Affinity marketing at it’s very, very finest. Rolex has made Mariners, Aviators, Drivers, etc, seek out and own a luxury time piece.

Dave Young: 

Welcome to The Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom-and-pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those. 

[Bonney Home Services Ad]

Dave Young: 

Welcome back to the Empire Builders Podcast. Dave Young here alongside Stephen Semple. And Stephen whispered in my ear, as we all know he does at the very beginning of the show, but he whispered in my ear that he’s not going to tell me the topic. He’s going to keep it to himself and tell a little story. 

Stephen Semple: 

Yeah, I’m going to rob you of your preparation time. 

Dave Young: 

See, it’s the thing that my brain loves is to hear the thing and remember my story about whatever the product is. So you go ahead with your little story. 

Stephen Semple: 

And you go into your imaginary world and ignore me. 

Dave Young: 

I’ll be over here just doodling. Let me know when we’re ready to start. 

Stephen Semple: 

So what inspired this was I was in Vegas recently and I was speaking at one of these big international cleaning conferences- 

Dave Young: 

As one does well. 

Stephen Semple: 

And these things are huge. Like Vegas is so big, man, it’s crazy. But what I did each morning is there’s a coffee shop I really like in the Bellagio that has just great espresso. So my morning routine was get up, go over to this coffee shop, grab an espresso. And if anyone’s been in the Bellagio, the retail outlets in the Bellagio are phenomenal. 

Dave Young: 

Oh, God. 

Stephen Semple: 

They’re Harry Winston, and Tiffany’s, and Cartier, and Rolex. They are all the big fancy brands. 

Dave Young: 

I am so clumsy. I can’t afford to sneeze if I go into one of those places. 

Stephen Semple: 

And what’s incredible actually, if you’re a retailer, and I’ve said this a lot, if you’re a retailer and you’re looking for ideas on how to do store displays, spend two days wandering through Vegas. The store displays are just phenomenal. But here’s the thing that stood out to me. Each morning I was there just before the retail stores would open, and there’s one store that every morning had a lineup, and that was Rolex. 

Dave Young: 

Rolex? 

Stephen Semple: 

Every morning there was a lineup at Rolex. Not at Cartier, not at Tiffany’s, at Rolex. And I went, “Wow, that says something about the power of Rolex.” So I looked at it and said, we all know Rolex is a super powerful brand. People who have Rolex stores can’t keep Rolex in stock. But that just really did it for me. 

Dave Young: 

It turns out Rolex means coffee in Italian or something. They were just in the wrong place. 

Stephen Semple: 

Might’ve been. Might’ve been. So what I want to do with Rolex is we’ll talk a little bit about the early innovation of Rolex, but the big thing I want to talk about is how Rolex promoted its brand. Because they did some really interesting things how they promoted the company. So Rolex was founded by Hans Wilsdorf, and he really was a pioneer in taking the pocket watch to the wristwatch. And legend, whatever has it that the name Rolex, as he describes it, the name Rolex was whispered in his ear when he was in a horse-drawn carriage going through Cheapside in the City of London. It was just this inspirational name. 

And it didn’t mean anything, but he just liked the sound of it. And the first breakthrough came in July. He was given Class A Observatory Certificate was awarded to the wristwatch, which was basically the certificate saying, hey, keeps really amazing time. And then it was in 1926 that they created the Oyster Shell, which is that hermetically sealed watch. But basically, the company was founded in 1905 in London. And they started first of all by importing Swiss watch movements and placing them into quality watch cases. 

Dave Young: 

Okay. 

Stephen Semple: 

So they get the movements from Switzerland, put them in the case, and these watches were sold to jewelers who then added their names to the dials. So they were originally really a white labeled product. 

Dave Young: 

Interesting. Okay. 

Stephen Semple: 

And then it was in 1908 that the name Rolex was registered. Because they wanted this short, easy name, and there was this inspirational moment. And then in 1910, they became the first wristwatch in the world to receive the Swiss Certificate, a chronomatic precision from the Official Watch Rating Center in Bienne. Look, this was a groundbreaking moment because up until that point the only watches that were considered accurate were pocket watch. 

Dave Young: 

Okay. 

