How Rolex Sells Watches by Creating Problems
I was 16 years old when my dad came home from New York with a gift. He opened his bag. “I thought you needed a new watch”, he said and handed me this gorgeous silver and gold watch.
“Woah, this is a Rolex,” I was surprised. At 16, the only thing I really knew about Rolex was that they were expensive. How expensive? I had no idea, but I probably shouldn’t be wearing this to my job at the grocery store where I pushed carts and stocked shelves.
He just kind of laughed. My mom laughed too. “It’s not real,” he said.
“What do you mean, it’s not real?” I asked. Still, I had no idea what was going on. Well, he didn’t get me a Rolex. As my friend Brendan put it, he got me a Fauxlex. Yep, a fake Rolex. It looked real to me, but I was pretty clueless. I’d never seen the real thing. Now, I’m almost 40 and I’ve still only seen a few real Rolex’s. At least, I think they were real.
I really didn’t care that it was fake. I thought it would be impressive if I could pull one over on someone. I wore it to school. I wore it to work. I didn’t really fool anyone. It clashed with my hoodies, Led Zeppelin tee shirts, and my giant green Doc Martens. Since it wasn’t fooling anyone, I leaned into the joke. I wore that Fauxlex everywhere until it finally met its demise falling 3 feet onto the concrete when I was banging on the glass at a minor league hockey game. It never really worked ever again.
Even at 16, I knew one thing about the Rolex brand. It’s what Rolex has built their brand on for over 100 years. A Rolex was a sign that you had “arrived”. You wore a Rolex because you could wear a Rolex. I knew that even at a time when a watch was more necessary than it is today, that the Rolex brand didn’t really fit much of a practical need. My Folex told time just as well until it broke. So how had they made such an aspirational association with a clueless 16-year-old when I wasn’t their target audience?
Rolex Creates Problems
Problems. As marketers, we’re pretty good at creating them. It’s a technique known as poisoning the well. The strategy is thousands of years old. You essentially tell someone their well is poisoned and that you are the only one that has the antidote. In high-effort consumer behavior, problem recognition is the first step in the purchasing journey. However, some products that involve high-effort behavior do not necessarily involve a practical problem, so problems have to be created. The way marketers typically create problems is by telling you that what you have is not enough. They then make a promise that what they are selling will make you fill in the blank: (happier, healthier, thinner, more successful, etc.)
So, how does Rolex do this? Does anyone need a Rolex? For that matter, does anyone ever really need a watch? Seriously though, there are ways to tell time all around us. We have clocks on our phones, tablets, in our car, just about everywhere. So how does a company like Rolex still exist? Does anyone need an archaic, analog device, that costs $7,500 for the “base” model? Although they have built a strong brand for over 100 years, how does a product thrive to be a $5 billion-dollar company when by all accounts, it should be on its way to obsolescence? Rolex has done what every high-effort consumer behavior expert dreams of doing. In my opinion, they nailed step one of creating problems.
One of their messaging strategies involves the same tactics any motivational speaker uses to get you to buy their products. It’s the “dress for the job you want, not the job you have” method. This strategy is on full display in their “Every Rolex Tells a Story” campaign where they feature people that have “made it”. Check out this ad with James Cameron.
So what did they do here? Again, it’s the “dress for the job you want” tactic. Wow, James Cameron. Who doesn’t want that kind of success? Since he’s doing an ad for Rolex, the watch must have somehow contributed to his success, right? They’re planting the seed that James Cameron and everyone else that is part of this campaign can attribute their success to Rolex. The beauty of what they are doing is that they are communicating that message (associating success with Rolex) without overtly saying this. If you hadn’t thought of what they were doing with this type of ad, would you be able to recognize this tactic? Maybe, but Rolex isn’t relying on their advertising appealing to logic. They’re relying on their advertising to appeal to emotion.
They do a fantastic job of convincing affluent consumers that if they don’t have a Rolex, they haven’t arrived. This strategy has been so successful that the basic concept of their messaging has never really changed. Rolex spends big money advertising in high-net-worth sporting events, publications, and websites. The way they advertise relies heavily on indirect normative influences. They realize that the person that is purchasing the Rolex is heavily influenced by the group of people they associate with. It’s the whole “if your friend jumped off a bridge, would you?” lecture that your mom gave you when you would blame your behavior on your friends. It’s not an uncommon strategy. For example, many companies do this with an overarching message of sustainability. Toyota does this with Prius. Burt’s Bees does this with everything they sell. Rolex just has a much smaller niche, and in my opinion, they do it better than anyone else.
High-effort consumer behavior, like the decision to buy a $7,500 watch, relies on problems. Sometimes, though, your problem involves a legitimate need. You need a car for transportation, your computer quit working and you need to finish your work, or your phone battery won’t hold a charge anymore and it can’t be used for more than an hour off of the charger. Although the way that you arrive at the problem when there is a legitimate unmet need is different than a manufactured problem, the way you buy things is the same. Rolex is just amazing at creating perceived problems that only they can solve. It doesn’t really matter if the problem is real or not.
