Fourteen grand in ten minutes. Any jeweler would covet that kind of sale. But for Boaz Ramon, owner and president of Diamonds Direct, a loving husband's breakneck binge on a 15th anniversary diamond is just another transaction. This year the innovative diamond marketer is on track to ring up $10 million worth of a girl's best friend, severely cutting into his competitors' share of the market.
"I don't think anybody has perfected this business as much as us," Ramon asserts, quickly adding, "We still have a lot to perfect." You'd think that putting the engagement ring on 1200 fingers in a city the size of Charlotte would satisfy the bottom line appetite of this Israeli-born entrepreneur. But Ramon has plans next year to introduce jewelers in another Tarheel metropolis to the joys of competing against his brilliant concept.
A classic retail revolutionary, Ramon upended the southern jewelers' code of gentlemanly conduct in 1996 when he opened a fourth floor diamond showroom on downscale Independence Boulevard and began hawking prices he claimed couldn't be beat. Old line Charlotte jewelers cried foul, but customers picked up the message and quickly spread word about the Piedmont's best-kept secret gem outlet.
Scratch the surface of the Diamonds Direct success story and you see only rock-bottom prices and a king-size inventory. Examine Ramon's strategy under a loop (jewelry jargon for a lens that magnifies 10X), and you discover a multi-faceted marketing concept that sparkles like the Hope Diamond.
Unlike his competitors, this canny retailer grasps the psychological profile of men buying a rock for the girl of their dreams. A diamond ring constitutes a highly emotional purchase decision fraught with risk. For testosterone types, blowing a bundle on something they know nothing about calls up feelings of insecurity.
Ramon overcomes this male ego barrier by creating a no stress, no pressure environment. Breaking tradition, he employs saleswomen who work on salary, not commission.
To engender trust, the Diamond Direct sales pitch begins with education about the four C's (color, clarity, cut and carat). Next comes the sales tactic that competitors really hate - revealing the Rapaport Report, the closely guarded wholesale pricing sheet of the diamond industry.
"I was absolutely clueless," admits Michael Styduhar, a twenty-something Raleigh professional who dropped five figures on an engagement ring at Diamonds Direct. "I don't know anything about diamonds, but at least for a day I had some idea of things I was supposed to look for."
Once a man understands what he can get for his investment, the sale is closed through retail techniques hitherto reserved for mundane items like tires or washing machines - free certification from an independent diamond laboratory, free appraisal for insurance, lifetime upgrades and a 30-day money-back price protection guarantee.
Getting Answers Before They Pop the Question
On any given day, love-struck men stumble into the Diamonds Direct showroom looking like stags caught in the headlights. Within seconds, a motherly saleswoman takes the prospective groom in hand, offers him a soda and chocolates, then walks him down the aisle to purchase.
Beth Phillips, who joined Diamonds Direct in January after 11 years managing a Zales jewelry store, reports that young men arrive at the counter and announce, "I need one of those round ones." After giving him a short course in the 4C's, she shows him how to use the Rap sheet so he can see the wholesale price for the object of his desire.
Phillips then pulls out several diamonds of varying clarity and asks if he can see the difference. "I tell him if he can't, why spend the money? We don't work off commission, so I don't have to push a customer into a diamond he can't afford or doesn't need."
In many ways, that old saying about "Men don't shop, they buy" is true. About 30% go for it on the spot. Nonetheless, Phillips always suggests a customer investigate the open market first, because she knows he will return.And why do most come back? "I think it's personal attention. They know we tell them the truth. We don't make commissions, so we are not making the decision - they make the decision."
Value Investing for Men in Love
Ramon's bargain basement prices are a big selling factor for men, who don't part easily with their assets. In his opinion, traditional jewelers have clung to the errant notion that where men in love are concerned, money is no object. "I cater to intelligent men who want to be sure they are getting the most for their money - value, value, value, value!"
Ramon says men who buy from him have ample assets, but spend it smart. "They can afford Tiffany or Harry Winston, but want a Harry Winston product at Diamond Direct prices. The difference between successful business people and more successful business people," he insists with characteristic hubris, "is that we have money to spend, but we spend it wiser. Other jewelers don't understand that."
Ramon cites one regular customer, who recently complained that his wife was spending a lot of money at Diamonds Direct. "I am saving you a lot of money," Ramon retorted, prompting the man to laugh.
For some men, the Rap sheet is the clincher. "When a customer knows he is buying diamonds marked up two and three times, he is not going to buy," says Phillips. "Men want to pay as little as they can."
