AGS Gets Down to Business

The American Gem Society may have built its reputation on ethics and education, but at its latest annual Conclave in Seattle, it wanted people to know it was equally about business.

Buttons worn by AGS executives proclaimed: “It’s all about the bottom line.” The major speakers were predominantly business focused, and the group launched its most extensive sales training program ever. (See sidebar.)

“You can be a very knowledgeable gemologist and meet every ethical business standard, but if you don’t have the skills to sell, you won’t be successful,” said Ruth Batson, AGS executive director. “It’s like a three-legged stool. I feel like we’ve finally added the third piece, but it’s going to take some time for our members to see us as the source for sales training.”

This new focus is partly a result of the tough economy, which is challenging even AGS’s high-end retailers. And while overall attendance at the conclave was higher than last year’s, there were fewer retailers this time around. “I was disappointed we didn’t see more retailers, but there are never enough, in my opinion,” Batson said.

She added, however, that “sponsorship support was at a record high, the fashion show was a sold-out event, and a number of guests attended from all over the world. In today’s economy I think this speaks volumes.”

Among the highlights of the event:

Keynote speaker Malcolm Gladwell, best-selling author of The Tipping Point, discussed how societal mind-sets change. “Successful transformations happen more quickly and easily than we imagine,” he noted.

He said that “if you look at successful examples of transformation, at the beginning there is a successful act of reframing. … If you talk about something in the right way, [people] will embrace it.”

One way to reframe the jewelry business is not to get stuck on price, Gladwell advised. “Let Wal-Mart talk about price,” he said. “If you can have a discussion about emotion, passion, people will make an exception for you. That is the opportunity offered by this recession. Change the conversation.”

During a follow-up session where he was interviewed by JCK publisher Mark Smelzer, Gladwell said the industry could reframe the conflict-diamond issue by supporting initiatives like fair-trade diamonds and noted that a similar approach worked with coffee, another problematic commodity. “You have to tell [customers] where the jewelry is created, who the people were that mined the gold,” he said. “You have to wrap [your product] in a much larger positive context.”

The key point, though, is for the frame to be consistent. “The reason ‘A diamond is forever’ was powerful is it was the only frame,” he said. “It was the only way of thinking about diamonds that stuck in our head.”

He also said that the industry needs to lure “mavens” (experts) and “connecters” who proselytize about a product. “When people are confronted with complexity, they need help,” he said, adding that Apple, in its highly successful stores, shows only a limited number of iPods. “You and your store have to play that maven function,” he said.

David Sisson and Claudia Rose of the Diamond Promotion Service opened their breakfast session on “Understanding the Mind of the Female Shopper” with an uncomfortable statistic: 80 percent of women would rather browse at clothing and bookstores than jewelers.

DPS research found that women often described jewelry stores as “the same” and “predictable.” “Fun,” “innovative,” and “welcoming” were at the bottom of the list, said Sisson. (The sole positive description: “glamorous.”)

Sisson noted that while 78 percent of diamond jewelry is a gift from a man to a woman, women also control 50 percent of consumer wealth, and many women are making a higher income than their husbands. “Many marketers are not connecting with [today’s woman],” said Sisson. “She’s a tough sell.”

Rose argued that women “think a bit differently” than men. “They are always looking not just for a good solution but the perfect solution,” she said. “Remember a woman’s prerogative to change her mind. She will switch retailers based on where she can get the piece she wants.”

Rose added that women “look for empathy and common ground. They want to be involved emotionally [with things like] trunk shows, meet-the-designer nights.”

Sisson explained that, by contrast, men seek knowledge. “A man wants to tell his buddies about the diamond’s size, its clarity, the metal,” he said.

But men are dependent on retailers for guidance about diamond jewelry, he noted, and they worry about being pushed around. “His greatest fear is getting it wrong, feeling stupid, or getting taken,” Sisson said. “Men really do have a lot to get over [when shopping for jewelry], whether they acknowledge it or not.”

Retailers should “avoid making the man feel dependent” and “help him be the hero.” When a man comes in with information from the Internet, “acknowledge the work he has done,” Sisson said. “Don’t contradict him.”

In the end, Sisson said, the man wants the woman to love the piece. “He wants to show he gets it,” Sisson said.

The sexes also evaluate jewelry stores differently. Sisson commented that cleanliness was important to women. “We had a consumer rip a jewelry store to shreds because the salesperson’s fingernails were not manicured,” he told the audience. Also important to women is a welcoming sales staff. Sisson said, “If people are on the phone, that was really annoying to them.” Women also look at a store’s window displays and unique merchandise.

A man notices whether the store is well organized and whether there’s a place to sit down. “A chair is very important,” said Rose. “If he is comfortable, if he is watching the game, or reading a magazine, the woman can spend more time shopping.”

The duo closed with the following advice:

  • Provide a clear return policy.

  • Have a knowledgeable sales staff. “Lack of diamond expertise” was frequently cited as a turnoff in surveys.

  • Display your prices and be able to verbally back them up. “Pricing and transparency is really a huge issue,” said Rose. “The Internet has changed that game forever.”

  • Have an ethical sourcing policy. “That could become one of those make-or-break things,” Rose says.

  • Sell reputable brands.

  • Let the woman try on the merchandise.

  • Maintain a low-pressure atmosphere; one-third of women said they feel intimidated by diamond sales staff. “Many people really feel attacked when they go into the stores,” says Rose.

  • Create a consumer advisory panel to get feedback from consumers. “Take your best customers to lunch and pick their brains,” Rose said.

Scott Ginsberg, the so-called “name-tag guy” who never takes off his name tag and even has one tattooed on his chest, preached the benefits of “approachability.”

“People need to think they can talk to you,” he said, and advised listeners to “lead with their person, and follow with their profession.”

He noted that people don’t buy products; they buy the people who sell them, and he urged jewelers to cultivate not just customers, but fans. “Fans are beyond customers,” he said. “They are loyal and they are insistent. So the question is not: ‘Is the customer satisfied,’ but ‘How many friends did they tell?’”

He said consistency was important in building fans. “People are going to challenge your commitment,” he explained. “Consistency is far better than rare moments of greatness.”

Lastly, he advised retailers to be unique—not different. “You need to be able to finish the sentence: ‘Our jewelry store is the only one who … [fill in the blank],’” he said. “What are people saying after your store’s name? If you do not make a name for yourself, people will make a name for you.”

“Brand futurist” Martin Lindstrom, in a lively, multimedia breakfast session, said brands need an “unmistakable touch point.” Ideally these touch points should appeal to different senses. They should have a smell, a sound, and be recognizable even if not in their original form, the way a Coca-Cola bottle is.

Among recognizable brand touch points: Coca-Cola’s red, Starbucks’ green, and the sound that Lindstrom said fills him with dread—the Microsoft tune that plays when his computer boots up.