Consumers are Lazy
Once a problem is realized, the second step of a high-effort behavior is to look for information on how to solve your problem. This type of search could really be anything. It could be internal, like remembering past experiences or ads. It could be external, like getting a referral from a friend or researching alternatives online.
You might think that we put in a lot of effort into making a major purchase but that’s not really the case. There’s a term in cognitive psychology called the “Cognitive Miser”. Our minds are considered to be cognitive misers. This essentially means that when we make decisions, we’re sort of lazy, regardless of our intelligence. In general, we would much rather put in little effort to solve our problems than putting in extra effort and meaning. (Stanovich, 2009)[1]
This can’t really be true, can it? Yep. It’s true. What’s one of your biggest monthly bills? I’m guessing you said mortgage, well, either that or daycare. You would think that we do a considerable amount of research when finding a home lender, right? Nope. Definitely not. Our brains want to take the easy way out and find a solution that is good enough. One major study found that the average number of sources the consumer consulted when selecting a place that was likely going to determine the amount of their largest monthly expense…was two. (Lee & Hogarth 2000)[2] Yep, two. Let that sink in.
This can’t really be true, can it? Yep. It’s true. What’s one of your biggest monthly bills? I’m guessing you said mortgage, well, either that or daycare. You would think that we do a considerable amount of research when finding a home lender, right? Nope. Definitely not. Our brains want to take the easy way out and find a solution that is good enough. One major study found that the average number of sources the consumer consulted when selecting a place that was likely going to determine the amount of their largest monthly expense…was two. (Lee & Hogarth 2000)[2] Yep, two. Let that sink in.
How Can You Use This Information?
Alright, let’s say you’re a marketer and your potential customer realizes there is a problem, whether you created the problem or not. The next step is to be able to nail the information search portion of the high-effort consumer behavior journey. Now you know the secret that all good marketers know. If consumers only check out two sources before they make a purchase, and one of those sources is yours, you’re pretty much halfway there. So, the question is, how are you going to provide this information? Is it going to be through video? An informative blog, or series of blogs? Email to a customer curated list? Social media? Old-fashioned snail mail?
For a well-defined niche market, I usually take an omnichannel approach. This is a just fancy way of saying all of the above. Why? It doesn’t take an in-depth analysis of consumer behavior to understand that people are all different. While some prefer reading in-depth articles, others will skim just for the key points and takeaways. Some need the information delivered directly to their email, some want it sent to their desk, some want to watch an informative video, and some would prefer the interaction and community found on social media. This has been especially effective when you are dealing with a niche market because regardless of the medium, you are not dealing with massive media budgets. The types of markets I work with max out around 5,000 target consumers. I often work with targets of 500 or less. That takes a pretty targeted media approach, one where you can cover just about every type of communication for a pretty reasonable budget.
Can You Combine the Two?
Realizing that consumers are lazy, Rolex has done an excellent job in combining both step one and step two. Their advertisements create problems but they offer solutions. The solution, conveniently, is to buy their watches. One clever headline reads: “A Rolex will never change the world. We leave that to the people that wear them.” As a consumer, this plays to my ego and I just realized that I have a problem. I want to change the world, but I’m not changing the world. Bingo, step one of high-effort consumer behavior, check! How about step two? Well, they just told you. People that change the world wear Rolexes. Are we that gullible? Maybe. Maybe not. Are we that lazy? See Cognitive Miser theory.
What’s Next?
Once we realize there is a problem and consume information on how to solve that problem, we reduce our alternatives down to a few. This is typically 2-8 alternatives, which we often call the consideration set[3] (Allen et al., 1991). However, if you’ve already built your brand to be a frontrunner like Rolex, if you get to this stage, you’re going to have a higher probability to make the sale.
The final steps involved in a high-effort purchase are the actual purchase and post-purchase behavior. The interesting thing about the post-purchase behavior of Rolex customers is that the product is so coveted that the owner will always want it to be seen or noticed. By wearing a Rolex, they’re walking advertisements for the brand. Given the price point of the watch, it is highly likely that the person wearing it is monetarily successful. This perpetuates everything that the brand stands for.
Takeaways
For high-effort behavior, the first step in the customer journey is to get someone to realize there is a problem. Once that problem has been recognized, a consumer tries to find a way to solve that problem. Then, they narrow their choices and buy a product. How can you help them along the way? If you can do this as well as Rolex, you can roll the first two or three steps into one, giving you a greater likelihood of being chosen over your competition.
[1] Stanovich, Keith E. (2009). “The cognitive miser: ways to avoid thinking”. What intelligence tests miss: the psychology of rational thought. New Haven: Yale University Press. pp. 70–85. ISBN 9780300123852. OCLC 216936066.
[2] Lee, Jinkook & Hogarth, Jeanne M. Consumer Information Search for Home Mortgages: Who, What, How Much and What Else? Autumn 2000 Financial Services Review, Volume 9, Issue 3. Pp. 277-293.
[3] Shocker, Allan, Ben-Akiva, Moshe, Boccara, Bruno and Nedungadi, Prakash. 1991. Consideration Set Influences on Consumer Decision-Making and Choice: Issues, Models, and Suggestions. Marketing Letters: A Journal of Research in Marketing, Vol. 2, No. 3: 181-197.