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The Geller Opportunity


#1

Hi Sam

        I had for years gone on the assumption that my work would
> speak for itself and people would come in and buy." That's like
the movie "Build it and it will come". True to a point. But that's
like "go out and hunt for berries and you won't starve." That's
true but by planting a field of corn now and you will eat like
kings later. Keep putting off planting and "eating like kings
later" will be later and later.I have concluded that some promotion
is absolutely necessary." 

Depending upon your sales and situation you should put about 13% of
your total sales into a combination of rent and advertising. If rent
is 5% of sales, put 8% into advertising.

You need to advertise for many reasons:

  1. 20% of the population moves each year. So 20% of your customers
    leave you.

  2. The 20% who MOVE INTO your city don’t know you so they don’t
    replace the ones who left. You have to advertise to them to let them
    know who you are.

  3. You can’t rely upon word of mouth. Although there are ways of
    promotion word of mouth, people only talk about how wonderful you
    are for a week or if someone says “great looking ring”. It’s reported
    that 2% of the population needs your product on any given day. A
    DIFFERENT 2% needs it tomorrow.

So if Mrs. Jones needs a ring repaired today and she isn’t having
lunch with Mrs. Smith who had a ring fixed at your place, she won’t
be given your name as a lead.

When I first started advertising in the newspaper I was told to
advertise each Saturday, which I did. I was told people use the
newspaper as a reference material, like so:

I need my ring fixed. Every Saturday in the main news is somebody
advertising jewelry repair. I'll look in Saturday's paper and see
who that is and call them." 

Sure enough, that was true for us. I went from an office building to
a strip center in 1983 at $200,000 per year in revenue. I started
advertising each week and in 3 years sales were up to $830,000.00.
People saw that ad every week and it brought NEW customers in (I had
been in business 9 years before moving.)

Advertising also will bring up slow months. April was always slow
because of tax time. Being we were 75% custom and it took a month or
more to deliver work, it affected May’s income too. (No work
delivered meant no money coming in.)

So we started advertising in March to our customer list and in the
newspaper a 20% sale on anything repair, custom design and showcase
products. It didn’t take a few years and April became a higher sales
month than March and MAY, WOW! May’s sales soon were 50% higher than
the previous May. This sale made May the second highest sales month
only to December.

I would suggest 3-4 mailings a year to your customer list. Also
recommend a consistent advertising medium that will work for you:
weekly newspaper, radio, billboard or cable.

I don’t suggest the coupons so much any more. They just bring in
discount oriented people who only get that service. If Home Depot
runs a full page ad in your paper for a cost of $10,000, do you think
they will be happy if it brings in sales of $10,000 to $15,000? NOPE!
And neither should you.

So don’t do a coupon mailing which cost about $700.00 and be happy
with a $500 to $1000 return. If you sell $1000 worth of products and
you make 50%, your cost of the products is $500. Add to that the $700
for mailing and your TOTAL COST to sell $1000 of products is
$1200.00. And don’t give me that advertising carp “you’ll make it up
on volume.”

Advertising should build your business, tell the customer what you
can do for them and get them to do something.

Our newspaper ad showed a broken ring and mentioned 5 things we do
to fix rings. Also in the same ad was a picture of a free form ring
and talked about we will make jewelry with your old gold and we
mentioned the fee we charged. The last section showed the arthritic
shank we sold. The size was about 4x6". We now use cable as it’s more
bang for the buck than our newspaper.

I speak to a lot of jewelers. The ones who had a GOOD year in 2001
were those who consistently advertised all year and spent time having
store meetings training the staff on a regular basis. What more clues
does one need?

 I live, eat, breathe & sleep this vocation. Think about some how
getting that message out somehow with out being negative.

Tooting your own horn is not negative. If you live, eat, breathe and
sleep this stuff TELL OTHER PEOPLE that you do. But more importantly,
you should be well paid for it. Happy with your income? Well car
mechanics, plumbers, computer people and other technical people live
their vocations and they are well paid. You should be too and
consistent advertising will get you there.

David Geller
http://www.jewelerprofit.com
404-255-9565
The Repair & Design Pricing Guy


#2

Dear Mr. Geller,

Your assumptions about the need for advertising are probably just
right for those who are stuck in an urban hell. After all, you are
just a number in a morasse of competitors. Nonetheless, you had
better have a huge budget 'cuz advertising “aint” cheap…(".wow,
you mean to tell me that I am going to have to pay the same as that
multi-billion dollar corporation"!) If, on the other hand, you are
fortunate enough to be located in a small town, forget the
advertising…concentrate on the personal relations angle.

