Transcript How To Sell More Diamonds

How To Sell More Diamonds
National Pawnbrokers Association
Presents
Curtis W. Sutherland
Overview
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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
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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)
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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
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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:
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“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
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“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
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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?