6 ms·

How to Sell a $35,000 Watch in a Recession

62 points by alaskamiller 17y ago

lionhearted 17y ago
Very interesting piece - learned a lot. This part was the most insightful to me: -- Mr. Brücker looked the part of a luxury customer, wearing Car Shoe moccasins and an IWC Big Pilot watch, which has shock absorbers to help it keep time under rough flying conditions. He used PowerPoint to impart what he calls the “macaroon technique,” referring to the sandwich-like French macaron pastry. This can be applied to most any product (including, presumably, a Xerox machine) and goes something like this: “Madam, this timepiece (or diamond or handbag) comes from our finest workshop and it has a value of $10,000. If you buy it, your children are sure to enjoy it for generations to come.” That pesky number is sandwiched between the product’s more romantic benefits. “We sell luxury—it’s an emotion,” Mr. Brücker instructed.
- mahmud 17y ago
  This is the line that stuck with me as well. Mention of children is a very clever technique; it removes the guilt of spending the kids' college money or inheritance; it makes shopping feel like an investment.
  - jimboyoungblood 17y ago
    A friend of mine has been shopping for a nice watch with the expressed purpose of being able to pass it to his son one day as a family heirloom. So what seems a "clever technique" to you might actually be "being aware of your customer's needs". Of course if you're determined to stay cynical, one could argue that my friend just fell prey to their ingenious marketing message.
patio11 17y ago
I know I'm supposed to feel class envy when reading about watches which are more expensive than salaries I have recently worked for, but I've got to admit fascination with the linen glove treatment. The psychology of putting the old watch between two new ones and having a wingman distract the wife is very amusing. Now if I could just figure out a way to do that for software which costs a thousandth as much. This sort of makes me want to put on my best business suit, walk to the luxury jewelry store I pass on the way home from work, and take some notes on their tactics.
- shard 17y ago
  I think part of the point is that the products are high margin enough to promote that level of individual attention. If guys selling $5 watches spend that much effort per watch, it'd never pay off. Carrying that over to software, these techniques would be most useful for the $100k per seat packages rather than the $5.99 packages. Although software is rarely sold on the notion of romance, so I don't know how sustainable these methods would be.
profquail 17y ago
I laughed when I saw the title...anyone remember this scene from "Trading Places"? Fifty bucks? No, no, no. This is a Rouchefoucauld. The thinnest water-resistant watch in the world. Singularly unique, sculptured in design, hand-crafted in Switzerland, and water resistant to three atmospheres. This is the sports watch of the '80s. Six thousand, nine hundred and fifty five dollars retail! You got a receipt? Look, it tells time simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome, and Gstaad. In Philadelphia, it's worth 50 bucks.
- mattculbreth 17y ago
  Looking good Louis!
mynameishere 17y ago
Have any serious economists looked into the matter of hugely mis-priced luxury items? There are the mostly-comedic treatments (as by Veblen) but it would interesting to read a serious study. When you have something that costs (maybe) a few hundred to produce, and sell it for $35,000, what is the actual effect on the economy? My guess: Very little. It's basically an idiotic millionaire writing out a check to an intelligent millionaire, with a little token for remembrance. ... Fun fact: The results in Amazon's "Sort by Price: High to Low" are algorithmically identical to its "Sort by appearance: Shitty to Attractive": http://www.amazon.com/s/qid=1248405570/ref=sr_st?keywords=watch&rs=377110011&page=1&bbn=377110011&rh=n%3A377110011%2Cn%3A%21378516011%2Ck%3Awatch&sort=-price http://www.amazon.com/s/qid=1248405570/ref=sr_st?keywords=wa...
- anigbrowl 17y ago
  I suspect it costs a good bit more than that to produce, though if you begin with the idea to sell for $35,000 you can comfortably budget a tenth of that for manufacture. I think when someone buys such a watch it is not because they really think it is so much better (although a few fools do) as to signal the ability to make such a purchase. Real luxury goods are an entirely separate economy where normal economic considerations are upended in favor of status. Via business, I get copies of a magazine for rich people featuring reviews of such baubles as Versace-styled helicopters.
  - jimboyoungblood 17y ago
    A lot of highly specialized manual labor goes into the production of high-end watches, and above $20K they are usually made gold or platinum, so there are higher material costs as well. Like anything else, prices of luxury goods are determined by the market- as long as someone is buying, they are by definition not overpriced. Comments here regarding "idiotic millionaires" and the like reek of class envy.
    - Retric 17y ago
      You don't use much gold in a high end watch as it's heavy and not all that strong. Nobody wants to walk around with a 3 pound watch, and huge diamonds on watches look stupid. So it's all about restricted supply. This watch costs 200k because we are going to make 100 of them. One of the hidden truths about high end watches is they don't keep vary good time. And they don't have high resale value most of the time.
JacobAldridge 17y ago
I think the most important lesson here is buried deep into the article - "Mr. Brücker was never disdainful of customers - in fact, he championed the need for better, more thoughtful service that makes the customer sense caring and quality - the stuff of luxury. "You’re selling pure emotion," he said." The rest is tips and tricks - interesting and useful perhaps, but by focusing on them the article comes across as scummy sales instead of the ongoing relationship that is essential (and very profitable!) in the $35,000 Watch market.
Raphael 17y ago
very carefully.
smithjchris 17y ago
I think the issue is why is there a watch worth $35000? I have a cheap Casio $10 which is functional. I don't even use that half the time (I have a clock on my phone). I want the time, nothing else.
- jyu 17y ago
  The same can be said about laptops. Why buy a $2,000+ Macbook Pro when you can get similar functionality in a $400 Acer? Simple answer: It's nicer.
  - smithjchris 17y ago
    Personally I prefer the Acer. It allows me to: a) Not require the work to gain the remaining $1600 meaning more time with my family. b) Alternatively if it is from money surplus, it allows me to do more activities with my family. Plus does it help you get from problem A to solution B any better or is that down to your abilities? The MacBook is an Acer in a pretty box. If you're interested in the box, you lack any real meaning in your life. Real beauty is in the mind.
    - jrockway 17y ago
      Yeah, but now the Rails community won't think you're cool, and the barista at Starbucks won't want to sleep with you anymore. Fail!
      - smithjchris 17y ago
        I know this is the ultimate cliche but LOL. I think you just summed up my thoughts entirely.
    - jimboyoungblood 17y ago
      I'm sure the Acer serves your needs perfectly well. Have you ever considered that other people's needs are different from yours? If you're interested in the box, you lack any real meaning in your life. Real beauty is in the mind. Let me rephrase what you just said: to have any real meaning in your life, you have to be completely uninterested in physical appearance. So if I have a passing interest in design, architecture, or art, my life lacks meaning?
cturner 17y ago
How do you go about finding someone good to fix an obscure Swiss watch when you are living in a city that is not in your country? The issue is - once you hand it over for service there's no particular reason for you to get it back except for the honesty of the repairer. How do you guage this? Or is it better to freight it back to manufacturer?
jj8586 17y ago
Here I thought the real news of the article was how high-end jewelery sellers' skills had atrophied over the boom years.

