Forget the headlines: Try common-sense marketing

Expert Columnists - Ellen Fruchtman - Big Picture

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Forget the headlines: Try common-sense marketing

By Ellen Fruchtman

September 24, 2009

Ellen Fruchtman is founder and president of Fruchtman Marketing, a full-service agency and a member of the American Gem Society headquartered in Toledo, Ohio, representing U.S. independent jewelers, jewelry manufacturers and trade organizations.

In one week, I've read the following tidbits in the news: Consumer spending is up...Consumer spending is down...The global recession is receding...The Fed says the economy will get worse in 2009...We can expect a slow exit from the recession...Investors are increasingly wary...Many economists expect the national economy to return to growth later in 2009...Job worries temper any economic optimism...Spending will be moderate yet restrained, but it's starting to happen....

Other equally confusing news snippets focus on the bridal market and marketing issues. Here's a sampling: The economy is not affecting engagement ring purchases...Forty-three percent of jewelers report bridal is less than 29 percent of their total sales...Diamond jewelry is the most profitable and largest category...Relative affluence is the same...The 18-34 demographic has become the sweet spot of marketing...Those who are age 50-plus earn $2.4 trillion annually compared to $1 trillion for the 18-to-34 age group...The 50-plus age group generates 41 percent of all disposable income...Focus on lower-priced inventory...Seventy-eight percent of women and 77 percent of men say if they really want something, they don't mind paying full price...There's an opportunity to grab market share: Time to increase your marketing...Most jewelers expect to decrease their marketing....

Given the mixed messages, what's a jeweler to do?

1. Don't abandon your core business values and structure. In this business, knee-jerk reactions will get you nowhere.

2. Remember the principles of positioning. When there is a clear market leader, it is almost impossible to displace that leader--especially in the short term. Go after the Blue Nile strategy and you will fail. Go after the bridal market and, if the marketing space is cluttered in your immediate area, you will fail.

3. Engage in practical thinking. Bridal customers aside, many jewelers are either very much like their customers themselves--or at the very least they are married to someone who is very much like their customers. Like their customers, jewelers have some level of affluence, appreciate fine things and make a decent living.

So ask yourself this: How are you shopping and responding to the economic realities? What are your new spending habits? What are your thoughts and concerns? What actions from the retailers you frequent will convince you to buy? After you've answered these questions, formulate a message and a plan that will speak to those very same needs and wants.

4. Base your advertising spend on what it should be: 5 to 8 percent of gross sales. Project your sales numbers conservatively. Be methodical and thoughtful. Determine what percentage of that total amount should be based on existing customers and what percentage should be new customers. Then, base those advertising expenditures on strategies that take into consideration item numbers 1-3, listed previously.

5. Consider the realities of the current consumer mindset. If your best customers will most likely be more frugal this holiday season, you will need many more customers to reach your numbers. How are you planning to accomplish this goal?

6. Do not put your all of your eggs in one media basket. Conventional wisdom still prevails: a strategic integration and combination of tactics will be the most effective. Do not abandon traditional media. It is still a great influencer and a great buy in this economy. Take advantage of mediums that might have been otherwise out of budget and negotiate your way to exposure. No one is just online, just watching TV, just listening to the radio or just reading magazines or newspapers. And since most of your customers cross a number of demographics, no one approach will reach them all.

7. Walk the line with your value message. If even your best customers (not to mention prospects) will be looking for "value" this holiday season and--as we know--running long-term "sales" will eventually bastardize your brand (not to mention lower gross profit), what steps should you take to communicate the value message?

There is a very interesting study by London-based M and C Saatchi on the differences in consumer behavior as it relates to spending in the recession--ranging from "crash dieters," (26 percent of the population) who are identifying and cutting out all non-essential spending, to "vultures," (4 percent of the population) who plan on profiting during this time. You don't want the vultures for obvious reasons, and you're not going to change the minds of the crash dieters. But, there are a significant number of people in the middle who want to buy--and those people, according to the study, will be attracted to credit offers and added-value promotions.

Reading the latest headlines will only make you second-guess your marketing strategy. How can it not? With daily headlines changing so dramatically, who can you really believe? The answer to that question is, you. Be pragmatic. You know what needs to be done. Now, just do it.

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