How to Get Smart About Raising Prices

All shoppers love a good deal. But when it comes to jewelry, a consumer category famous for its broad price variances, a bona fide bargain is a relative thing. And jewelers looking to raise prices—and get off the discount merry-go-round for good—need to implement smart strategies to help their customers understand the concepts of value and investment.

When selling, retailers should discuss the intrinsic value of a piece of jewelry, says Derek Halpern, founder of marketing consultancy Social Triggers. “If you describe to the buyer why the price is the way it is, they’ll usually agree with you,” he says. This may include a brief discussion of the value of the materials used in the piece: “You can say something as simple as, ‘Sure, there are cheaper options, but we want to focus on our quality.’?”

And remember, a good story goes a long way in a sales pitch. ­Jewelers “need to emphasize what makes their jewelry special,” says Halpern. “I recently bought pearl earrings for my girlfriend, and I ended up spending a decent amount of money because the saleswoman explained the story behind where the pearls came from. People are willing to pay a premium for the story.”

Stefania Pinton, a consultant and partner at Dionco Inc., says customer education is key to pulling off price hikes. “It really is a matter of teaching the customer the importance of investment,” she says. “You have to present it in terms of ‘you get what you pay for.’ The more value you can communicate and address, the more positive the response to slightly higher prices.” In short, it’s about distinguishing between cost and price. “Price is what you pay today,” says Pinton. “Cost is what you pay over time. Retailers need to start thinking ‘I’m selling value and quality and I need to teach the customer this is what I’m selling.’?”

And in an era when big-box stores sell diamonds, competing on price alone is a fool’s errand, adds Pinton. “If you want to be the lowest-priced ­jewelry store in the market, good luck,” she says. “Because you’ll always be killed by competition. Put together products that are unique and train your staff the best possible way to understand the intrinsic value of your product.” For example, “A local designer or unique story can justify a higher price,” she says.

Both Pinto and Halpern agree that adding value to product that’s been priced higher can counteract potential sticker shock. “Don’t do a sale by doing 50 percent off,” says Halpern. “Do it by saying, ‘The cost is $500 and we’ll also give you one year of free cleaning if you buy in the next seven days.’?”

Pinton also recommends experimenting with packaging when modifying prices. “Sometimes packaging different items [together] as a complete solution, and pricing it accordingly as a deal, is appealing,” she says. “They’re not comparing the price of the individual item because now they have a bundle.”

But one surefire way to boost prices with minimal blowback is to carry pieces that are special and inherently valuable. The price is “a result of how convinced you are that you’re carrying the right product for your customers,” says Pinton. “The right angle to take is, ‘I sell phenomenal products.’?”

(Mlenny Photography/Getty Images)

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