Stephen Semple: 

So it was the first wristwatch to keep really great time. And then in 1914, the Kew Observatory in England awarded wristwatch this Class A Precision Certificate. And this was previously only reserved for marine chronometers. 

Dave Young: 

Wow. Okay. 

Stephen Semple: 

So, again, big deal for establishing Rolex’s reputation for accuracy and reliability. In 1919, they moved the headquarters to Geneva because Geneva is really the place that’s known for fine watchmaking. And Wilsdorf wanted to really make sure that they had the highest quality craftsmanship. And then one of the big things that happened in 1926 is they introduced the Oyster, which was the world’s first waterproof wristwatch. So it was innovation, it was this hermetically sealed case, which also protected the movement from water and dust. And they did a ton of testing actually with the military to show its durability. 

Dave Young: 

Wow. Okay. 

Stephen Semple: 

And in 1927, Rolex got a lot of publicity when the swimmer Mercedes Glitz wore the Rolex during her attempt to swim across the English Channel. So over 10 hours in the water, and the watch remained in perfect working condition, really highlighting its water resistance. And the last part of this is, that a lot of people I don’t think realize, is that Rolex actually owned by a charity. 

Dave Young: 

Yeah. 

Stephen Semple: 

It’s owned by the Hans Wilsdorf Foundation, which it became owned by the charity in 1960 when Hans Wilsdorf passed away. 

Dave Young: 

Is it an orphanage? Is it a- 

Stephen Semple: 

Yes, it is. 

Dave Young: 

Okay. 

Stephen Semple: 

Yeah. So very similar to Hershey’s. We need more of these companies passing to charities in my mind. But that is a whole separate topic. 

Dave Young: 

Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this. 

[Empire Builders Ad]

Dave Young: 

Let’s pick up our story where we left off. And trust me, you haven’t missed a thing. 

Stephen Semple: 

So yes, Rolex did all of this innovation, but here’s what I found really interesting, especially when I was really taking a look at the Submariner. So the Submariner watch brand is the one that I dove into to take a look at how they promoted it. Because the Submariner is the one that is the hermetically sealed. And what they did in their advertising was first of all they advertised the English Channel. Then they advertised the work that they did with the British military in terms of proving how great the watch is. Then they attached it to skin diving. And then Jacques Cousteau. And if you think about at the time, a couple of interesting things happened coming out of World War II. Coming out of World War II you had an emergence of a new middle class, people who had money and wanted to do aspirational things. You had emergence of new technology, scuba diving and skin diving was a new technology and something aspirational. And then also attached it to celebrity. And I think people would just go to, oh, celebrity attachment. But it was more than just celebrity attachment. It was very specific. It was, here’s a cool guy who’s representative of this new technology and this new idea doing this cool thing that actually relies on a watch being durable. 

Dave Young: 

Yes. 

Stephen Semple: 

Because now it’s not some fancy, expensive watch that I can only wear to dinner. It’s actually a watch that I can wear every day. And that led to the explosion in the Submariner. This was not an accident, because guess what they did? The Daytona, automobile racing a new technology, Steve McQueen. Cool endorsements. 

Dave Young: 

Sure. 

Stephen Semple: 

Durable watch because racing cars is tough. Mountain climbing. Sir Edmund Hillary. 

Dave Young: 

Yeah. And we know that story. They were able to get their products to be identified with groups of people that are man, active and aspirational and competitive. And they made their watch the prize. 

Stephen Semple: 

Yes. And they did this in race car driving, diving. They have the watch line for pilots and yachtsmen. They’ve got the yachtsmen. Each one of them, this is what they’ve done. They’ve said, there’s this group that I identifies themselves as being a yachtsman. They’ve got the cool yachtsmen using the watch. They’ve made it durable and put some special features on it. This was not accidental. This was not a, Oh, I did it once. No, they’ve done that over and over and over and over again. And I found it really, really interesting that they’ve just done this rinse and repeat on it. And you know who’s taken a page from their book? Red Bull. 

Dave Young: 

Sure. 

Stephen Semple: 

If we go back to the early days of Red Bull before F1, what did they do? They went to these crazy sports. 

Dave Young: 

Ex sports, and yeah, yeah. Ex games. 

Stephen Semple: 

And the guy flying with the weird suits and all that other stuff and said, okay, Red Bull is for people who aspire to be these extreme athletes doing these cool niche things. And they sponsored them and attached their product to that. 

