Too many jewelers are “too busy to make more money,” says sales and management consultant Shane Decker, and too many of their salespeople aren’t trained in the “30 second rule” or how to close a sale.
“The result,” he told 150 people in his “Ratcheting Up Ratios” seminar on Thursday, is that jewelers are “letting customers walk who want to give you their money-and instead they go to your competitor.”
Not surprisingly, Decker’s years-long research of thousands of jewelers finds that many aren’t closing as many sales as they should. The closing ratio for downtown jewelry stores tends to be 45% to 55%, while freestanding jewelry stores close 65% to 75%. (A way to find your store’s closing rate, he said, is to count the number of people coming in every day for a week. Then, add up your sales slips (minus repairs) for every day that week, and divide that by the total number of people).
Industry data also show that while sales overall are up in the industry, net and gross profits are down. The reason, said Decker, is that too many jewelers negotiate too much on price and don’t mark merchandise up enough.
Negotiating on price, Decker said, is “a cheap cop-out” to trying to close at full price. Also, next time that “negotiating” customer comes in, he will want more and will doubt the integrity of your pricing.
Other reasons jewelers’ sales ratios are lower than necessary are that “too many jewelry store owners are too busy working in the store-doing routine tasks like emptying the trash or putting merchandise in cases-instead of working on building sales and the business. That means such things as setting weekly and monthly goals for salespeople and the store, leading by example, and, especially, training staff now to sell high-ticket items and close sales.
“Your No. 1 priority is your customer, and your No. 1 asset is your people. But you need to train your people every week,” said Decker. “You can have a killer inventory and a good location, but what good is that if your people don’t know how to deal with customers, or how to take inventory out of the case and sell it.”
One example: “Teach your people that the first 30 seconds are critical, because that’s when a customer decides whether or not he or she wants to shop with you based on how-and if-your salespeople greet and respond to them.
Decker gave his audience a challenge. “If you have 30 people a day coming in to your store, set a goal for your store of closing 10% of them a day. If the average sale is $500 (minus repairs), that works out to $450,000 in a year. And set a goal of at least one add-on sale a day. At the end of the year, that works out to $150,000, or $600,000 when you add the two together.”