How To Sell More Diamonds

How To Sell More Diamonds National Pawnbrokers Association Presents Curtis W. Sutherland Overview • • • • History Goals Constant Change – Evolution How to Build the Business – Framework – 4 P’s of the Marketing Mix • Closing the Sale • Curtis’ Top 10 Tips History • 1977 – Bought first diamond • 1981 – Started pawn store – Making $1,000 a month • Had $200 in the bank – Buying & selling on the side – Went to gun show • $125 – bought 1.25 ctw melee – Didn’t know any better – sold it for $500 next day • Took $500… Goals • 10 Years ago I was selling 100 Rolex a year • Set a goal to sell 150 – sold 160 • Set a new goal to sell 365 a year – Missed that goal, only sold 363 that year ;-) • Next year, sold 400..a LOT of work • New goal was 300 – Now sell 300-400/year like clockwork Constant Change - Evolution • Evolution of personal diamond sales – 20 years ago – small melee rings – 5 years ago – sold quality 1/2 ct solitaires – 2 years ago – sold any 1 ct diamond – This year – any 1.5 – 2 ct diamond • Only sell ½ ct as 1 ctw studs • Only sell melee when we manufacture, etc. How To Build The Business • Pragmatic discussion • Will discuss a ―framework‖ that helps us to categorize our approach Framework – 4 P’s • Product – Selection – Understanding market demands • Price – Objectives – Strategies – Levels • Placement – Sales (direct and indirect) • Promotions – PR, Ads, Direct Response, Events, Online Product • What product (diamond) will you sell in a college town? • What about New York City, 5th Ave? • You must know the market demographics in your area • You can expand your market—as you reach out nationally (via the Web) – First, learn the business locally Product • Where do you get your inventory? – Pawn Loan Defaults – Off the Street Purchases – Diamond wholesaler vendors who support the NPA • Various suppliers • Our company (now…with the volume) – Specialize in ―clarity enhanced‖ • Those that have developed a reliable supply chain – Memo (side business) • Memorandum, consignment (broker other people’s inventory) Product • What kind of diamonds? – Natural • Generic ―graded‖ by 4 C’s • Branded ―Ideal Cut‖ (meets basic specs) • Makes ―unique‖ cut / something different (positioning) – Treated • Color treated – brown, yellow, green, blue, orange, pink • ―Clarity enhanced‖ – graded at the new enhanced level – Examples: – Key is to find a unique niche that separates you from the masses (jewelers or other pawn stores) where you can be REALLY good. Compete on product, at a unique price… Price • Pricing objectives (22 options) – Target market share (period) • Pricing strategies (cost or market-based) – Market-based (what market dictates) • Multiple strategies (premium (jewelry stores), bundle, cross-benefit, etc.) • Go with penetration pricing – Secondary wholesaler (too much competition in retail) – Volume will build market share • Pricing Levels (actual price per diamond) – Retail has a BIG margin and BIG overhead – Secondary wholesale, quick turns, low risk (not caught holding the bag), market fluctuates—we flow with it (Dell model) • Pink diamonds flood the market, we’ve already liquidated—jewelers are caught with overpriced inventory • The shampoo model (rinse and repeat) Placement - Sales • Direct – Store sales • Indirect (Sell through others) – Family & Friends – Group meetings • Church, clubs, neighborhood • Speaking events (educational, show & tell) – House parties • Tupperware & Mary Kay model – Educational approach » What to look for, how to source, becoming an expert source – Help others to become diamond brokers • Examples ($40k, $25k) Promotions • Everything is designed to generate traffic and leads – PR – Advertising – Direct Response – Events – Online Marketing Promotions • PR – Donate to the children’s hospital • Had an auction – Tickle Me Elmo • Radio required to announce public service announcement quota • TV station did live announcement • Come into the store to write your bid – Produced new sales (donations, Elmo) • Funds donated to Children’s Hospital • Got $25k of PR value (direct sales, advertising) Promotions • Advertising – TV Ads for 1 year • Modest return – break even ROI – Radio • Live remotes (bring van to location w/DJ’s) – Works well with special events and sales – Newspaper • Classified ads for specific items – Great results (sell almost 100% of what we place) • Display ads – So, so results (hard to track) – Magazine • Town & Country (island ad) – – – – Entire new clientele, high-end for ―clarity enhanced‖ Ad used co-op from Diamond wholesaler (that we used) ROI