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. Set goals2. Start locally3. Understand “Your” market4. Find a unique product (clarity enhanced)5. Consider indirect sales to leverage others6. Promote with PR and ads7. Consider direct mail & e-mails8. Create an online presence (to go national)9. Don’t be like Samson (jawbone…)10. 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?