Sales Strategy
Jimmy DeGroot: But Jimmy, My Cost of Cashews has Tripled! December 29, 2024 (0 comments)
Green Bay, WI--A jeweler recently asked Kyle Bullock and I how his store can deal with inflation. We are currently discussing this subject at length in our SLOW GROWTH BUSINESS PODCAST. I told Kyle about a local bakeshop that makes incredible delights for people with food allergies.
They make amazing, gluten free baked goods with delicious dairy and gluten substitutes that’ll make you swear off dairy and gluten forever. But all this deliciousness comes at a cost. The typical doughnut is four dollars. This may not seem to be a big deal for you big city folks, but in Appleton Wisconsin, we grew up with 25 cent doughnuts. So my wife and I go in regularly and buy the vegan cheesecakes that are to die for. When we first went in, they were $3.75. Today they’ve risen to close to $7 and … we’ve stopped buying.
I can afford the $7, but now it’s the principle that irks me. What would likely have kept me as a happy, paying customer is a little explanation at the counter from the staff who knows me by name. “Hey Jimmy, you’ve probably noticed that the price of these has gone up quite a bit. We just want you to know that it’s because of our cost of cashews. You see, we make these with cashew butter instead of dairy, giving them a richer flavor that is a great substitute. But, unfortunately our costs have risen so much on cashews that we just had to raise our prices.” Now that may seem a bit involved, but I’m a good customer, they know me by name, they see me every week and they actually made this particular flavor with Sharon and I in mind.
If you have significant price increases, explain this to your customers or through social media so that people at least understand. Customers appreciate transparency. If there is none, you leave yourself vulnerable to their own made-up assumptions. This is never good.
Transparency is the key to maintaining a great relationship with your customers. Think of ways you can talk with your customers when the issue of price comes up, or better yet, BEFORE the issue of price comes up. It’s better to be proactive than reactive. Next time, we’ll dive more into how you can better deal with inflation in your business. I still haven’t been back to the bake shop. I wonder if they’ve thrown out a bunch of those cheesecakes. Hmm, maybe I’ll get a phone call.
James (Jimmy) DeGroot is a professional jewelry sales and operations trainer from the jeweler’s side of the counter. Having been in management and the jewelry business for over 20 years, Jimmy offers weekly training to jewelers nationwide via the Train Retail website. Jimmy is an AGS titleholder and specializes in training relevant and timely methods for jewelry teams. He can do a full training on making Bridal Presentations the best they can be, among many other regular training options. Contact Jimmy at jimmy@trainretail.com or call 920-492-1191.