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

Salespeople Study Distracting the Wife, Avoiding Talk of ‘Price’ and Other Tactics

When a man in a Cartier watch stepped into the IWC Schaffhausen boutique in Beverly Hills recently, salesman Hua Huynh sprang into action. He led the customer to a case of Aquatimers, the Swiss brand’s line of self-winding dive watches. “What’s the damage?” asked the customer, pointing at one model. “The value is $5,800,” replied Mr. Huynh. “Would you like to try it?”

Hovering nearby, Jean-Marie Brücker winced.

Arnaud Gouel, one of the IWC Schaffhausen salespeople trained by consultant Jean-Marie Brücker, shows a watch to customers at a boutique in Beverly Hills, Calif.
After the gentleman replied, “Nahh,” and left, Mr. Brücker closed in on the salesman. Instead of asking a yes-or-no question, he chided, “next time, you say, ‘I invite you to try the watch. Please take a seat.’ ” He pantomimed swiftly laying the watch on a suede-lined tray, leaving the customer no easy out.

Mr. Brücker, a former Xerox salesman, is training IWC Schaffhausen’s sales force to sell expensive watches in a recession. After years of double-digit sales growth, sales of Swiss watches have fallen off drastically. Watchmakers like IWC—a 140-year-old company whose watches are considered collectors’ items and generally cost between $3,000 and $300,000—are having to re-learn the old-fashioned art of salesmanship.

The worst declines for Swiss watches are in the U.S., where sales fell 42% in May from a year earlier, according to the Swiss Watch Federation. The slowdown is visible at watch-collecting events. A lavishly catered party in Los Angeles for Breitling, another watch maker, recently drew fans who dined and sipped champagne, but the table displaying Breitling’s latest models was the loneliest in the place. Breitling, too, is getting creative, experimenting with holding sales events to which wives aren’t invited. “We’re finding they buy more when their wives aren’t there,” says Marie Bodman, chief executive of Breitling USA.

The Wealth Report
The Luxury Watch Bust These days, at least 60% of customers enter high-end watch boutiques to service their own watches rather than to buy new ones, says Mr. Brücker, who coaches salespeople to lavish attention on these mostly disgruntled clients in order to rebuild their loyalty.

Mr. Brücker has come far from his Xerox roots. As chief executive of Pôle Luxe, a Paris-based luxury-sales consulting group, he lists numerous high-end brands, including Cie. Financière Richemont, which owns IWC as well as Cartier and Van Cleef & Arpels, among his clients. His business is booming in the recession. He is opening new offices in New York, Hong Kong and Shanghai. He drives a Ferrari and has 61 luxury watches of his own, including four IWCs.

I observed his training of IWC associates for two days, watching as Mr. Brücker urged his students to say “value” rather than “price” and to sell “romance” rather than “products.” Benoit de Clerck, president of IWC North America, and Frederick Martel, the company’s marketing director, scribbled notes and peppered him with questions alongside their salespeople.

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.

Flattery sells, so to further those positive emotions, he insists that sales associates compliment the customer’s own watch, even if it’s from a competitor.

But don’t expect to bargain with his clients. He coaches them to offer a gift if a discount is requested. “The minute you leave the boutique, you forget” the discount, he said. A closet in IWC’s boutique is filled with coffee mugs, umbrellas, watch-winding devices and the like.

His methods dictate that salespeople lay the client’s well-worn watch on a tray between two shiny new ones, creating a contrast that subtly suggests it’s time to upgrade.

Because guilt over spending is playing a big role in the sales downturn, he teaches salespeople to suggest a “sorry gift”—of another timepiece—for a wife who might be disappointed that her husband just dropped a sizable sum on his own wrist.

On the second day of training, shop manager Arnaud Gouel moved in to welcome a couple. He amiably toured them through the boutique and offered them a coffee from the store’s Nespresso machine. Then he donned black gloves and placed the gentleman’s watch on a tray between two IWC timepieces. He strapped a rugged but elegant Big Pilot on the man’s wrist.

Mr. Brücker, hovering nearby, sent Mr. Huynh over to offer the wife a watch. “It’s not to sell her a watch. It’s to occupy her,” he whispered. “She’s bored and she will say, ‘OK, let’s go.’ ”

These happen to be key tenets of casino marketing, which revolves around flattering men, distracting their wives, and keeping them around as long as possible; the longer they stay, the more likely they are to spend money. But 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. “That’s why I love this job.”

I've never been much for salesmenship, but this grosses me out. Distract the wives? Get the husband to bribe the wife?

