This D.C. diamond guru is proof that video didn’t kill all the radio stars
Before John Sabet could sell to political power brokers in D.C., he knew he had to get to know the industry’s diamond brokers, so he set off to get a diamond education that would position Charleston Alexander Diamond Importers as the area’s largest source of loose diamonds and bridal jewelry. Confident that approach would translate into sales, in 2003 he embarked on an ambitious expansion plan. Today, his operation is poised to realize $50 million in annual revenue. Something of a contrarian, Sabet places heavy emphasis on radio ads—many of which he voices himself! And he competes with the Internet’s pure players by offering superior products backed by superlative customer service.
With on-demand media, most retailers are running away from radio. Why do you stay?
More than 239 million people interacted with radio each week in 2010. That’s 4 million more than radio’s weekly audience in 2009, according to news articles quoting last year’s Arbitron’s RADAR 106 report. I know for a fact it’s working. I cut radio advertising from January to March this year; business for me dropped by 25 percent. In April, when I started back up with radio, business was immediately better.
In your markets, what stations work well for you?
Both of my stores attract radio listeners in D.C. For this market, local news is national news. Roughly 10 percent of my marketing budget goes to six stations, with news station WTOP FM getting 43 percent of my radio budget. After news, I diversify with other formats, including pop, rock, classic rock, easy listening, and country. Our core message to D.C.’s young, affluent market is that we’re a diamond authority and Charleston’s is where D.C. gets engaged.
You created a mammoth 16,000-square-foot store that was built for growth. How are expansion plans?
We started in September 2003 and finished in November 2005. I didn’t want to create a store, but a Bethesda landmark. I had to think in grand terms. Nearly every part of the store is custom, from flooring choices and display cases to lighting fixtures and ceiling features. For now, the second floor is used for shows and designer events, but we’ll soon be showing even more loose diamonds and bridal jewelry in the 7,000-square-foot space upstairs. On both floors, we have 10 private diamond-buying rooms. We wanted a wholesaler appeal in a retail environment.
But you’re expanding by doing more bridal with fewer vendors.
Five years ago, I had 50 designers. Now I have 12. I felt like I was managing a bunch of brands, not a store. Another problem was money wasted on carrying multiple brands and duplicate styles from different bridal vendors. Now I have my top vendors and simply go deep in their top sellers to have a variety of price points and designs. And by limiting my number of designers, I am a better retail partner to those I carry.
On average, succession planners advise retail jewelers to put 25 percent of profits back into a business. But you do more.
We’ve always reinvested 75 percent. I don’t have exact figures, but the lion’s share of profits are reinvested in loose diamonds and semi-mounts. If you want to be a market leader in loose diamonds and bridal, you have to dominate that market. For 1 carat diamonds, the most popular engagement ring center stones, we have over 120 in stock at any given time. To me, it’s simple: If you have more diamonds and more semi-mounts to set them in, you make more sales.
You have a custom URL, WhereTheDiamondsAre.com, that doesn’t mention your store name. How does that benefit your business?
My URL is easy to remember and it succinctly describes what we specialize in: diamonds. And it’s a very radio-friendly Web address. Plus, I’m the voiceover for many of my own radio commercials. People actually say to me, “Hey, you’re the WhereTheDiamondsAre.com guy!” In addition to building a brand in-market, it’s also good for out-of-market sales. As we expand our e-commerce operations, this Web address is doing more good for my business than I had originally anticipated.