No Time For Complacency: Be Customer-Driven
During the past few months, some JCK editors have written about personal experiences in retail jewelry stores. Regrettably, these experiences were negative. While personal research may not be quantifiable or subject to projections, jewelry store owners and managers should use these examples as teaching lessons for their staffs. Why? Because good times don’t last forever, and because retaining customer good will is essential to repeat business.
During the past three years, the retail jewelry industry has been on a joy ride. Consumers have had plenty of disposable income. Demographics and lifestyles have played to the advantage of jewelry retailers and manufacturers. The wealth effect of stock market gains has made consumers giddy with “feel-good” financial optimism.
Now is the worst time to be complacent. In case you haven’t noticed, there’s a man in Washington who is seriously concerned about inflation. Alan Greenspan has been tightening the rope around the economy’s neck in an effort to keep inflation at bay by raising interest rates. While financial gurus on Wall Street are predicting a possible end to these rate increases, retailers and the manufacturers who supply them may be in for a rude awakening if this year’s holiday selling season doesn’t measure up to the last three. Higher interest rates generally mean trouble for retailers and manufacturers. Most banks don’t like financing jewelry inventories, anyway. They’ll look very critically at this issue if the economy begins to turn south.
One of the smartest, easiest, and least costly ways to address a business downturn is to provide sales training for everyone behind the counter. Sales training should be a never-ending task, but it’s possible to overlook it during good times when business is strong. Review of the basics may seem boring, but history has proved that refocusing on a firm’s core beliefs pays off in greater sales when times are good and in market share gains when times are bad. Discussing issues such as greeting customers, answering their questions, responding to objections, and listening empathetically help make your sales team “well trained.”
Typically, when business gets tough, the financial types lay down the law, demanding cutbacks in nonessential expenditures such as advertising, product development, and sales commissions. (The situation reminds me of certain announcements made by the federal government during a snowstorm, the ones that advise “nonessential” personnel not to come to work.) If anything, refocusing on sales and revenue development becomes more important, not less.
Nothing will do more to keep a customer out of a retail store than an unpleasant experience. There are plenty of alternatives where teens, “Generation Xers,” Baby Boomers, and seniors can spend their discretionary dollars.
At a recent JCK business planning conference, the staff participated in team building and idea generation. It was sales training for the entire staff. During the conference, several principles were developed that apply to the coming jewelry selling season, and I’d like you to ponder them. They are: Focus on the customer. Have high expectations and do not accept mediocre performance. Launch new products. And be prepared to manage in good times and bad. This is good advice for the customer-driven, who will grow regardless of the economy.