You don’t have to become a “joiner” , but you can make yourself
available to the various service and social organizations as a
speaker for their meetings. You can also donate goods which are
auctioned at the fund raisers and, you can make small contributions
to the various activities that sustain the organizations.Another way
to make yourself known is to perform services on behalf of the local
organizations. Charitable organizations always need someone to
evaluate the items that people have donated or which have become
theirs as a result of bequethals. Ultimately, one of the principal
considerations of the “Geller Approach” is that we should all strive
to become millionaires…what a pathetic reason for being !. Yes,
we all need to become self supporting and we all need to maximise
our independence…but, making money is ONLY a means to an end, and
that end is not that of just making money. The psyche of “bigger is
better” is hopelessly simplistic!!!
Ron at Mills Gem, Los Osos, Ca. ( by the way, I NEVER advertise ! )


#3

Hi Ron

Thanks for your post

Many folks don’t need to advertise and I certainly wasn’t directing
this to you as I know you don’t need to advertise.

I travel across the country to store and small towns are not immune
to competition. I visited one small North Carolina town with 100,000
population and 17 jewelers.

Let’s say YOU are the main guy in your town. You enjoy a good
reputation and based upon that you don’t need to advertise. If I come
into town and you and one other guy are the jewelers, I will
certainly need to advertise otherwise I won’t break into the
community.

Advertising doesn’t have to be expensive especially in small towns.
But it should be budgeted. 5-8% of sales going to advertising and
MARKETING will help a business grow. Your ideas for socializing are
perfect and help round out a marketing scheme. We gave every
charitable organization a 12x10 amethyst and a $50 gift certificate
towards having it set as their silent auction.

You wrote: “yes, we all need to become self supporting and we all
need to maximize our independence…but, making money is ONLY a
means to an end, and that end is not that of just making money.”

I’m glad you’re making money and are happy with your income. But I’m
sorry, most small jewelers struggle. I’m not looking to make bench
jewelers millionaires. Firstly you’ll never become rich at the
bench. But shouldn’t it compete with the salary of a plumber, car
mechanic, top notch salesman. Did you know that the average salary of
the jewelry sales people who carry bags and come into your store to
sell you goods makes anywhere between $100,000 to $300,000 per year?
Is their job any tougher than yours or requires any more skill than
you’ve developed?

I always have people who think I’m “over the edge”. But I don’t get
that from people who have received more money because of what I’ve
taught them.

And yes, you should have a balanced life and spend time with your
family. If you’re struggling to keep up the work, working 10 hours
or more a day and haven’t taken a vacation, wouldn’t it be nice NOT
to have to work longer hours BUT make the same or more money doing
it?

Making more money for every hour you work is in fact the key.

David Geller


#4

Dear David, Thanks for your reply. Overall, I think we may be
talking about a much wider range of circumstances than would be
appropriate for your generalizations. Again, I would point out that
the operational differences between corporate mall type jewelers and
small town mom and pops is astronomical. The overhead of the mall
jewelers leaves them no choice but to charge astronomical fees for
services. On the other hand, the mom and pops don’t have payrolls,
pay as little as ten percent as much for rents and oftentimes don’t
have to advertise at all ! Furthermore the mom and pops have that
priceless edge of being integral members of the community who can
and do provide highly personalized services, You cannot begin to
realize the image impact of being able to walk away from a fee for
services when you know that the customer has just suffered a great
personal loss such as a death in the family or financial
catastrophe. Recently I learned of a pharmacist working for a large
local grocery chain who was giving away an occaisional prescription
to families who were down on their luck. He was arrested and taken
away in handcuffs.

Your analogy about bench services being comparable to charges made
by plumbers and mechanics overlooks the fact that they have very
high overheads and never take home the hourly charge. More
importantly, these people rely solely on the services for which they
charge whereas ther mom and pop jewelry store derives the bulk of
its income from a variety of sales. Bench services serve to back up
the sales. As for the astronomical incomes of traveling sales
people…they can have it !

It would be hard to imagine a more odious way to make a living.
Believe me… I am not pursuing a contentious path in exploring
some of your generalizations. I merely want you to realize that
there are a much wider range of considerations involved rather than
assuming that high charges should apply to any and all. Ron at
Mills Gem, Los Osos, CA.