How To Sell More Diamonds

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How To Sell More Diamonds

• National Pawnbrokers Association Presents
• Curtis W. Sutherland

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Overview

• History
• Goals
• Constant Change Evolution
• How to Build the Business
• Framework 4 Ps of the Marketing Mix
• Closing the Sale
• Curtis Top 10 Tips

3
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
• Didnt know any better sold it for 500 next
  day
• Took 500

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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

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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.

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How To Build The Business

• Pragmatic discussion
• Will discuss a framework that helps us to
  categorize our approach

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Framework 4 Ps

• Product
• Selection
• Understanding market demands
• Price
• Objectives
• Strategies
• Levels
• Placement
• Sales (direct and indirect)
• Promotions
• PR, Ads, Direct Response, Events, Online

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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 marketas you reach out
  nationally (via the Web)
• First, learn the business locally

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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 (nowwith the volume)
• Specialize in clarity enhanced
• Those that have developed a reliable supply chain
• Memo (side business)
• Memorandum, consignment (broker other peoples
  inventory)

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Product

• What kind of diamonds?
• Natural
• Generic graded by 4 Cs
• 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

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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 fluctuateswe
  flow with it (Dell model)
• Pink diamonds flood the market, weve already
  liquidatedjewelers are caught with overpriced
  inventory
• The shampoo model (rinse and repeat)

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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)

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Promotions

• Everything is designed to generate traffic and
  leads
• PR
• Advertising
• Direct Response
• Events
• Online Marketing

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Promotions

• PR
• Donate to the childrens 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 Childrens Hospital
• Got 25k of PR value (direct sales, advertising)

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Promotions

• Advertising
• TV Ads for 1 year
• Modest return break even ROI
• Radio
• Live remotes (bring van to location w/DJs)
• 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
• Craigs List (free) sales sections (like
  classified adsthe item sells (period)). One at a
  time.

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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)
• Wont be offended if they get a specific,
  targeted e-mail (very personal, not spam)
• Tried door-to-door flyers
• nuff said

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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
• Dont 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

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Promotions

• Online Marketing
• Ebay Craigs list (already touched on)
• Website
• Search Engine Optimization
• Lets 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

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Closing The Sale

• If you have 100 leads and a 0 close ratiohow
  much will you make?
• If you have 1,000 leads and a 0 close ratiohow
  much will you make?
• If does no good to generate a TON of leads, if
  you cant CLOSE the business
• You either close or you will be closed

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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..

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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

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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?

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Closing The Sale

• Hot Buttons
• Hot Buttons are also buying
  signals. Always listen for your
  prospects 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 Ive seen
• I would be a fool to pass this up
• This should help me

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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, wouldnt it? The average customer
  saves over 300 by buying their diamond here.
  Thats pretty good, isnt it?

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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

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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, isnt it?

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Curtis Top 10 Tips

1. Set goals
2. Start locally
3. Understand Your market
4. Find a unique product (clarity enhanced)
5. Consider indirect sales to leverage others
6. Promote with PR and ads
7. Consider direct mail e-mails
8. Create an online presence (to go national)
9. Dont be like Samson (jawbone)
10. Ask for the sale!

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Conclusion

• Will everything I mentioned work for you?
• Nobut some of it will.
• You can grow beyond your current boundaries, meet
  your goals and achieve your dreamsif you follow
  this roadmap
• Whats holding you back?

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