Playing Diocletian’s Numbers Game
As I write this, I’m seated on an American Airlines flight from Dubrovnik to Philadelphia. I had travelled to Croatia to spend a week on a Leopard 45 catamaran out of the Croatian city of Split (about 130 miles north on the coast), but the huge masses of tourists thronging from America to Dubrovnik caused American to launch direct flights from Philly, so I decided to take advantage of the nonstop round-trip flight.
In recent years, Dubrovnik has become the hottest tourist attraction on the planet, owing in large part to the success of HBO’s Game of Thrones, which used the various castles in Croatia, but especially the Walled City in old Dubrovnik, as a visual backdrop for the show’s story line. Unsurprisingly, I am absolutely surrounded by Millennials on this aircraft, no doubt motivated by the fact that they’re fans of the show. In my view, their choice to spend their discretionary income on this travel experience, rather than on luxury goods (like fine jewelry), lies at the very heart of the challenge that our industry faces.
These folks just don’t value jewelry the way their parents did, and perhaps even more alarmingly, their collective sense of the “right amount” to spend on an engagement ring appears to be headed south. So, with changing consumer attitudes like these, you may need to consider a new strategy, which brings me to the Roman Emperor Diocletian.
Diocletian ascended to the Roman throne at an especially bad time, at the end of a 100-year period where a very real “Game of Thrones” was being played. Amazingly, there had been 51 Roman Emperors during the preceding hundred years, making the average life expectancy of an Emperor less than 2 years! But unlike his 51 immediate predecessors, Diocletian was a superb strategist, and he formulated a plan based on numbers that provided not only for a successful 20-year reign, but Diocletian completely beat the odds by becoming the first Roman Emperor ever to successfully retire!
His plan was surprisingly simple. He recognized that it was pretty easy to kill an Emperor, which meant that becoming Emperor was not especially challenging. The problem was that once you became Emperor, it was so easy for someone with a pretension to the throne to kill you that longevity was simply not in the cards, and Roman instability at that time was sufficiently great to prevent anyone from consolidating a power base long enough to form an adequate defense from regicide. So Diocletian solved his problem ingeniously. Rather than fight the system, he played the Numbers Game, divvying up the Empire into 4 autonomous units, and appointing a co-Caesar for each of the other three. Diocletian correctly reasoned that while it was easy to kill one Caesar, it was impossible to simultaneously kill four. Any usurper brash enough to take the life of one of the four Caesar’s would immediately be put to death by the three who remained, providing just the stability that the Empire needed.
His brilliant plan worked perfectly, allowing not only for a 20-year reign, but also for the creation of an impenetrable “Retirement Palace” in Split, Croatia, just 5 miles from his ancestral home of Salona, that was sufficiently strong to offer protection from all threats until his final death in 311 A.D. And he is generally credited with bringing about reforms during his reign that allowed the Roman Empire to persist for another 150 years.
So having studied the Diocletian scenario, let’s consider yours. It’s just your luck to live at a time where increasingly, the only reliable big-ticket revenue stream is bridal, owing to changes in consumer enthusiasm for big-ticket luxury items. You furthermore face a possible change in engagement ring price level preferences in which preferred price points are likely to decline. So, what would an outside-the-box thinker like Diocletian choose to do?
I suspect he would focus all of his efforts towards bridal, with a mind towards cranking up engagement ring transaction counts to compensate for a likely future reduction in average price levels. Diocletian would choose not to own a jewelry store that sells engagement rings, but instead to own an engagement ring store that also sells jewelry. It’s all a numbers game, and the good news is that last year, roughly 300 million Americans purchased over 3 million engagement rings, so you can reasonably assume that in your community, annual engagement ring purchases are roughly equal to 1 percent of the population. Do the math, and you’re likely to find that your engagement ring unit market share offers an excellent opportunity for improvement.
So play the Bridal Numbers Game! Crank up your unit sales by whatever means necessary (and if you don’t know how, contact me at the e-mail address below, since methods for increasing bridal market share are readily available, with cost/benefit numbers that are easy to understand.). And once you do, I suggest you take advantage of the newfound income and profit stream to visit Croatia next October, since with a raucous political campaign ahead, I suspect late October of 2020 will offer a superb opportunity to take a little time off without missing anything.