‘We Can’t Afford to Lose One Customer’

These are troubled times for retailers. Rising costs, consumer caution, and a weak and uncertain economy today are putting unprecedented pressures on jewelry retailers.

To help independent jewelers not only survive but also thrive during these challenging days, JCK asked a number of experts what advice they would give them.

This month, sales training and management expert Brad Huisken, a longtime industry veteran, tells JCK senior editor William George Shuster why “continuous” sales training and a proactive sales manager are crucial to success, and explains what jewelers can do to improve sales and business results.

Is it more difficult for small jewelers to cope than for large ones?

No. it’s equally difficult for large and small. I know a lot of independent jewelers who are having sizable increases, and I know chain stores who are struggling. It’s tough on the entire industry.

So, viability and success now depend on … ?

I really believe it’s the consistent application of good, sound business principles that determine the success or failure of a company.

Such as?

One thing I always preach is that if independents run their businesses based on statistical information, they’ll know precisely what they need to do to grow the business, increase it, or turn it around. Retailing isn’t really all that complicated. For example, if your sales are down 10 percent, there’s only one of three things, or a combination of them, that’s the cause: You’re not getting as many people into the store, you’re not selling as many of them, or you’re not selling as much to them. For each, there’s something specific to do to turn it around.

If you’re not getting as much traffic into the store, devote more time, money, and effort to advertising and marketing. If you’re not selling as many people coming in, put more time, money, and effort into sales training to teach your salespeople how to sell more of them. If you’re not selling as much to customers who come in, work on add-ons and sale bump-ups.

How can independents get more consumers into their stores?

They can’t depend only on advertising or walk-by traffic. Salespeople certainly need to take more responsibility for driving more traffic into the stores. They can proactively increase traffic several ways, beyond friends and relatives.

They should telephone or e-mail existing customers to get them to come in again. Pass out business cards to the people they come in contact with, like bank tellers, postal clerks, other moms at soccer games, those at PTA meetings, church groups, and the like. Ask existing customers for referrals. Network by joining civic groups, church groups, charitable organizations, the Rotary, the local Chamber of Commerce. Look for corporate sales opportunities. And salespeople should provide such exceptional customer service that it causes word-of-mouth advertising.

Explain how sales training can help.

Consider your cost per customer against sales per customer. Divide your expenses by your traffic. That’s your cost per customer. For example, you spend $1 million annually to operate your business, and you get 100,000 customers. That means it costs you $100 for each customer who comes in. If your salesperson doesn’t sell that customer, you might as well take a $100 bill from your business and burn it.

Also, traffic in jewelry stores this year reportedly will be down about 25 percent. Plus, the closing ratio for in-store sales now averages between 20 and 25 percent, meaning jewelers aren’t making sales to 75 to 80 percent of the people who do come in. So, it just makes sense for jewelers to do a better job with the traffic they get, and that stresses the importance of sales training.

Just having some product knowledge isn’t enough anymore. It’s essentially important that the person on the sales floor is trained to peak efficiency and correctly equipped to maximize every selling opportunity. That means knowing things like how to convert a repair to a sale, how to bump a sale up to higher-priced goods, or how to sell add-ons.

How much time should an independent allow for sales training?

It can’t be just an event anymore, meaning something jewelers do once a month, once a quarter, or once a year. It has to be a consistent, ongoing process. And look at how much time you devote to sales training. Some independents spend 20 to 30 days a year buying merchandise—going to the JCK and JA shows; to buying-group events; to Belgium, India, or New York for diamonds. Do they spend the same amount of time teaching their staff how to sell what they’re buying? Probably not.

What should training cover?

There are four areas where the sales staff needs to be trained. These are like four wheels on a car. If one is flat or going flat, the car won’t run as well. The four areas are product knowledge, operations, sales techniques, and customer service.

What should training include?

I have five criteria that must be part of a training program. The person learning something has to hear it, read it, write it, role-play it, and then be observed doing it in live presentations. A point about role-playing: We can’t afford anymore to practice on our public. We need to practice various scenarios in role-play situations in training.

Such as?

Turnovers are very important. A sale can go south for many different reasons—we say something stupid, offend someone unintentionally, or a customer is prejudiced against us for some reason. So, you’ve got to have a good turnover program, to turn over a sales situation and customers to the most appropriate salesperson.