Carl Persson, president of One World Capital, has purchased repeatedly from Ramon. "Diamonds Direct is very efficient, and of course, pricing is key to his success. With Boaz, whatever you want you get."
Where diamonds and men are concerned, money definitely talks. As Styduhar observes, "The ring is like an extension of your love based on what you can provide in terms of income, or your hard work. You spend a percentage of that just to go toward a diamond. How jewelers get us to buy into that I don't know," he adds with some amusement.
With so many women of independent means today, it seems surprising that diamond customers remain so dominantly male. But in Ramon's experience, Charlotte is a very conservative place, and the decision makers in this market are men, not ladies. Women may come here and see something, then go home and tell their husband; but he makes the decision."
Barbara McKay, a leading Charlotte media personality who does testimonial ads for Diamonds Direct, says Ramon is right on target. "It's a southern thing. We've been bred to believe those kinds of gifts should come as a surprise from our male admirers."
That being said, women are gradually getting into the buying act at Diamonds Direct, including McKay. "Once you do, it's very addictive!" she confesses. "You realize it's a new world, and are empowered to go out and make these decisions for yourself and not be embarrassed."
Cutting the Jewelry Middleman
Ramon's targeted the Queen City by design. He'd been wholesaling diamonds to southern jewelers, and thought Charlotte the bastion of predatory pricing. Around 1995, he saw a retail showroom concept in LA and Chicago, and the idea hit him.
"I told myself this is the time to do Charlotte. It needs a place like that. Charlotte doesn't have to be the most expensive city for diamonds and diamond jewelry. I wanted to bring the truth out. Jewelers had hidden a lot of information from consumers."
To hear Ramon talk, Charlotte retailers have only themselves to blame. He once consigned three $10,000 diamonds to a jeweler on Friday to show a customer, only to have the jeweler return them Monday. Ramon claims the jeweler explained the customer would only pay $17,000, not the $20,000 asking price.
To Ramon, demanding a 100% markup was madness. "You are a business owner, and have a $10,000 diamond on consignment and somebody is willing to pay $17,000, but you still think that is not enough markup? $7000 profit on something you didn't put a nickel into?"
Ramon decided to move in for the kill, and taking the rifle shot approach, aimed at affluent men who listened to WBT and WFNZ. From the first air second, he went mano a mano with his former customers, boasting that he sold diamonds at the same price they were paying.
"Boaz had a great idea for a business, and people were waiting for someone to tell them about it," observes Rick Jackson, vice president and general manager of WBT. "When you tell the right people with the right medium, which he chose - radio with an adult 25 to 54-year old male audience who qualitatively line up great with his product - it works. Boaz's success is an affirming message for me. For him, it's a marriage made in heaven."
Marketing history is littered with competitive advertising campaigns. Some work. Some don't. Only time will tell if Diamonds Direct is forever. Meantime, his competitors continue to file complaints with regulatory bodies to no avail.
Phillips says competitors are attempting to retaliate by hurling accusations. "Ramon is selling at prices they're buying diamonds at, so they cannot possibly compete with his price of stones. That makes them angry."
McKay takes exception to criticism of Ramon. "I would not be his spokesperson if I were not sure of his integrity, because that's my name and face out there! I did more investigating and more time interacting with him than your average customer. I've done hundreds of commercials, and I've never had more respect for anybody than I have in him."
From a strategic perspective, Ramon's competitors don't seem to realize that complaints will not solve their problem. Retailing times have changed, and jewelers may be one of the last segments not invaded by category killers.
If not Ramon, someone else, right? "Absolutely," Ramon agrees. "The modern consumer is trying to cut the middleman. This is what the Internet is all about. We all want to come direct to the source and buy the best we can."
Ramon is the first to admit his marketing heist here would not have been possible without family connections. His uncles and cousins are one of the elite 120 customers of De Beers. He also buys in volume, carrying a hefty $5 million in inventory.
But even he has been staggered by his rapid growth. "I don't know any other merchant in five and half years who has done over ten million dollars a year sales in this country." But Ramon believes his success is more than a function of volume. "We changed the way you do business."
Devoted to his wife and three children, Ramon just finished building his first home and is grateful for achieving the American Dream. "I love this business. I see happy people, and get excited because my concept is working. But I'll be honest, I am very competitive," he can't resist adding with an impish smile. "When I take business from competitors, it makes me feel like I'm falling in love again."