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Jewelry Sale Advisors offers a legacy of 65 years in the jewelry business, conducting going out of business sales, jewelry liquidation and promotional sales, turnaround and crisis management, retirement planning, marketing consultation and inventory management for jewelry stores, and appraisals.
Take the voodoo out of advertising
By Jewelry Sale Advisors CEO Bob Epstein for Southern Jewelry News [ March 2007 ]
“I know half my advertising budget is wasted. I just don’t know which half.”
— John Wannamaker, Department Store Magnate
Retailers of every size and stripe share Wannamaker’s frustration. Because some retailers don’t understand advertising, they try a variety of advertising approaches throughout their business lives. One is simply to refuse to play the game. Those people quickly become former retailers.
Another approach is to look upon advertising as a necessary evil, and simply throw money in the direction of a few advertising media, hoping to attract some customers. These people usually have to take solace in the size of their advertising budgets, since there is little comfort in the results.
A third approach is jumping in with both feet, controlling the process from start to finish. These people should hang pictures of themselves in their stores to remind their employees and customers what they look like. Absent from the store, they’re forever immersed in the details of the next ad.
These are broad generalizations, but chances are you fit one of them. In fact, you’ve probably fit all three at one point in your career. And, most likely, you’re as confused and frustrated now as you were when you first met the advertising beast.
Advertising need not be confusing and frustrating. If you use the same dispassionate, objective approach to advertising that you do with financial management, you can achieve very satisfying and rewarding results from your advertising efforts.
What Advertising Is—And How to Make It Effective
Advertising is a method of communicating. Everything your store does to “talk” to potential customers is a form of advertising. In fact, your store is one of your most important forms of advertising—you need to find the location that will most accurately communicate your business to your customer. When you advertise, you’re conveying an impression—a persona that should match your store’s personality and style.
Advertising is effective only when you direct it to the right audience. Usually, you’re trying to communicate with your regular customers. But occasionally, you may want to target potential new shoppers.
Your medium must speak directly to your audience. If you’re a small business, your choices may be simplified—you may not be able to afford expensive forms of advertising. Be selective. Ask your customers which media they respond to most frequently: newspaper, circular, TV, radio, billboard, etc.
Get Help with Your Advertising
You can neither ignore your advertising efforts altogether, nor take direct responsibility for every detail of your program. Evaluate your own abilities honestly and decide which parts of the program to perform yourself and which parts to delegate to others.
We know retailers who are very talented copywriters, layout artists, or photographers. Others have excellent radio voices, or present an attractive television image. These people can perform certain parts of the advertising process themselves. It’s something they enjoy, and it gives them a welcome break from their daily routines without consuming all their time. If you are one of these people, use your talents to your best advantage.
However, we’ve never meet a retailer who can write copy, sketch layouts, take pictures, select media, read radio commercials, and perform television commercials while managing the store. If you want an effective advertising campaign for your business, you will have to delegate most of the execution to other competent people.
As a business owner, your primary advertising responsibility is much the same as your managing responsibility—planning for the future. In advertising, this takes the form of planning your advertising media and events for the year and establishing corresponding budgets to support them.
Point One: Objectives for the Year
As mentioned earlier, it is critical to identify objectives your advertising can affect directly. This gives you a yardstick by which to measure the effectiveness of your advertising efforts.
With that in mind, state your major objectives in terms of store traffic, or consumer awareness of your business. Your number one objective might be to increase traffic for the year by 25 percent over the previous year. Your second objective might be to double the number of people in your market who know your business exists and what type of merchandise it offers.
These objectives will obviously be linked to your sales goals. Stating your objectives in terms of what your advertising can directly affect will help to isolate advertising from the other components of your sales effort. If you’re achieving your traffic and consumer awareness goals, but falling short of sales goals, you’ll know the shortcomings are not in your advertising program.
Point Two: Advertising Budget as a Percentage Of Sales
There are many ways to establish an advertising budget. One popular way is to wake up in the morning and see how much money you feel like spending on advertising that day. Don’t laugh—you’d be surprised at how many store owners operate that way!
If you’re going to carry on an effective advertising campaign, you have to approach advertising as an investment. That means you have to make a commitment to putting a pre-determined amount into advertising. The best way to do that is to tie your advertising investment to sales.
You can base the advertising budget on last year’s sales, or on the average of sales over the last several years. However, we recommend you base it on a percentage of your projected sales for the year you are planning. This will ensure you have sufficient advertising support to reach the sales goals.
How much should that percentage of projected sales be? That depends—in low-noise, low-competition advertising environments, you may get by with as little as two percent. If you face stiff competition, you may have to go as high as five percent.
Subtract 10 percent of your budget off the top as contingency. Set this aside for special opportunities that arise during the year which you didn’t know about or forgot when you were planning your budget. Divide the rest into the four quarters of the year, following your sales projections for those quarters.
Tweak the Plan
Once you begin to plan your advertising, you’ll be able to take control of it without being overwhelmed. A sound budget plan will also free you from all the persistent advertising salespeople. Listen to their offers, but instead of sweating, coolly tell them you already have your advertising dollars budgeted.
With a balance of science and art, you can take the voodoo out of advertising.
Bob Epstein is CEO of Silverman Jewelers Consultants. Since 1945, Silverman has been considered one of the premier sales consulting firms to the jewelry industry, specializing in improving cash flow and maximizing the recovery on distressed inventory through professionally conducted sale events. Bob can be reached at 843-881-3383 or by e-mail at [email protected].
Offering a leacy in sales strategies to jewelrs since 1945. TM