62 points by alaskamiller 17y ago

Very interesting piece - learned a lot. This part was the most insightful to me: -- Mr. Brücker looked the part of a luxury customer, wearing Car Shoe moccasins and an IWC Big Pilot watch, which has shock absorbers to help it keep time under rough flying conditions. He used PowerPoint to impart what he calls the “macaroon technique,” referring to the sandwich-like French macaron pastry. This can be applied to most any product (including, presumably, a Xerox machine) and goes something like this: “Madam, this timepiece (or diamond or handbag) comes from our finest workshop and it has a value of $10,000. If you buy it, your children are sure to enjoy it for generations to come.” That pesky number is sandwiched between the product’s more romantic benefits. “We sell luxury—it’s an emotion,” Mr. Brücker instructed.

mahmud 17y ago
This is the line that stuck with me as well. Mention of children is a very clever technique; it removes the guilt of spending the kids' college money or inheritance; it makes shopping feel like an investment.
- jimboyoungblood 17y ago
  A friend of mine has been shopping for a nice watch with the expressed purpose of being able to pass it to his son one day as a family heirloom. So what seems a "clever technique" to you might actually be "being aware of your customer's needs". Of course if you're determined to stay cynical, one could argue that my friend just fell prey to their ingenious marketing message.

patio11 17y ago

I know I'm supposed to feel class envy when reading about watches which are more expensive than salaries I have recently worked for, but I've got to admit fascination with the linen glove treatment. The psychology of putting the old watch between two new ones and having a wingman distract the wife is very amusing. Now if I could just figure out a way to do that for software which costs a thousandth as much. This sort of makes me want to put on my best business suit, walk to the luxury jewelry store I pass on the way home from work, and take some notes on their tactics.

shard 17y ago
I think part of the point is that the products are high margin enough to promote that level of individual attention. If guys selling $5 watches spend that much effort per watch, it'd never pay off. Carrying that over to software, these techniques would be most useful for the $100k per seat packages rather than the $5.99 packages. Although software is rarely sold on the notion of romance, so I don't know how sustainable these methods would be.

