No question, the current environment in the jewelry industry is one of struggle. In conversations with retailers, wholesalers, and manufacturers, the word struggle may be an understatement. Some time ago, I clipped a highlight box from Investors Business Daily and taped it to the keyboard of my laptop. The five points are from John Chidsey, the CEO of Burger King. Though I no longer have the full article, the expansion and application of the five themes to the jewelry business is mine. You may be thinking: What do burgers have to do with jewelry? Please have a bit of patience and read on.
1. Focus on two or three major drivers that will make the biggest impact on your business. In times like this, that statement is akin to the old line that it’s tough to remember that the objective is to drain the swamp when you’re up to your neck in alligators! Job 1 remains revenue generation. Job 2 is expense and cost control and reduction. Job 3 is cash management and preservation.
In today’s marketplace, with job layoffs and headlines filled with bad news, it’s easy to dwell on the negative and lose focus. But the employment rate is still 92 percent of the population, and roughly the same percentage of mortgage holders are paying their mortgages on time. Jewelry’s relevance and importance remains for special occasions: engagements, weddings, anniversaries, special birthdays, and other times that require recognition.
2. Create and maintain a sense of urgency and risk taking. This is important. While others dawdle and focus on the negative, you need to focus on opportunities, fix problems, and move on to the next big idea. This requires continuous and effective communication with your employees and customers. Your business needs to stay in touch with those who produce and provide the revenue—in that order. Your sales staff is the obvious key driver here. It’s also why keeping a database of clients’ key dates and preferences is so important.
Perhaps less obvious in the sense of urgency, risk taking, and communication are advertising, sales promotion, and public relations. Certainly, not all of your advertising, sales promotion, and PR is equally effective, and it’s appropriate to evaluate and eliminate elements of your marketing mix that aren’t useful. But eliminating it all in the pursuit of expense reduction is unwise. The market will turn around. Be sure your customers know you still exist and are functioning. Your message may change to focus on affordable price points rather than “image and high-price products.”
Risk taking involves trying new approaches to your business, and your employees can play an important role here. Engage them. Solicit their opinions. Listen to them. Keep your ego at bay while doing so. You will find kernels of wisdom for revenue generation and cost reduction, and—equally important—you’ll have your employees’ involvement in the business.
Next month, I’ll continue with the other points. Remember: Stay positive.