How To Sell More Diamonds

1. How To Sell More Diamonds National Pawnbrokers Association Presents Curtis W. Sutherland

2. 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

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 • Didn’t know any better – sold it for $500 next day • Took $500…

4. 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

5. 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.

6. How To Build The Business • Pragmatic discussion • Will discuss a “framework” that helps us to categorize our approach

7. 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

8. 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

9. 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)

10. 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…

11. 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)

12. 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)

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

14. 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)

15. 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)

16. 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”

17. 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

18. 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…

19. 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”

20. 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..

21. 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”

22. 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?”

23. 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…”

24. 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?”

25. 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…

26. 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?

27. Curtis’ Top 10 Tips • Set goals • Start locally • Understand “Your” market • Find a unique product (clarity enhanced) • Consider indirect sales to leverage others • Promote with PR and ads • Consider direct mail & e-mails • Create an online presence (to go national) • Don’t be like Samson (jawbone…) • Ask for the sale!

28. 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?