profquail 17y ago

I laughed when I saw the title...anyone remember this scene from "Trading Places"? Fifty bucks? No, no, no. This is a Rouchefoucauld. The thinnest water-resistant watch in the world. Singularly unique, sculptured in design, hand-crafted in Switzerland, and water resistant to three atmospheres. This is the sports watch of the '80s. Six thousand, nine hundred and fifty five dollars retail! You got a receipt? Look, it tells time simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome, and Gstaad. In Philadelphia, it's worth 50 bucks.

mattculbreth 17y ago
Looking good Louis!

mynameishere 17y ago

Have any serious economists looked into the matter of hugely mis-priced luxury items? There are the mostly-comedic treatments (as by Veblen) but it would interesting to read a serious study. When you have something that costs (maybe) a few hundred to produce, and sell it for $35,000, what is the actual effect on the economy? My guess: Very little. It's basically an idiotic millionaire writing out a check to an intelligent millionaire, with a little token for remembrance. ... Fun fact: The results in Amazon's "Sort by Price: High to Low" are algorithmically identical to its "Sort by appearance: Shitty to Attractive": http://www.amazon.com/s/qid=1248405570/ref=sr_st?keywords=watch&rs=377110011&page=1&bbn=377110011&rh=n%3A377110011%2Cn%3A%21378516011%2Ck%3Awatch&sort=-price http://www.amazon.com/s/qid=1248405570/ref=sr_st?keywords=wa...

anigbrowl 17y ago
I suspect it costs a good bit more than that to produce, though if you begin with the idea to sell for $35,000 you can comfortably budget a tenth of that for manufacture. I think when someone buys such a watch it is not because they really think it is so much better (although a few fools do) as to signal the ability to make such a purchase. Real luxury goods are an entirely separate economy where normal economic considerations are upended in favor of status. Via business, I get copies of a magazine for rich people featuring reviews of such baubles as Versace-styled helicopters.
- jimboyoungblood 17y ago
  A lot of highly specialized manual labor goes into the production of high-end watches, and above $20K they are usually made gold or platinum, so there are higher material costs as well. Like anything else, prices of luxury goods are determined by the market- as long as someone is buying, they are by definition not overpriced. Comments here regarding "idiotic millionaires" and the like reek of class envy.
  - Retric 17y ago
    You don't use much gold in a high end watch as it's heavy and not all that strong. Nobody wants to walk around with a 3 pound watch, and huge diamonds on watches look stupid. So it's all about restricted supply. This watch costs 200k because we are going to make 100 of them. One of the hidden truths about high end watches is they don't keep vary good time. And they don't have high resale value most of the time.

JacobAldridge 17y ago

I think the most important lesson here is buried deep into the article - "Mr. Brücker was never disdainful of customers - in fact, he championed the need for better, more thoughtful service that makes the customer sense caring and quality - the stuff of luxury. "You’re selling pure emotion," he said." The rest is tips and tricks - interesting and useful perhaps, but by focusing on them the article comes across as scummy sales instead of the ongoing relationship that is essential (and very profitable!) in the $35,000 Watch market.

Raphael 17y ago

very carefully.

smithjchris 17y ago

I think the issue is why is there a watch worth $35000? I have a cheap Casio $10 which is functional. I don't even use that half the time (I have a clock on my phone). I want the time, nothing else.

jyu 17y ago
The same can be said about laptops. Why buy a $2,000+ Macbook Pro when you can get similar functionality in a $400 Acer? Simple answer: It's nicer.
- smithjchris 17y ago
  Personally I prefer the Acer. It allows me to: a) Not require the work to gain the remaining $1600 meaning more time with my family. b) Alternatively if it is from money surplus, it allows me to do more activities with my family. Plus does it help you get from problem A to solution B any better or is that down to your abilities? The MacBook is an Acer in a pretty box. If you're interested in the box, you lack any real meaning in your life. Real beauty is in the mind.
  - jrockway 17y ago
    Yeah, but now the Rails community won't think you're cool, and the barista at Starbucks won't want to sleep with you anymore. Fail!
    - smithjchris 17y ago
      I know this is the ultimate cliche but LOL. I think you just summed up my thoughts entirely.
  - jimboyoungblood 17y ago
    I'm sure the Acer serves your needs perfectly well. Have you ever considered that other people's needs are different from yours? If you're interested in the box, you lack any real meaning in your life. Real beauty is in the mind. Let me rephrase what you just said: to have any real meaning in your life, you have to be completely uninterested in physical appearance. So if I have a passing interest in design, architecture, or art, my life lacks meaning?

cturner 17y ago

How do you go about finding someone good to fix an obscure Swiss watch when you are living in a city that is not in your country? The issue is - once you hand it over for service there's no particular reason for you to get it back except for the honesty of the repairer. How do you guage this? Or is it better to freight it back to manufacturer?

jj8586 17y ago

Here I thought the real news of the article was how high-end jewelery sellers' skills had atrophied over the boom years.