was excellent – ad only listed one reseller/town (us) Cost us nothing, and produced $12k to $25k single sales – Online • Craig’s List (free) – sales sections (like classified ads—the item sells (period)). One at a time. • E-bay (whole other seminar) Promotions • Direct Response – Direct mail • Sent letter of introduction to 63 jewelry stores in Austin • Over the next year, received over $70k in sales – Direct e-mail • Now do similar, but use e-mail (saves printing and postage) • Know who is interested in a specific item – Rolex (exact type) – Specific diamond size, clarity, etc. (sent out to 50 contacts) – Won’t be offended if they get a specific, targeted e-mail (very personal, not spam) – Tried door-to-door flyers • ―nuff said‖ Promotions • Events – Mentioned some already (PR) – Tried by invitation only sales • Worked well, but irregular results – First time, sold about $40k that night – Second time, sold about $14k that night – Third time, sold about $5k that night – Put items in live auctions • Local and online • Put items in at cost, split the profit – Don’t want to pay large % on expensive items – Business groups • Leads group – 1 per type was allowed to present/quarter – Still deal with some of the same people met 15 years ago! – Revenue equates to apx. $1,500 per hour spent Promotions • Online Marketing – Ebay & Craig’s list (already touched on) – Website • Search Engine Optimization • Let’s start with – – – – A computer E-mail A website Then – optimize it – E-mail marketing (covered under direct response) • All promotions are designed to generate traffic (leads), however… Closing The Sale • If you have 100 leads and a 0% close ratio…how much will you make? • If you have 1,000 leads and a 0% close ratio…how much will you make? • If does no good to generate a TON of leads, if you can’t CLOSE the business • You either ―close‖ or you will be ―closed‖ Closing The Sale • The best close, is an enthusiastic presentation (or discussion) • The discussion must identify their needs (a bracelet or a ring) • To find their needs, you MUST listen • Story of Samson.. Closing The Sale • Quoting scripture – Samson slew a thousand Philistines with the jawbone of an ass… – Every day, a thousand sales are killed with the same weapon • SHUT UP… and listen. They will tell you their ―hot buttons‖ Closing The Sale • Buying Signals – A good way to tell if you are listening effectively and personalizing your discussion to fill needs, problems and desires is through ―Buying Signals.‖ • Examples of Buying Signals: – – – – ―How much does this cost?‖ ―Do you think my wife will like this?‖ ―How does it compare to the jewelry store?‖ ―Do you have a payment plan?‖ Closing The Sale • Hot Buttons – ―Hot Buttons‖ are also buying signals. Always listen for your prospect’s ―Hot Buttons.‖ – All needs, problems and desires that are brought up by the prospect are ―Hot Buttons.‖ – Examples • • • • • ―Buying here would save me a lot of money‖ ―I could get twice the diamond I planned on‖ ―This is the nicest diamond I’ve seen‖ ―I would be a fool to pass this up‖ ―This should help me…‖ Closing The Sale • Hot Buttons – Whenever your prospect gives you a ―Hot Button,‖ STOP what you are saying and build upon his ―Hot Button‖ with exciting, positive comments.‖ • Prospect: ―This would save me a lot of money‖ • You: ―It would, wouldn’t it? The average customer saves over 300% by buying their diamond here. That’s pretty good, isn’t it?‖ Closing The Sale • The big How To… – ABC of closing (always be closing) • Step one – Ask for the sale • Step two – Ask for the sale • Step three – Guess… Closing The Sale • Assumptive Close Question – Assume the order • How would you like to pay for that? • Physical Action Close • Pen rolls out of your hand into theirs • Move over to the cash register • Alternative Close Question • Would you like to use credit or cash? • Subordinate Close Question • How are you going to present this to her/him? • Key: Have a close question and ASK IT – Good idea, isn’t it? Curtis’ Top 10 Tips 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Set goals Start locally Understand ―Your‖ market Find a unique product (clarity enhanced) Consider indirect sales to leverage others Promote with PR and ads Consider direct mail & e-mails Create an online presence (to go national) Don’t be like Samson (jawbone…) Ask for the sale! Conclusion • Will everything I mentioned work for you? • No…but some of it will. • You can grow beyond your current boundaries, meet your goals and achieve your dreams…if you follow this roadmap • What’s holding you back?