Dave Young: 

Well, and the really interesting thing about that, and Red Bull didn’t need to do this is the snowboarders version of Red Bull. They didn’t need to separate different products for it like Rolex did. But it’s a niche marketing that attaches your product to a tribe. 

Stephen Semple: 

Yes. 

Dave Young: 

To a group of people that identify with each other and with the sport or activity that they’ve chosen. 

Stephen Semple: 

Yes. 

Dave Young: 

And they were brilliant at that. The product line reflects it. 

Stephen Semple: 

Yes. 

Dave Young: 

If they were weak, and you tell me if I’m wrong here, it was in helping their retailers tell the Rolex story. 

Stephen Semple: 

Yeah. And what’s interesting is Rolex is even changing much of how they’re doing their distribution. It’s all now going actually out through Rolex stores. 

Dave Young: 

Were the people in line waiting to see if the store got any new watches in overnight or something? 

Stephen Semple: 

Well, I didn’t interview them, so I don’t know. But what I’m going to guess is the average Rolex watch owner owns three. They don’t own one, they own three. And yes, there are certain really sought after Rolexes. So I wouldn’t be surprised if that’s probably what was going on. But to me, I was just amazed every day that’s where the lineup was. But coming back to the promotion of Rolex. 

Dave Young: 

Sure. 

Stephen Semple: 

If there was a weakness, that’s where the weakness sat. And at the end of this podcast, I’m going to drop in the radio ad that our partner, Roy Williams, created for Woody Justice hugely successful and really speaks to that whole idea of the watch being a reward. In fact, we’re going to insert it right here. So let’s just take a moment and play that ad. 

[Roy’s Rolex Ad]

You are standing in the snow five and one half miles above sea level gazing at a horizon hundreds of miles away. It occurs to you that life here is very simple, you live or you die. No compromises, no whining, no second chances. This is a place constantly ravaged by wind and storm where every ragged breath is an accomplishment. You stand on the uppermost pinnacle of the earth. This is the mountain they call Everest. Yesterday it was considered unbeatable, but that was yesterday. As Edmund Hillary surveyed the horizon from the peak of Mount Everest, he monitored the time on a wristwatch that had been specifically designed to withstand the fury of the world’s most angry mountain. Rolex believed Sir Edmund would conquer the mountain, and especially for him, they created the Rolex Explorer. In every life there is a Mount Everest to be conquered. When you have conquered yours, you’ll find your Rolex waiting patiently for you to come and pick it up at Justice Jewelers. 

I’m Woody Justice, and I’ve got a Rolex for you. 

Stephen Semple: 

So, yeah, that ad speaks to the whole idea where you’re saying that it is a reward. 

Dave Young: 

It’s a reward. And cool thing about that ad also is the use of first person. You are standing in the snow. 

Stephen Semple: 

Yes. 

Dave Young: 

So it puts you at the top of the mountain. 

Stephen Semple: 

Yes. 

Dave Young: 

It puts you in the place where you have achieved victory over your goal, whatever that is. And later in the ad, it talks about that in every life, there’s a Rolex. It also in 60 seconds transferred ownership of that watch to you. 

Stephen Semple: 

Yeah, sure did. 

Dave Young: 

It’s your Rolex and all you have to do is come down and get it. 

Stephen Semple: 

We could do a whole episode just talking about the magic in that ad. But here’s the interesting thing. Today, this technique that Rolex used of finding a group and speaking to that group, finding the tribe, is easier today than it’s ever been because social media immediately congregates around tribes. 

Dave Young: 

Yeah. 

Stephen Semple: 

And what Rolex did with people like Steve McQueen and Jacques Cousteau is expensive. What Red Bull did, where you’ve got an athlete in this weird niche sport that probably has never had a sponsor, probably not that expensive. 

Dave Young: 

Not to get started, until they started airplanes and- 

Stephen Semple: 

Yeah. Until they started airplanes and F1 and all that other stuff. But in the early days, it was like guys skating down hills and crap like that. It was really crazy, crazy stuff they were doing. So this technique that Rolex did, this technique that Red Bull has done, and we’ll do an episode on Red Bull in the future, people can do in terms of finding that tribe, attaching into that tribe or finding a spokesperson in that tribe. But the cool thing is, that I loved about Rolex was it over and over and over and over again. I’m amazed that they have not created one yet for the space industry. 

