Authored by Marlene Richey
We hear a lot about "perceived" value and "real" value, especially when pricing jewelry. My favorite personal story about perceived value happened when I owned a jewelry gallery in Portland, Maine. One of the designers I carried had simple 14-karat gold geometric pendants on 16" chains. They sold for approximately $150 retail. Before Christmas one year, she took the same pendant and flush-set a 2-point diamond on it. The price went up to $300. I couldn’t keep the diamond pendants in stock at my store; they seemed to fly out the door. Every young man wanted to give his girlfriend a diamond necklace. Every husband wanted to give his wife a diamond necklace. The addition of a diamond to the pendant, even a small one, increased the perceived value of the piece.
When I am teaching a class, I recommend "slapping a diamond on it" if students want to raise the value of any of their pieces. The students laugh and do it. They find this works.
"Real" value is the actual value of the materials, labor and other costs incurred in the production of a piece. "Perceived" value is what any given customer believes something is worth. A ring from a high-end store sells for much more than one at your local brick and mortar store. A luxury car sells for more than an economy car. It all comes down to the price that customers are willing to pay for a service, an experience, or a piece of jewelry.
So how do you raise the perceived value of your work? If you have some pieces that have won a prestigious award and you are able to use the term "award winning jeweler" when marketing your work, that might influence the value of your work. If your work is worn by a well-known celebrity, that could increase the value without making any changes to the materials or labor. If it is made in the United States. If it is "green." If it is a one-of-a-kind. If it is on the front page of the New York Times "Style" section. It all comes down to marketing, taking advantage of opportunities that come your way, hard work, and a touch of luck.
Study who your customer is and what they consider valuable. What are they willing to pay? What is the emotional appeal of your jewelry? Are they willing to pay extra for extraordinary customer service? Are they willing to pay more if they are a part of the design process? Is it prestigious to own one of your pieces? Do your designs stand out from the crowd so your audience and their friends recognize them as yours? Once you know this information, then you can start designing pieces that capture your customers’ attention.
A well-branded product is going to sell for more if the brand has an established reputation of excellence. A reputation takes time to build; begin aiming in that direction right now.
Another story: When I was traveling around the United States selling our line of designer jewelry, opening doors and closing sales was much easier when I mentioned Neiman Marcus and Nordstrom as stores that currently carried our designs. Other stores were impressed that our jewelry was available in these well-known entities. It was the same work, designs and materials, but it was perceived in a new way.
Getting these stores to notice us and eventually start a relationship was hard work. I traveled around the United States and made a point of stopping by every single one of their locations with the intention of introducing our work and getting the managers to notice us. It took a couple of years, but it paid off.
How can you market your work to have a higher perceived value? Advertising guru and TED Talk speaker Rory Sutherland stated that perceived value can be used to "make new things familiar and familiar things new." So how can you use that in your messaging? How can you turn your current work into something new? And how can you introduce new work that feels familiar?
So … "what about the potato in the title," you ask? Rory Sutherland tells the story of Frederick the Great of Prussia, who rebranded the everyday potato in 1774. The people of Prussia had turned up their noses at growing potatoes, and he wanted to protect them from famine. He had the bright idea to plant a garden with potatoes, making them the "royal" vegetable, guarded day and night. The perceived value of the potato soon hit an all-time high with his people. Frederick gave the guards secret orders not to watch the garden very closely. As with anything perceived as valuable, people want it. The peasants began stealing the potatoes and growing their own, thus preventing a famine—And providing an excellent example of rebranding!
Take a lesson from Frederick and think about how you can increase the "perceived" value of your work.
Interested in developing your business skills even more? Take a look at more articles from Marlene and others!
Marlene Richey started a jewelry design firm with no prior business experience. During the 35 years since, Marlene has run a wholesale business and a retail gallery, participated in hundreds of craft and trade shows, and traveled across America selling the pair’s jewelry. She has served on the boards of SNAG, CJDG, Maine Craft Association, Metalwerx and WJA. Marlene consults with artists, teaches workshops and was professor at the Fashion Institute of Technology and Maine College of Art. She is also a contributor to various jewelry and craft publications and wrote an award-winning book on running a jewelry business, Profiting by Design.