down. Decker encouraged store owners and their staff to go back through two to three years of sales receipts and find common sales numbers for certain product categories. Based on those common numbers, develop “magic number” prices in increments leading up to $10,000. “Prices on items in your store such as $395, $685, $950, $1,750, $2,695 and $2,995 sound much better during a sales presentation,” says Decker.
In his closing remarks, Decker asked retailers to return to their store and work with their staff on determining their most common price objections. “Write each sales objection on the front a recipe card and on the back of it write four to five sales responses,” says Decker.
Decker concluded his speech with an upbeat note on today’s economy. “There may be fewer customers coming in, but the ones who are coming to your store are more serious buyers,” says Decker. “Closing ratios in this economy should be higher.”