Dave Young: 

Sure. Well, you’d probably sell at least three or four to the billionaires that are building rockets. 

Stephen Semple: 

Well, again, it’s that here’s the watch that wet to space. It’s the aspirational. 

Dave Young: 

Yeah. There’s plenty of people out there that would buy whatever Elon Musk has on his wrist. 

Stephen Semple: 

Yeah, yeah. 

Dave Young: 

So this method, it’s actually a method of targeting. And most people get targeting wrong, they target with demographics. So we need 50-year-old males who have achieved something in their life. It’s like, well, how are you going to sort that out in an ad? Where do you find that audience? And the more powerful thing is to target with your copy. 

Stephen Semple: 

Yes. 

Dave Young: 

You just make sure your ad resonates with the people that you want to sell a Rolex to, and then you let everyone hear the ad. 

Stephen Semple: 

Yes. 

Dave Young: 

And the people that fit the niche will self select and go, oh, well, yes, this is the one that I need. 

Stephen Semple: 

Yes. 

Dave Young: 

Even the Walter Mitty’s, if they have the funds, they’re like, I haven’t ever climbed a mountain, but in my head, man, wouldn’t I love to be on Mount Everest. Maybe I’ll just get one of those watches instead because that seems safer. 

Stephen Semple: 

And there’s an interesting extra thing here, especially when it comes to luxury brands. I was having this conversation last week when I was in Houston with Jeff Sexton and we were talking about this. And one of the other benefits that happens, especially when you make something like a Rolex well-known, popularized, and aspirational, is there’s a self-identification that comes when somebody puts a Rolex on because we all know what Rolex stands for. So the fact that everybody knows what Rolex stands for when I wear a Rolex, carries that prestige. When I wear a Patek Philippe, which is a more expensive watch, only watch people and people in the jewelry industry know about Pateks. 

Dave Young: 

Yeah. 

Stephen Semple: 

The common man doesn’t. 

Dave Young: 

Yeah. 

Stephen Semple: 

And so that’s where some of the extra power of the mass media approach that Rolex has done is everyone knows Rolex is a fancy-ass watch. 

Dave Young: 

And the Patek is targeted to a way more tightly targeted group just in the fact that it’s targeted to people that are watch lovers. And it’s not connecting the watch to some- 

Stephen Semple: 

Correct. 

Dave Young: 

… External group. 

Stephen Semple: 

Correct. 

Dave Young: 

The tribe that you’re a part of. 

Stephen Semple: 

Correct. 

Dave Young: 

It’s just, oh, you’re a watch nerd. Here’s a watch. 

Stephen Semple: 

Yeah. 

Dave Young: 

Really expensive. Yeah. 

Stephen Semple: 

Yeah. And look, they do well, but they don’t have the same cachet as Rolex. So anyway, sort of finish this off. They can’t keep Rolexes in stock. There’s certain Rolexes where years on a waiting list getting it. And here I am in Vegas where there’s all of these places, and the one store that has the lineup is Rolex. And the more I studied it in terms of their marketing, what I realized was how purposeful… And look, this is another lesson for people. When you find a marketing process that works, rinse, repeat. And they did it. 

Dave Young: 

Yeah. 

Stephen Semple: 

They did it in diving, flying, race car driving, yachtsmanship. They took that idea and they rinsed repeat, rinsed repeat, rinsed repeated it. 

Dave Young: 

Yeah. Yeah. Well, thank you for sharing the Rolex story. And I forgive you not whispering Rolex into my ear the way, who’s the guy that founded it? Somebody whispered it in his ear. 

Stephen Semple: 

Yeah. Hans Wilsdorf. Yeah. 

Dave Young: 

He got to have the Rolex whispered in his ear moment and I didn’t. Maybe I don’t forgive you. 

Stephen Semple: 

Well, on that note- 

Dave Young: 

Let’s see on the next episode. 

Stephen Semple: 

… On that note, thanks, David. 

Dave Young: 

Thank you. Thanks for listening to the podcast. Please share us,. Subscribe on your favorite podcast app and leave us a big fat juicy five star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute Empire Building session, you can do it at empirebuildingprogram.com.