The 5 Ways You Can Compete in the Jewelry Industry
I often see many diamond dealers and jewelers struggling to compete with one another and it is usually because they are focused on competing with each other all on one premise. It is typically a competition based on who can deliver the lowest price. However this is a losing battle.
Some of the techniques and concepts that I will mention will be discussed from the book How to Sell at Prices Higher Than Your Competitors by Larry Steinmetz.
So before we get going, what are the 5 ways to compete in the industry if you are selling diamonds to the consumer?
The 5 Primary Ways to Compete
- Sales Capacity
Price is typically the default way to compete. However, keep in mind that when you compete on price you are bound to lose because price buyers are always looking for a deal and they are not loyal to you or your brand. Just as if you were to visit another country and a little kid was to dangle an object at you and keep saying two dollars.
The same happens in many stores whether they are jewelry stores or retail stores. They dangle in front of you specials such as 30% off or 50% off. They may even mention buy one get one half off - but the concept is the same. Often times they hike their prices up just to be able to offer you a discount so it appears that you are getting an item for cheaper. This is all playing towards the psychology part of the purchase. In either case, they are all attracting you to a lower price. This is not the right way to win over a buyer.
Price buyers are not loyal. If they do want to purchase from you but they are price buyers they may try to negotiate with you saying that another store has the same diamond at a lower rate. (Not always the case). They typically will do this because either they can not get that diamond at that rate, prefer your service, trust you more, or just don't want to deal with the other shop.
In other words, you should not compete solely on price since your making a minuscule profit on your merchandise. There are much better ways to go about it.
Service is another area that you can compete on. I want you think about the service you get when you walk into Tiffany's. You don't just get a jeweler or a sales person - you get an jeweler concierge. One that helps you find the perfect jeweler piece to either match your outfit or to get you the perfect gift for someone else.
Or let me give you a second example. Imagine that every time your lawn or pool service company came to visit you they did something a bit extra. Maybe they fertilized your grass, or cleaned your patio furniture, or watered your plants. Whatever the case is, this is an extra added service that they are doing and giving you a far better and additional value.
Think of what ways you can add service to your jewelry or diamond customers that walk in. Maybe you can offer then free diamond or gold cleaning for life? Of course this adds up over time but you are able to constantly maintain that connection with them. Maybe once a year you could send them a polishing cloth, cleaner spray, or something similar. What you do is up to you - just start being creative in giving the extra added service.
Delivery can be a make it or break it for many business owners. If you want to mess up in the most critical part of the sales sequence - delivery would be it. Think of it this way... from the time the customer orders a diamond engagement ring and paid for it to the time they have it in their hand sometimes there is a delay. For example you may need to resize the ring or even ship it to them. Messing up this part such as getting it lost in the mail, delivering it to the wrong address, or improperly sizing it could be disastrous.
So definitely do not mess up the delivery!
On the other hand, I want to give you something to think about when delivering your service. This can be a way to bring out more word of mouth marketing to your business. If you are a lawn service business and you are cutting the grass in a tuxedo this is something bizarre and outrageous than the normal grass cutting service. It gives people something to talk about (hence the word of mouth) and therefore your delivery is outstanding. However, not everyone is willing to go that extra mile to have excellent delivery.
Think of Dominoes Pizza - the premise of the business was pizza in the 30 minutes or less. The Tiffany teal box - it's delivered with a quality presentation and everyone recognizes it. There are dozens of examples out there. You don't have to mimic someone else, but delivery is another component that you can use to connect with your diamond customers.
How good of a sales person are you? This can totally give you a leg up on your business. If you are a better sales person, one who connects that much more than the other jewelry store or diamond dealer then you can have a huge edge.
I'm sure you have heard of or seen those pushy car sales men before and the fact is that having a great sales mindset is not always about selling but it's about building a relationship. One that connects with the prospects in a deeper level whether its through a story, a joke, or just some external connection like an activity.
Think of the connection that many golf players have when they go out golfing. Many business dealings are done through golf because its a way to connect to one another. When you connect to the other person you build a sense of trust and this allows you to do business in a relaxed way.
The end result is usually very positive either accomplishing more business dealings, product sales, or a company merger.
Let's step back for a moment though - How can you connect with people who are buying diamonds or engagement rings? Think about it for a moment... where do these people hangout? What are they doing? For example, if many of them are doing dating activities it may be wise to connect with vendors or activity places that are some what casual that many people hit or go to this way you can start the connection process before they even decide to look for a ring. The end goal is to make the connect as close as you can before they take action and start shopping around this way you are not just the first one to pop into the buyers mind - but the one they can't forget or the one that comes to their mind first.
Quality is the last competition point. Think about buying goods or shoes that never wear out. A product that you may spend $200 dollars on which might be twice the price of regular shoes - however the product will last because the quality is just so good!
Quality doesn't have to be durability. It can be product design such as the product is designed with the comfort of podiatrist expertise who helped design these shoes.
Regarding diamonds, if you have better quality items or inventory you may be able to attract a higher grade consumer. Now you may do so not just in the diamonds themselves but in the types of grading reports that are available such as GIA grading reports versus other reports. You may also decide to carry only D, E, F, and G color diamonds which will bring up the sense of quality of your store or in conjunction with carrying only F, IF, VVS1, VVS2 diamonds.
This may elevate your store quality and feel based on the merchandise you carry. It's a way to imply a higher quality.
Don't get too wrapped up in competing solely on price. This is what most people try to do and where most people jump to as a default. If you compete solely on price you will limit your business to only price or bargain shoppers and this is not what you want in the long-term.
Create relationships with customers that can last for years and build solid connections where they want to and feel so great and compelled to refer friends or relatives to your store because of the exceptional shopping experience that they had.