By Brian Land
My daughter broke her gold chain and asked me to have it repaired. I chose to go to a jeweller close to my home. I had been aware of the family business for several years, but this was my first visit.
When I entered the shop, I noticed there was no traffic—nor was there any staff! As I made my way to the cash desk, an employee appeared from the back room and asked if I needed help. I explained I wanted my chain soldered, and she proceeded to complete a repair bag. She told me it would take 10 business days and they would call when it was ready. I thanked her, turned, and walked towards the entrance. Out of curiosity, I delayed leaving and stopped to look in a display case, waiting to see if someone else would come in and begin a sales conversation.
As I stood at the counter, a women entered the store and asked the same clerk about having a ring sized. The customer noticed a display of jewellery cleaner and asked if it was good for sterling silver. The clerk said, “no.”
I couldn’t help myself. I stepped in and indicated to the customer the proper cleaner for sterling silver, and explained its use and how effective it was. I also suggested the jewellery cleaner as a must-have item for her gold and gemstone pieces, then turned to the clerk to let her close the sale for the two items. Unfortunately, the store employee didn’t recognize the opportunity to ask the prospect to buy and, ultimately, the woman left the store empty handed.
In my August 2023 Jewellery Business article, I stated that, “Increasing sales is, of course, the fastest route to improving profits,” and alluded to the concepts of continuous improvement, goal setting, and measurement as a tactical approach to organic growth.1 In this article, I will discuss loyalty and the potential lifetime value of a returning consumer as another route to increasing sales and, by extension, profits.
The Loyalty Ladder
I visit a local coffee shop several times a week and the drug store probably twice a month. What wouldn’t a jewellery store operator do to enjoy a similar buying frequency?
I suspect retail jewellery stores likely have a returning purchaser rate in the bottom quartile of all retail businesses. When I managed a jewellery store early in my career, I recall seeing our so-called regular patrons, at most, one to three times a year. I also remember these return visits generally boasted higher average transaction values and higher conversion rates than the mean values.
Another result of these interactions was that, over time, we tended to learn a great deal about these individuals, including details about their needs and desires, their lifestyle, and their family. In turn, these customers would, typically, learn a lot about us, our products, and our services.
The development of this relationship is central to what is known as the Loyalty Ladder. This concept is like a romance: It starts as an infatuation (the first interaction or sale), which can lead to a type of courtship (repeat sales), then exclusivity (where your shop becomes top of mind for all their jewellery requirements), and, finally, a total commitment (leading to the active promotion and sharing of your business with friends and family).
I employ a Loyalty Ladder that has four rungs (or stages): the shopper, the customer, the client, and the advocate. As a consumer moves from one stage to the next, they willingly share more information about themselves—especially as it pertains to their wants and aspirations. The more information you gather and provide about your business, the easier it is to generate incremental purchase opportunities, thereby increasing the likelihood of return visits and the potential of sales well into the future (lifetime value).
1) The shopper
The first rung on the Loyalty Ladder is occupied by the shopper. This individual is a prospect with no previous purchase experience in your store and with little or no knowledge about your products or services. Similarly, you have no information about the prospective buyer.
The goal of this stage is to begin the process of gathering details about the shopper and their needs to address the issue that brought them into your store. In other words, what need can you fulfill to make a sale?
Essential to the success of this phase is the process of developing a rapport with the potential purchaser. Some have compared rapport building to the way one might treat a guest in your home. When you greet a guest, you undoubtedly do so by name and with a broad smile.
If, for whatever reason, you do not know someone’s name, you introduce yourself and invite them to do the same. In jewellery retail, the reason this is done is akin to why serving staff do so in a fine eating establishment:
It tends to elevate the diner’s experience through a human connection that demonstrates respect to the individual and appreciation by the business for the opportunity to serve. Indeed, treating a shopper as a guest, combined with an invitation to return for future needs or desires, significantly increases the likelihood of another visit.
