Entering The Market As An Emerging Jewellery Business
(Transcript of a presentation I gave at Australia’s first Jewellery Industry Virtual Fair)
What is your Unique Selling Proposition (USP)?
How will you stand out?
Who are you? Why should I buy from you? I appreciate that your talented and a friend recommended you but is that enough?
You need to contemplate something that differentiates you. Some jewellers used to set a little ruby on the inside of the ring. John Calleija has a C as part of the setting in the undercarriage. Some invest in beautiful branding and everything in the store is aligned. Some jewellers are discounters, although hardly unique but maybe that’s what they’re known for. Do you actually carry unusual merchandise? With respect to manufacturing, using recycled gold exclusively and targeting the green story? Maybe you do something really special after the sale?
Perhaps part of what your USP is, is that you are more than just a retailer, you are actually part of the whole experience of getting engaged. You need to find your USP. For some, it’s a woman’s only business, or they cater to a specific market. Maybe you only do rose gold or antique designs.
Why don’t you write down what you think your USP is.
What does success look like to you?
Have you written a business plan?
A number of high-profile jewellers talk about the passion of crafting jewellery, and they love what they do.
Let me tell you a little secret. If they were not financially successful in selling jewellery, they would lose that passion.
Money is a barometer of our success regardless of what we do.
When you have more of it, it just means you have the freedom to indulge yourself in experimenting or buying an expensive stone just because you love it. However, don’t be naive, you need to run a financially successful operation to get to that point.
You really need to start with a business plan, and it doesn’t have to be some 30 page document to begin with. You should however look at the fundamentals of a SWOT analysis, which is what are your strengths and what are your weaknesses; what are your opportunities and what are your threats. There is no doubt that when you’re honest with yourself and define what your weaknesses are, you realise you can hire people to fill those gaps. The moment you do that, everything changes.
A business plan makes you take your ideas, commit to paper and then bring them to life in some sort of organised manner. It also means you can go back and reflect on these thoughts. You can take this document and show it to a mentor who can add questions that you might still need to ask yourself, or complement you which provides positive reinforcement on what you’ve defined is your USP.
If you’re able to project what you want to achieve in the following 12 months, it has the effect of a game. If sports didn’t have a score, we wouldn’t watch it. So by setting a number which might be your sales figures, or what you wish to earn from the business in the next 12 months, you are allowing yourself to set a goal which is defined and therefore think of the power and inspiration you will create for yourself if you achieve it or surpass it. So many of us ignore this and like to say, “it’s a new business, I just have to see how I go”. This is the approach that many small jewellers take and end up closing their doors and looking for a job because they can barely pay themselves a wage.
Do you have a mentor?
Nobody has all the answers. I can tell you throughout my career, I’ve either engaged a mentor or hired a business consultant to help me identify what I’m missing. When you are focused on your business, it is impossible to see what you’re missing. You need fresh eyes, you need objectivity. Sometimes a friend who is in another business can discuss with you what they’re doing which will inspire you to think of how you could use some of these ideas in your own business.
Having a mentor is particularly special because they are someone who is not trying to dictate to you how you should run your business, nor are they interested in anything other than your success. This might be controversial but it’s often best to find a mentor who is not a family member. The reason being, is that many times close family members impose their own life experience on their advice, and therefore by doing so, think that suggesting we don’t take risks, or we don’t try something new is saving us from failure. In fact, all this does is dampen our creativity and the problem is that their life experience does not necessarily reflect ours, or even more importantly, the circumstances of business today.
I created a specialised jewellery insurance product. I am today what is known as an SME (small medium-sized enterprise). However, we think like a large insurance company and therefore, we look to implement the same technology that they have access to. The key to our success is that we are nimbler, faster to market, able to provide more personalised service and implement change without having to write ten business cases to justify it.
My mentors got me thinking like a corporation. They got me into running tight financials and putting money aside for a rainy day.
How will you grow your business? CRM
I’m not going to talk about the importance of a web presence, as I have seen some retailers focus on Instagram and absolutely smash it. However, the one thing that still shocks me with so many emerging jewellery businesses today is the lack of having a powerful CRM (Customer Relationship Management) tool.
If you are not thinking about how you’re going to manage your customer’s journey from the moment they hear about you, to the first engagement with you, to purchasing something with you , to speaking to them post purchase to ensure that they are happy with what they purchased, and to communicating with them 3-4 times a year at a minimum, then you should think very seriously about whether you are even going to be in business for yourself or not.
Businesses such as Tiffany’s and Van Cleef will analyse their customer’s purchase and ask themselves based on their previous knowledge and experience of this customer who falls into this sort of profile, what could their next purchase be? What could they suggest to them? This type of data analysis doesn’t necessarily require any massive outlay. It does require time and effort. However, if you realise you’ve just sold an engagement ring, why wouldn’t you discuss the type jewellery or fashion that the customer likes? Has she thought about the jewellery she might wear on the day? Has she thought about gift items that she may wish to buy her bridesmaids? Maybe the couple are from the LGBTQ community and want his and his lapel pins?
Understand profit is not a dirty word
Traditional retailers have been working on smaller and smaller margins over the years as they fall back on discounts as the only way to secure a sale.
