Reinvigorating community connections in a challenging market

What’s the secret to winning over customers in a difficult and cluttered retail environment? For Brisbane jeweller Stephen Dibb, the answer lies in promotion but not of the usual variety. Dibb, the owner of three stores, employs all of the standard marketing methods, like maintaining a website and running a Facebook page; however, he believes it’s the connections he has developed with the local community that set his business apart.

Stephen Dibb Jewellery gives back to local sporting groups, schools and organisations like the RSPCA and the Australian Medical Association by donating jewellery for raffles and auctions. To Dibb, the success of this strategy depends upon choosing causes and organisations that resonate with the business and its customer base. From there, it’s about striking a delicate balance between doing a good deed and employing sound business acumen.

“We want to make sure we’re seen as a good corporate citizen as well as sincerely wanting to be one as well,” Dibb says. “If people think you’re out for personal gain then they will see through that very quickly. If they can see that you’re sponsoring a wide variety of causes and you’re sincere and authentic, they’re more likely to respond to your integrity.”

Of course, Stephen Dibb Jewellery isn’t alone. There is a plethora of Australian jewellery businesses establishing community connections in the interests of both philanthropy and branding.

Helping those in need

Some of the most popular methods jewellers use to give back to schools, community organisations, not-for-profits and other local groups are donations of jewellery, gift vouchers for events and cash donations as a percentage of sales.

Brisbane-based Xennox Diamonds is involved with the Zig Zag Foundation, which helps sick, under-privileged and at-risk children, Vinnies CEO Sleepout, which raises awareness of homelessness, and the Legacy charity, which provides support to families who have lost a spouse or parent through the armed forces.

“I feel very passionate about trying to help those that are less fortunate in a variety of ways but the causes that resonate the strongest with me have to do with helping the disadvantaged or children in need,” Xennox Diamonds managing director Karl Schwantes says.

Likewise, two-store Melbourne retailer Holloway Diamonds donates to MS Australia and sponsors the Diamond Development Initiative, which works with artisanal mining communities. After experiencing several robberies in under a year, owner Garry Holloway took the unusual step of donating $5,000 to Afri-Aus Care, which helps troubled migrant youth of the same ethnicity as those believed to be responsible for the hold-ups. “We wanted to see that something positive could be done,” Holloway explains.

Elise Forth from Leon Baker Jewellers in Geraldton, Western Australia says supporting the local community is standard practice for many businesses in regional areas.

“You need to support each other to keep the stores going,” Forth says, adding, “If we don’t support the local community, there won’t be a local community.”

Jo Saxelby-Balisky, co-owner of To Hold & To Have in Queensland’s Sunshine Coast, agrees, admitting that her store is almost too generous when it comes to community involvement.

“Locally, we are involved in almost too many fundraising projects to mention, from surf clubs to youth organisations, international women’s health groups, local triathlons and ironman events,” she says. “If you come into our store and you ask nicely, we rarely say no. If there is a way we can help, we will, even if that means spreading the word or putting up a flyer.”

The business case

Of course, there are more benefits to getting involved with the local community than appeasing a social conscience. Beyond the warm and fuzzy feeling of doing good, there’s evidence to suggest a positive link between altruistic business practices – known as ‘corporate social responsibility’ in large firms – and financial performance, irrespective of business size.

A recent study published in the Journal of Small Business Management found small to medium-sized businesses that invest in corporate social responsibility not only enhance their reputations but can also unlock financial rewards. Recent research by British media agency MediaCom found 63 per cent of consumers believe brands have a responsibility to give back to society and 50 per cent of consumers are willing to pay more for a brand that supports a cause that’s important to them.

To Hold & To Have recently sponsored a student jewellery design competition.

Melissa Grenville is a not-for-profit business consultant and founder of Charitable Connections, which helps businesses develop philanthropy programs. She says branding is the main benefit of businesses establishing community connections.

“It depends on the size of the not-for-profit and the audience you want to get in front of,” she states. “Usually it’s about getting your brand out there but don’t forget that building your brand brings in financial returns. It’s about looking at who your market is and finding an appropriate organisation with which to partner.”

Indeed, Susan Cliff  from Robert Cliff  Master Jewellers says the business’ strategy of donating gift vouchers rather than product has led to an increase in foot traffic in her Sydney store.

“When we moved to a new area, we had lots of competition and we needed to find a way to get our name out there,” Cliff  explains. “Someone from a local school wanted us to make a donation but we offered a gift voucher because I wanted them to know where we were. It was extremely successful and it’s now a very big part of our marketing.”

Cliff says the retailer sets aside an annual marketing budget for gift vouchers, adding that recipients typically spend more than the original value.

How to connect

So how can jewellers best partner with local groups? Choosing to connect with organisations that share similar values and a target audience is a logical first step, according to Dibb.

“We have gone towards causes like women’s and kids’ sport because both heavily involve mums who form a significant portion of our customer base,”he explains.

Next, Grenville says striving for a long-term, mutually-beneficial relationship will yield far better returns than ad hoc commitments.

“When it’s a bit one-off, that’s where I find a lot of businesses donating items to not-for- profits don’t see the value other than feeling good about what they’ve done,” she says.

“It’s best to develop a relationship with an organisation rather than give a one-off donation. Have a strategy and a calendar of events for the year that lists the level of involvement of both parties – for example, what the jeweller will donate to an event and receive in return, such as access to advertising – so there’s benefits for everyone.”

Leon Baker Jewellers supports many local initiatives in Geraldton, WA

There’s no denying the current market is challenging but that doesn’t mean jewellers can’t strengthen ties with the community. To reduce the financial risk of donations – cash, product or otherwise – Schwantes suggests starting small.

“If you wait for a day when you’re in a position to help, that day will never come,” he says. “If you can do $100, do $100 or if it’s $1,000, do $1,000 – do whatever is within the bounds of your reach.”

Dibb says listing the cost price as a reserve for any goods donated to auction will ensure a fair return for both parties. This can also be an effective strategy to keep community connections active when times are tough.

“The charity will pay us the reserve price and they keep everything above the reserve,” he explains. “There’s no risk for either party – if it doesn’t reach that price it can be passed in.”

This type of marketing is notoriously difficult to measure. Despite their commitment to various causes, Saxelby-Balisky and Holloway both doubt they achieve any direct sales as a result of partnering with local organisations. Further, Grenville says activation methods like promo codes or discounts tied to particular occasions are the only effective ways to monitor returns on investment.

According to Cliff, gift vouchers allow her business to link customers to specific events and measure which of its community initiatives are most effective.

“We want to drive people back into our showroom,” she states. “If you just give a piece of jewellery you may never see them again and, even if you do, you can’t measure it. If you give a substantial gift voucher, trust me, they’ll come in and spend it.”

When it comes to promoting charitable acts and community connections in-store, online or via social media, many jewellers are understandably concerned about the possible negative perception that they are cashing in on goodwill; however, Grenville believes consumers are savvy enough to understand and respect the mutually-beneficial nature of these sorts of partnerships.

“You need to be transparent and make sure it’s done in a sophisticated and crafty manner rather than as cheap, blatant advertising,”she says.“This way, it’s seen as engaging with the organisation. You have to strike a balance between supporting the cause and getting that return.”

The moral of the story? Good deeds can be good business for jewellers who leverage mutually-beneficial relationships and make strategic contributions. In a difficult market, community support is paramount for all parties involved so start stretching those philanthropic muscles.