I didn't buy my watches because I liked being fawned upon by salesmen and free coffee. I guess this is why I haven't really been in an AD very much. Jewelery stores bug me. Same thing buying cars. I did all my research and negotiating online and only went to the dealer to write a check and pick up the car.

I did find the comment about discounts funny. Which would you rather have? A few hundred off or a mug?

Interesting stuff, and while we all know that all the coffees and fawning is just to get a sale, to see it written down like this does kind of take the "romance" out of it doesnt it!

The thing is, I honestly believe that all the sales "techniques" in the world are pointless if the customer has even half an ounce of brain. Unless someone is very easily led, there is no way a sensible, vaguely intelligent person will be bullied into buying something they don't actually want. I've never been able to see it.

And if someone came up to me and started talking about the "value" of something rather than the price, I think I'd laugh at them!

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Driver8

Site Moderator

I'm with Driver8 - I have been 'sold' something before, but not something anywhere close to the cost of a watch. If I am going to buy a watch then I am going to do my research first and will never be pressured into buying something that I hadn't already decided to buy.

That said, I am sure that to some people $35K is chump change, but even so - it's a lot to spend without any thought process.

That article is a fairly sad indictment of the sales process.

I wonder if part of the reason they are struggling is that they have historically relied on those types of techniques to make sales, but the internet has changed that. I've certainly found that to be the case with some car dealerships, especially the ones in the 'silicon valley'.

When I bought my current car, I emailed every Toyota dealership within about a 100 mile radius of my house. A lot of them 'get it'. They knew that I had already decided on the model, option package and color that I wanted. They understood that I had lots of pricing information in hand. Some of the dealers tried to put the 'moves' on me, but a few just emailed back with a straight up answer of whether they had the car I wanted and if they would meet my price.

I spent about 30 min total at the dealer after that. And they didn't even give me coffee.

I think that's a very valid point, especially in North America where the price that we often have to pay for big discounts is a sales staff who aren't particularly educated on the watch itself so can't sell on features alone.

I guess I'm happy to make that tradeoff. The information I can find online is way better than what 99% of salespeople can tell me, and I'm too busy to spend a lot of time in stores anyway.

I think what's going on here is a rapid rationalization of the luxury timepiece market.

There are a lot of manufacturers-Breitling included-who have increased capacity these last five years to keep up with demand. It appears that a lot of that demand came from buyers who may have been enriched (albeit briefly) by the global credit expansion.

Most of those 'new' customers will now be lost to the watchmakers probably forever. As a consequence, one or more brands and a whole mess of ADs will likely disappear from the market. It has occured to me that one of these could be Breitling, considering the profile of their customer base and the likely massive costs incurred to develop the in-house movement along with B01 design/marketing/sales staff. I don't think sales of the B01 after the first few months will come even reasonably close to breaking even, which would be okay if the B01 were a loss leader surrounded by robust demand for other products. That is not presently the case.

I've heard from a local Breitling sales rep that Breitling expects Asian demand to increase, at least at a pace that offsets declines in the Americas and Europe. I wouldn't bet on that as prosperity in the Asian markets is directly tied to their abililty to undercut other countries' wage base for high volume consumer discretionary purchases, which as we all know said volume is rapidly declining.

Should be a fun next few years to see who gets kicked off the island first. Breitling as an independent company is right up there as a candidate for a fire sale.

Interesting and thought provoking posts mktbubble74 - both the Wall Street Journal article and your comments above.

Regarding the sales techniques, I think it's fairly standard luxury goods selling. You could swap the man/woman around and train staff to sell the husband a watch whilst the wife looks at jewellery.

Regarding the market, I do wonder at Breitling's strategy of having, if I remember correctly, two price rises of around 10/12% in the UK during the last 6 months (so around 25% compound) during the worst recession the country has seen since financial records began. I can only assume Breitling have decided to abandon any attempt at growth in the UK market and instead look at markets like China and Russia where there is still massive opportunity.

I obviously don't know the economics of the B01 production but would agree that once the initial interest from the horologists amongst us wanes, there is unlikely to be a queue at the AD from Joe Public because it's an in-house movement. Maybe the long term strategy is to take the brand to sit alongside IWC or AP in 10 years' time. If so, losing the credit boom buyers would not be detrimental to the brand. Personally, I would question that strategy.

I do agree that without a sharply focused brand strategy for the next few years, Breitling is in danger of being yet another company to be swallowed up by either the Swatch or Richemont groups. In fact, I think Breitling would be the #1 target of Richemont to give it a competitive brand to Swatch's Omega in the "just below Rolex" market sector. In fact, for the long term survival of Breitling, maybe that's what we should all hope for. Let's face it, they did a pretty good job turning an obscure Florentine watchsmith making pug ugly watches into a global phenomenon.