Parallel to that, the bench jeweller is often pressured by their retail customers to keep the price keen. With the introduction of CAD and the increase in purchases of premade mounts from overseas, many jewellers couldn’t compete. The next generation grew up with CAD, understands where and when to use it and is not scared of the imports, because they have learned that in general, it is often an inferior product purchased purely at a price point. If nothing more than the fact that the merchandise is manufactured to the minimal specifications, and therefore has ongoing issues of stones falling out.
Unless you plan to make your jewellery business repairs only, you’re in the luxury business and I’ve previously written articles which talk about the need for your customers to aspire and stretch themselves to satisfy the need that they are giving something that is truly special. The parallel is that you can go to your local take-out every night of the week, but the fact that once a year, you may choose to go to Neil Perry’s restaurant and pay three times for steak on a special night out is a reflection of the experience that you will receive when you dine out at one of his restaurants.
When a customer comes to your business, they want to have an experience. To provide the experience means that you have to spend money on all the little things that create that experience. You need to factor these things in when you’re pricing your jewellery so that you are left with enough gross profit to pay for them. Only then can you appreciate that unless you make a healthy profit, why are you putting in so much effort and work to create that experience for your customers. When your business makes a healthy profit, it gives you the resources to buy better tools, better fixtures and better quality merchandise. It also means that you can pay better wages and therefore attract better talent. The most important thing it does, is it enables you to stop being fearful of losing the sale. If you’re not making a healthy margin, just say no. But if you’re desperate, you will always be on the back foot and you will never make a healthy profit because you’re always doubting yourself and you are in such a tight financial position that you will always be chasing your tail.
You have a vision but did you communicate it?
You can write a great business plan. You can have amazing creativity. You can draw, craft and read business books. You can have a mentor and a business coach. All of these are wonderful ingredients which enable you to formulate your vision for what you want to create and build from today and into the future.
My question to you is did you communicate this to your team? Your team at this point might be only one other person and that’s fine as long as you’re both on the same page. The problem is that many entrepreneurs are creative people and they see their ideas as these gems that they want to keep in a pouch and on occasion, pull them out to show people how clever they are, or creative. Clearly, you need to bring everyone on this journey with you. You need to share your ideas and all your creativity without the fear that the person who works for you or with you is going to steal them and run out the door and set up their own business. You need to appreciate the famous statement “success is 2% inspiration and 98% perspiration”. Never fear that they will run off with your knowledge. It’s all in the execution. If you’re an ideas person, you will always be an ideas person and you will constantly be looking for ways to evolve and change and adapt. The people in your team will look at you and be inspired by this creativity and will be able to share in your journey. In some cases, you will create the synergy. Meaning one plus one equals three. The collective energy of ideas and everyone working for a common goal is far greater than the singular. It’s just like an army. A clear game plan, and yes sometimes you have to leave out some of the small details because people will only grasp one or two concepts at a time, will both motivate your team and give them an enormous sum of confidence that they are working with someone who knows where the going.
Nobody is good at everything
It does not matter who you are in business, nobody is good at everything. In your initial business plan when you speak to your mentor, it’s very important to identify these things early so that you can hire those people who can fill those roles that you’re just not good at or really don’t like doing.
I can tell you I hate doing paperwork. I understand the numbers. You can give me balance sheets and profit and loss statements and I understand them, just God forbid don’t asked me to prepare them. When there’s a project that needs to be done, I’m great in that brainstorming session, but I’m terrible at following everyone up with what they have to do. So I have an assistant. My assistant Sue lives in Queensland and I am based in Sydney. Every morning on the way to work, she goes through my to do list. We have a list for each of our businesses and personal things that need to get done. One of the key things that Sue does for me is help me identify through discussion, what are two or three things that I should try and do on that day that in effect will make that a successful day. This method keeps me on track. Nothing slips through the cracks and I’m playing to my strengths not my weaknesses.
If you don’t have an assistant, you need to have an excellent to do list and in the morning and then again in the evening, you define what is the highest value items you can do on that day. Ideally, you may try get others to do some of the things that are clearly not high-value, but you’re doing them for the sake of it, because in your mind it’s easier for you to do it than to explain to someone else how to do it. That’s again a very inefficient use of your time if you are the business owner.
Remember, few jewellers are setters and vice versa. Find a great social media person which is in the demographic that you want to cater to. Get an interior decorator to design your showroom. A tech whiz to set up security for all your data and emails (getting hacked is a nightmare). Nobody is good at everything.
So in summary, define what makes you different from the person next door and make sure you have a mentor or business coach to bounce off. A business partner is not a mentor or coach as they too suffer from tunnel vision in the business. Like you, they are caught up in the day-to-day. The reason why everyone’s going off in multiple directions in your business and is not progressing the way it should, is because you haven’t defined a clear vision for the business and communicated that vision to everyone in the business.
Without an excellent CRM in your business, you are losing the most valuable capital and assets in your business, and that is the data on your clients. Some businesses are focused on doing volume, but unless you’re a purely online business and you are selling thousands of units, you better focus on your profitability and it better be healthy or else you will not be able to execute all of the creative ideas that you have in your head, nor the money.
At the end of the day, what will make you happy to go to work every day and grow your business? It’s a combination of the right people around you and the financial compensation that goes with it. And finally, no one can be good at everything so utilising experts in each field is about how we create great teams which allow us to build great businesses.