Service—combined with the ability to touch jewelry vs. staring at a two-dimensional computer image—is routinely touted as the independent jeweler’s advantage over the Internet. But in order to capitalize on this advantage, you must closely examine your level of service so you know what it feels like to shop at your store. If you don’t pamper customers, you risk losing them.

That’s the contention of David Nygaard, president of David Nygaard Fine Jewelers, Virginia Beach, Va., who goes to extraordinary lengths to make sure his customers feel special and have fun. “If your customers fly first class, they expect first-class treatment wherever they go,” he says.

What does this have to do with branding? A lot, says Nygaard, because he’s elevated his pampering to such a level that it makes him stand out in his region, and that’s successful branding. More to the point, he’s tried to brand the experience of shopping. “As jewelers, we have to create that level of service that translates into something different and unexpected, that makes people feel they’ve been wowed,” he says.

How to wow. Over the past two years, Nygaard and his staff have transformed the shopping experience. Their goal is to surprise and delight. “We try to find out whether they’re here to learn, to be romantic, or to be pampered,” he says. “If they’re here to learn, we teach them in the diamond room. If they’re here to be pampered or be romantic, we take them to our private salon that’s more private and intimate.” Memorable add-ons include live jazz performances, mimosas on weekend mornings, catered lunches, and luxurious thank-you gifts. These elements add to overhead, but they’re also factored into the store’s markups.

“The fact that storewide markup has increased 19% over the past two years has way more than made up for the cost of these extras,” says Nygaard. Average retail prices have increased between $400 and $500 in some categories, while in other departments, average retail tickets have increased between $4,000 and $7,000. So far, Nygaard has seen no resistance to price increases, and he believes that “it’s quite possible to return to a keystone business.” Store revenues increased 35%, and the quantity of units sold has increased as well, by nearly 20%, during that same two-year period. “There’s a myth that if you increase your mark-up, you will have less sales. If you’re doing it right, that’s just not true,” Nygaard says.

The challenge of the experience-based brand, he says, is that it’s “difficult to perfect, because you can’t perfect people or the experience. By comparison, a manufactured brand is product-driven, and you can perfect a manufacturing process much more easily.”

Nygaard likens the transformation in the marketplace to the shift that took place 20 years ago, when many manufacturing jobs were lost to automation and replaced by service jobs. “Today we are seeing the same thing happening in the service economy as it becomes automated and commoditized. The Internet is the greatest force for commoditization known to man. If we do not move to the next level of economic offering, which in this case is the experience of buying at our store, we’ll be stuck selling commodities.”

Here are the strategies Nygaard uses to reach the “next level” of customer service and establish his store’s image as a unique retail brand.

• Appeal to customers’ five senses. The store always displays fresh flowers for both visual and olfactory appeal. Homemade hot cider is offered in winter, complemented by an apple cinnamon potpourri that most customers associate with the cider. In summer, the firm pours homemade lemonade. Mimosas are given away on Saturday mornings. Catered lunches are served each Saturday for 30 to 60 people. A jazz band plays on weekends throughout the year and every day in December. Even customers who are just browsing are handed a bar of chocolate with the store’s logo on it as they walk out the door. “I always tell them I want them to leave with a good taste in their mouth,” Nygaard says.

• Intensify the experience. Luxurious details enhance the experience for customers. The hot cider is served in fine china, the lemonade in crystal champagne flutes. Sterling silver flatware and fine china are used for refreshments, and cocktail napkins have the store’s logo embossed in gold.

• Extend the experience beyond your doors. If a customer makes a purchase of $1,500 or more, the store typically has a florist hand-deliver a Waterford bud vase with flowers as a thank-you gift. “We want it to drive word-of-mouth,” Nygaard says. A young man from a singles group who spent $600 received this gift, because some of the group’s members were getting engaged. “We wanted to thank him at a level where he would not just be satisfied but be enthusiastic,” says Nygaard, who aims to attract future engagement ring customers from the group.

• Keep the experience evolving. The store varies its thank-you gift for repeat purchases. After the bud vase, a customer might receive a hand-delivered Waterford crystal bowl filled with chocolate or potpourri. The firm plans to record its jazz band—which also provides background music for its television commercials—on a CD, which could be used as a thank-you gift, sending the store’s soundtrack into customers’ homes.

• Consider customization. The firm customizes transactions to meet customers’ needs, and salespeople are empowered to make decisions. For instance, a salesperson could extend the firm’s return policy for a young man who plans to propose but isn’t sure his intended will say “yes.” Warranties can be extended upon request, or goods can be offered without warranty if the customer asks for the very best price. Also, the firm can print out disclosures specifically for each gemstone and hand them to the customer at purchase.

• Be as visible as possible. In September, David Nygaard Fine Jewelers moved across the street, from a strip center to a freestanding store where 65,000 cars drive by daily. Over a month-long period, the store made arrangements with five of the finest local restaurants to give every Saturday-night customer its fancy shopping bag, which held a $25 gift certificate and a map to the store. So far, the strategy has resulted in four sales in the $6,000 range. “I want people at expensive restaurants to be seen with my bag so it becomes a key regional brand,” he says.

• Nygaard has also appeared with his children in public service announcements that run on his local NBC affiliate. The topic: the importance of spending time with your kids. The public service announcement runs two weeks out of every month and was changed three times in the last year as his children grew older.

• Transform relationships. Nygaard contends that the “experience economy” will be superseded by the “transformation economy,” in which businesses play a role in transforming relationships. His firm plans to invite Cynthia Marcusson of Cynthia Renée in Fallbrook, Calif., to conduct a seminar on “how to express yourself as a woman through your wardrobe.” Friday afternoons last December included high tea (with home-baked scones) and a series of seminars. Topics included “how to set a holiday table” and “10 essential pieces for a jewelry wardrobe.” The firm also provides one-on-one coaching for young men who want advice on how to propose.

Background on Branding

David Nygaard recommends the following books on branding and the American economy:

• The Experience Economy: Work is Theater & Every Business a Stage, by Joseph Pine II and James H. Gilmore (Harvard Business School Press, 1999).

• Eating the Big Fish: How Challenger Brands Can Compete Against Brand Leaders, by Adam Morgan (John Wiley & Sons, 1999).

• The Omnipowerful Brand, by Frank Delano (AMACOM, 1998).

• Building Strong Brands, by David Aaker (Free Press, 1995).