There are four elements to remember throughout the shopper phase:
- Train your team to always build rapport (start with a self-introduction and use the shopper’s name frequently)
- Gain information about the individual and the purpose of their visit
- Make the sale
- Provide encouragement or a reason for their next visit
2) The customer
The second rung on the Loyalty Ladder is the customer phase. A “customer” is defined as one who has made a purchase and, hopefully, has started to learn something about your product and services. During this stage, you are attempting to move the individual up the ladder with the hope they will think of you as more than simply “a jeweller” and, instead, recognize you and your shop as “my jeweller.”
This process may take multiple transactions over several years, but each interaction allows you to move along the information curve as you gather and document particulars about the customer. Accordingly, immediately after the first sale and on an ongoing basis, it would be prudent to create and maintain a customer profile. This would include contact information, purchase history, family and lifestyle details, future wants and needs, and so forth.
3) The client
The third rung on the Loyalty Ladder is the client phase. This individual has already made multiple purchases from your store and likely considers you their personal jeweller. By this stage, you know the names of family members, anniversary and birth dates, vocations or avocations, and are aware of any needs, wants, or desires of the client family. You have developed such a strong rapport and have such a knowledge of the individual that you are able to contact the client with gift suggestions prior to holidays and other gift-giving occasions. Additionally, over time, you have educated the client as to the full range of products available, as well as the services you offer, including custom design, appraisals, and repairs.
4) The advocate
The fourth rung on the Loyalty Ladder is the advocate phase. The advocate is so connected to your business, he or she might as well be on your payroll. Indeed, this individual is in love with your business and is prepared to recommend your team and products to others without any reservations.
Word-of-mouth recommendations are among the most powerful types of marketing. In fact, a Nielsen Survey once reported that 92 per cent of people trust word-of-mouth recommendations over all other types of marketing endorsements.2 This is particularly valuable to a retail jeweller given the importance the notion of trust plays in a jewellery transaction.
Another valuable aspect of an advocate recommending your shop is the concept of “birds-of-a-feather.” Marketers know that people with similar interests, tastes, and income levels often associate with one another. Consequently, a new customer sourced through an advocate will likely have a higher initial conversion rate, as well as a higher transaction amount. These individuals tend to move up the Loyalty Ladder and along the information curve at an accelerated rate. (As an aside: It is never too early to ask a client or an advocate if there was anyone in their circle that might benefit from your high level of care and your wide array of quality products and services.)
Establishing lifetime value
The goal of the Loyalty Ladder is to turn all shoppers into advocates, as these individuals represent a significant lifetime value for your business. An advocate also represents a direct source of future customers.
The process starts by establishing rapport and making the first sale, then continues by offering personalized service throughout the relationship and always treating the client warmly—as if they were a guest in your home. Gathering information, recording relevant personal and family details, and creating a customer profile will help set the stage for future purchases.
If you re-read the anecdote about the gold chain repair at the beginning of this article and view it through the lens of the Loyalty Ladder, you may recognize a few unrealized opportunities. Handled correctly, the employee might have discovered that, within weeks, I would need two gifts: one for my wife’s birthday and another for one of my daughters.
As promised, though, 10 days later I received a call to pick up my repair. This time there was an employee standing behind the cash desk, but the store was otherwise empty. She processed the transaction, and I made my way to the front of the store, stopping momentarily at a showcase before leaving.
I was reminded of what Wayne Gretzky famously said: “You miss 100 per cent of the shots you don’t take.”
References
1 See “Make your own luck” by Brian Land, published in the August 2023 edition of Jewellery Business. Find it online here: jewellerybusiness.com/features/jewellery-retail-make-your-own-luck
2 See https://www.nielsen.com/insights/2012/global-trust-in-advertising-and-brand-messages-2
Brian Carney Land is a retail jewellery consultant. Formerly the executive director of the Canadian Jewellers Association (CJA), Land has more than 40 years’ experience in the industry and has held executive roles with Peoples Jewellers, Birks Jewellers, and Waterford Wedgwood Royal Doulton. Past clients include retail chains, independents, and supply side businesses. Land is a past-president of Jewellers Vigilance Canada (JVC) and the Canadian Jewellers 24 Karat Club, as well as a long-time member of the Georgian College Jewellery and Metal Arts Program. He can be reached at bland19@bell.net.