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This story is exactly the reason I like shopping from the comfort of my computer, as I really can't stand the BS that I am fed when shopping in many AD's. I've found that I either end up talking to a sales person that knows less about a given watch than I do, or a overly flamboyant slick saleperson that is blowing sugar so far up my ass that it enrages me. I've never met that respectful, knowledgeable, and fair salesperson. I had the same experience when shopping for a luxury car, Mercedes was the worst. Instead I bought a VW Touareg V8 because the car and the people selling them were real, down to earth and not trying to distract my wife or tell me how bad my life would be without their car in my driveway.

Instead, I've made countless friends on the forums through watch deals, and the only person I have to deal with face to face is the sweet mail lady that hands me the package with a smille.

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I actually think it's a good thing that watch companies are seeing the value of training sales staff more thoroughly. All that stuff about distracting the wife or sandwiching the "value" of the watch between romantic statements is just fluff...it doesn't bother me because I know it isn't going to make me any more likely to buy. But most of what the sales staff are learning is how to make the customer feel comfortable and how to treat them well, and that is something I appreciate.

I also think that we on this forum are, sadly, the exception rather than the rule. We do lots and lots of research on the web and pretty much look at an AD as a means to an end (a good price on a good watch). But most people who buy high-end watches don't really know that much about them, and these sales techniques really will work, to a certain extent.

Mofongo

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Only if we want to see Breitling's fantastic customer service go out the window. Slightly an aside here, but I've heard more than one report of Richemont owned companies lacking somewhat on the customer service front.

Very interesting thread this. Nice one, Mktbubble.

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Driver8

Site Moderator

Yes, the paperback psychology employed by salespeople is curious – and as has been noted, less likely to be effective when used on watch enthusiasts who generally do a lot of research before purchasing.

I must admit, my growing interest in seventies auto chronos is partly driven by the fun of doing research and finding something that’s cool without the overheads associated with advertising, flashy showroom fit-outs and unctuous sales people. I imagine it’s the same for lots of discretionary items which attract enthusiasts and collectors – say guitars as an example. There are the target consumers – rich kids who want to be rock stars, and then the more discerning minority – crusty old jazz players who are looking for that dusty Gibson that’s been sitting in a case for 20 years.

Apart from an excess of images of a constipated looking Travolta, at least Breitling don’t go to the excesses of Rolex and Tag in the advertising department. On the other point raised – I’m sure there will be further consolidation in the Swiss watch industry – just as there has been before. We have to be honest here – the Breitling brand hasn’t been owned by the original Breitling family for nearly 30 years, and that’s turned out great and resulted in some splendid watches.



Hmmm…

Panerai – a matter of taste. I can appreciate some models, but must agree that the hype has always been excessive. From 5 meters away, some of them look like a G-shock, not a 10 grand watch! To be fair though, the Swiss don’t have a monopoly on watch design, and like the Germans, it was about time an Italian based design got some exposure – in the world of fashion and sexy machines, they know what they’re doing south of the border! However, for that northern Italian look, I’d rather an Anonimo – very nice “satinated” finished cases.

He looks like that because he just filled up his 737 with 12,000 lbs. of jet fuel and all he's getting today is this silly looking watch.

Seriously, sales people need to treat the customer well, especially in a luxury market. And when someone comes to look at a watch or a car or a washing machine, half the battle is done, because they've expressed interest, now all you (the salesperson) has to do is close them. And that's tough. So, they learn how to phrase things openly and make it more difficult for the customer to leave. Then, after they have closed the sale, a good salesperson will make the person feel good about that purchase, complimenting them on their excellent taste, stunning negotiation skills, and ability to procreate with any person that they choose. It's all a game; and instead of being insulted by it, one should revel in the experience.

Michael

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Breitling, Omega, Rolex... what can I say, I like Swiss watches.

There is a diffrent degree of sophistication inovlved with selling someone a high end luxury item. Not everyone is willing to buy a $5000 watch from a website or watch forum. As a matter of fact, most of you who do probably have are on your 2nd, 3rd, or 4th watch. More than likely, you bought your first from an AD who convinced/ reassured you of the value of a Breitling.

When I bought my Lexus, I was very impressed with the better than average customer service, how nice the dealership was, and the free snacks and drinks. At the end I felt good about my purchase and will buy another from the same dealership, and that's coming from someone who fights hand over fist for the best deal.

Sometimes is cool to to get shmoozed.

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