Here’s a little management test: Have all your employees write a two- or three-sentence answer to the question, What is our value proposition? You’ll probably get almost as many different answers as you have employees. While this is neither good nor bad, it demonstrates how little thought (or consensus) stores have in this area of their business.
Your value proposition should inform all your choices and deliberations as you prepare for show season, plan budgets, and conduct vendor and product research. This is your litmus test; it needs to function as your business conscience. It’s a critical tool to use as you prepare to stock your store with inventory for the coming selling seasons.
How are you perceived by your local customers and potential customers? Are you sure? Is it how you want to be perceived? Your value proposition must match and reflect your store’s business.
Value propositions are as different for a high-volume, low-margin jeweler as they are for Tiffany or Harry Winston. If you have a skilled watchmaker on staff, sell some of the finest Swiss time-piece lines, and carry premium-quality 2.00+ ct. loose diamonds, you obviously have a different value proposition from a store that specializes in batteries, watch replacement straps, and Casio G-Shock watches. Ask some of the people who walk into your store the management-test question above and see if their answers come even close to your employees’ responses.
When asked how he provided value, Nagi Osta, of Nagi Jewelers in Stamford, Conn., related a story that reveals a jeweler who knows what his value proposition is and lets it infuse his daily business practices. (Nagi went from a small strip-mall store changing watch batteries and selling straps to a fine guild independent jeweler with a handsome freestanding store in less than five years.)
A woman walked into his store with a detailed quote for a nice diamond from a recognized online retail diamond store. She wanted to know if Nagi would meet the price and, if not, at least set the stone for her. He recognized her from some past small transactions but knew she purchased significant jewelry at some of the other fine jewelers in the area. He asked her for a day or two to do some research, and, using a copy of her information, he located the exact same stone through a wholesaler and ascertained his cost to acquire it. When the woman returned he told her it would cost almost $1,000 more to buy the stone from him. She was shocked and prepared to buy it online, but Nagi asked what she was getting from the online merchant in addition to the stone. She replied, “Just the stone, the certification that came with it, and a money-back guarantee.”
But Nagi understood his store’s value proposition. He let her know that while he was more expensive, he was prepared to set her stone for only the cost of the finding. He also would regrade her stone to be sure it matched the original certificate, clean and polish it at any time, and resize the ring later on. Additionally, as “his” ring with “his” stone, he would check and repair the prongs as needed and provide insurance appraisals (as a Gemological Institute of America graduate gemologist and an American Gem Society-certified gemology appraiser), all at no additional cost.
He sold her the stone and ring. She’s now a regular client who spends over $100,000 a year with him. By knowing his value proposition and being able to articulate it, Nagi captured her heart, mind, and a fair share of her wallet. He moved an affluent potential customer from a price-sensitive nibbler to an important value-savvy client who also has recommended Nagi Jewelers to some of her best friends.
What’s your value proposition? Can you and your employees articulate it to every customer who walks in?