Psst…wanna buy a watch!?


Firstly, let’s play “spot the difference”

Rolex GMT Master II             Rolex GMT Master II

What…you didn’t spot it!?

So you aren’t an expert but, maybe, you would know if you could hold them or conduct a more detailed examination.

OK so these quality timepieces (Rolex Oyster Perpetual GMT-Master II) are exactly the same but you wouldn’t necessarily have known that until I told you. Even then, you only have my word for it. Either or both could be fakes.

If you are in the market for a Rolex watch and someone you know offers to sell you one at a heavily discounted price you would probably be interested.

If a stranger offered you a similar deal you may still be interested but you are, naturally, going to be wary of “ripped off”.

If the saving is too great your suspicions will, understandably, be aroused and you may assume that the watch is fake. You will almost certainly seek to verify the provenance.

SELL ON PRICE: There are plenty of people ready to sell you a cheap Rolex replica. It will tell you the time, look the part and may even offer a high degree of reliability but you know that it isn’t the real thing even if you don’t chose to share that information with others. When it fails, which maybe 2 weeks or 10 years down the line, you will probably throw it away or let it languish in a drawer as a memento of a Spanish holiday. Alternatively, you could brandish it as testament to your character in an attempt to establish whether it can be repaired or if is worth the repair cost.

BUY ON VALUE: If you want the real thing you will deal with a reputable retailer, seek a recommendation from a friend or other reliable source and when it comes to price you will conduct a little research. You may even indulge in some negotiation. Ultimately if you satisfy yourself that you are making a sound purchase you will have taken comfort from the fact that, in the event of a problem, you have a warranty or guarantee. Perhaps, even, a new connection with the vendor as your means of ensuring some after sales service.

So, you may be asking yourself, what was the point of all that then? Presumably this is where he (me!) will steer it back to his pet topics i.e. insurance, transparency, value, sustainability! Of course it is…

This is about PRICE v VALUE but also about TRANSPARENCY

The watches don’t make themselves nor are their component parts found, fully formed or in breeding pairs freely roaming around a factory or watchmakers workshop. The raw materials have got to come from somewhere, be fashioned, assembled, tested, packaged and distributed. To do all of this and return a worthwhile profit requires considerable scale, organisation and resource.

The global counterfeit market has enjoyed boom times as brands spent billions on extravagant advertising campaigns and clever product placement. But if brands wanted to get us to spend our hard earned cash or “unlimited credit” on the latest “must haves” then that was the price they had to pay. The counterfeit operations just have to stay one step ahead of the law to add to their own personal wealth.

But this is not about how counterfeiters go about making their money or the merits, trials or tribulations of quality brands. Here is THE question

Which would you choose if your main concern was to get value for your money and you knew the full facts?

Counterfeit

Retailer

A

Retailer

B

Figures are purely for illustration purposes Rolex GMT Master II Rolex GMT Master II Rolex GMT Master II

Cost (£)

50

5,000

5,000

Residual value

NIL

5,000

5,000

Margin

85%

50%

25%

If you are happy with a £50 price tag then it’s an “easy” choice. But why not buy something that provides you with VALUE? That is, it does the job, gives you some guarantee re reliability, may have some residual value and doesn’t pretend to be something it is not.

NOW, which retailer? Here are a few background facts to help you weigh up your decision:

Retailer A

Spends 3 times more than B on marketing and High Street locations. Stretch targets and sales staff commission provide “focus”. Spends half as much as B on customer service (after sales). Enjoys a margin twice that of B. Repairs (only undertaken under guarantee) are outsourced. Customer loyalty rated at 70% based upon customer satisfaction feedback and repeat business. High staff turnover.

Retailer B

Spends twice as much as A on customer service, share company goals and values with employees. Reward employees according to overall company performance and contribution. Spends the same amount on creating “product specialists” (for repair facilities) across the company as A spends training salespersons only. Customer loyalty is consistently rated at over 90% and staff retention is high. 

Well the only way you are going to know whether you have obtained “value for money” is if each retailer is able and prepared to tell you all the background information you need to make a judgement! And let’s face it, the chances of that happening in modern business are pretty slim. Why, because customers aren’t interested to know? WRONG.

In reality neither retailer really wants you to know intimate details about their business and there will almost always be a pricing differential (10 – 20%). The truth of the matter is that Retailer B can benefit greatly from embracing TRANSPARENCY. Recent research indicates that customers are willing to pay more where they can identify with the company values.

Retailer A would, likely, see only negatives from transparency and is therefore left to consider how to “compete”. Price-cutting and/or increased marketing activity will maintain short term results but may place unbearable pressure upon a highly geared business model. Of course they could continue “as is” and hope that price remains as a key driver. But this denies the changes to customer buying patterns being reflected in current marketing and on-line strategies.

One organisation has the foundation for a credible, stable and sustainable strategy. The other an ongoing battle to defend their current model and to continue to deliver the necessary level of financial returns.

Of course this isn’t really about buying a watch, Rolex or otherwise. It is about the scenario facing many businesses in these difficult but changing times. Those who maintain their focus upon doing a good job well for their customers can really seize this opportunity, not just, to make up ground on some of their competitors whose stock has risen over the last few years, but to expose them as employing a similar philosophy as those whose (individual and collective) greed created a FALSE ECONOMY that has been so spectacularly exposed…at considerable cost to its victims!

I want to talk to Scottish insurance brokers, professionals and businesses about how we capitalise upon the opportunities that this recession has presented us. I am not short on ideas in this regard and have already mapped out the strategy, operational structure, architecture, tools, services, products and networks to make TRANSPARENCY a very effective and profitable tool.

Gimme a call: 07919 917150

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