Add-ons are another issue. The average jewelry store sells add-ons on 3 to 5 percent of sales. Teaching people how to sell add-on goods, to convert repairs to sales, to use layaway payments for sales could raise that to 20 to 25 percent for most jewelry stores.

What else is critical to in-store sales today?

The sales manager, I believe, is the single most important person in development of a store. That person has to be proactively involved in listening in [on sales], coaching salespeople, praising them, giving positive reinforcement, or taking over a sale going south to convert it into dollars and cents.

Who that person is depends on a store’s size. In a small store with three or four people, the sales manager is the owner. In larger ones, the store manager is the sales manager. But whoever wears that hat has more to do with the success or failure of a jewelry business today than at any other time.

What are some common mistakes in selling jewelry that are easily corrected?

One big problem is salespeople trying to sell based on reasons they think the customer should buy, not for the reasons the customer thinks he or she should buy. So, if I’m a salesperson, I need to base my presentation on what the customer thinks is important. If I ask a customer, “What’s important to you in selecting a diamond, a gift, or a timepiece?” there are various answers I can get.

If he doesn’t know how to answer that question, it means, “I don’t know. That’s why I’m here. I need your expertise.” If he says he’s done some research on the Internet, you’d better be ready to give a technical presentation. If he says, “I just want something she’ll be proud of,” be prepared to give an emotional presentation.

There are thousands of reasons people purchase jewelry. That’s why selling based on why the customer wants to buy is essential.

What comes next?

Demonstrating and creating value. Again, most jewelry retailers don’t do a good job of increasing their customers’ perceptions of value. Too often, they make price the issue—pulling a piece of jewelry out of the showcase, looking at the tag, and saying, “This piece costs this price.” But that doesn’t mean much to the customer yet, because you haven’t told him or her all the neat things about the product.

Another issue is that most salespeople are feature driven, and their selling is technical rather than based on the emotional reasons the customers are buying. More important to them are the product’s benefits. They want you to tell them what it can do for them, not what it has.

What else should independents and their salespeople do—or not do—in selling?

If you just spiel off industry jargon describing a product—which most customers won’t understand—they’ll just go away. So, if you do use jargon, explain it as a benefit to customers and what it does for them. Instead of saying earrings have lock backs, tell the customer, “A nice thing about these earrings is that they have lock-set backs, which means they’re doubly secure for you on your ears.”

That’s a good one. Anything else?

When salespeople make a sale, they should always get the customer’s name, address, and phone number for future follow-up. If the customer isn’t going to buy from them and isn’t comfortable enough with that salesperson to provide their contact information, then the salesperson should give someone else a shot at selling that customer and developing a relationship with them.

Let’s talk more about relationships with customers. How crucial is that?

Creating a relationship with your customers is more important than ever, so that when they want to make a jewelry purchase or have a jewelry need, it’ll be your business that pops into their minds first as their friend in the industry.

Think of your very best customer, one you’ve had five or 10 years, and consider what you know about that individual—their name, their spouse’s name, where they work, the car they drive, where they live, the number of kids they have and their names, the grandkids’ names. These are all personal things you know about your best customer. Now think about the customer you didn’t sell yesterday. What do you know about that person, and the answer is probably nothing.

What it all boils down to is the ability of the individual salesperson and sales manager to develop a relationship with another human being. When you do that, it doesn’t matter about your location, chain stores, your pricing, or other things.

Jewelers can’t always buy right or have the best location, the best selection of merchandise, or the prettiest store. But, they can always treat the customer right and sell right. That’s totally and completely within their control. And it’s very inexpensive.

Is there anything else jewelers can do now?

Jewelers need to distinguish themselves by carrying some kind of merchandise exclusively in their marketplace, something a little different that consumers can’t easily pick up at J.C. Penney, Wal-Mart, a chain store, or on the Internet. The jeweler can use that to position himself as stronger than the other guys. So, having unique merchandise and a fully trained staff with a proactive sales manager will set independent jewelers apart to the point where they can maximize sales.

Last question: What one thing can a jeweler do today to improve business?

Get on the sales floor and listen in on presentations. Then, coach salespeople, train them, and take over presentations that are going south. Remember: We can’t afford to lose one customer.