MikeFranceMike France, co-founder of Christopher Ward Watches
Watches generate a huge amount of passion among aficionados and topping the desire stakes for many right now are the gorgeously crafted items from the British watchmaker Christopher Ward.
The Maidenhead-based company estimate that their customers each buy 1.4 watches every year, owning on average seven models with one particularly besotted fan having recently collected his 100th Christopher Ward watch!
So SI went to find out how a sales strategy gave wings to this passion, which leads one of the UK best sales stories.
Sat in the uber-chic retro ‘showroom’ upholstered in the oh-so-fashionable reprise of G-Plan furniture, Mike France outlined his path into a young start-up business after his high-powered role as CEO at The Early Learning Centre.
France took up the story: “The background to this business forming in the first place goes back to when I had just sold the Early Learning Centre with Peter Ellis; and Chris I had known from way back. But after a month I was bored!
“We had, with Early Learning, developed a very large online business and the view was that, while bricks would still be around, the future for growth was unlikely to be ‘bricks retailing’ so I wanted to formulate a view what it was we wanted to sell online.
“After a process of analysis, including the need to be global or relatively high value, it led us to look at jewellery or watches and, as a pretty big fan of watches, I chose the latter.
“I didn’t know anything specifically about watch manufacturing but, with a bit of luck, we knew people who were able to open doors for us as heads of very large brands. Then the second piece of luck came with our observation that the margins the large luxury watch brands used were almost, to our minds, immoral; the highest mark-up from cost price we discovered was 37 times and the average being between 10 and 15 times.”
It was here that he saw a gap in the market could exist for a lean manufacturing organisation to exploit.
France explained: “The difference being was the amount of marketing money these companies were throwing at their products, including celebrities. Nearly all these brands use a watch model, which is a wholesale model, so you have already a situation where the price doubles because you go into a retailer for sales.
“We thought the gap in the market existed for a challenger brand to go into the market focused on luxury, that is going to replicate the quality of the top brands like Tag-Heuer, Breitling, Longines and Rolex, etc. How do we do this? We chose online so we don’t have a wholesale model and we’ll be a vertical operation – we will keep our overheads low and online is particularly helpful for that because you don’t have the capital requirement.
“But how do you drive people to that site? The first idea was to use off-the-page advertising. We took pages out in newspapers like The Independent and The Daily Telegraph, which were advertising a single watch with its details - almost like a mail-order advert. We got some sales from that but it turned out that wasn’t the model we ended up going with. The reason being that it wasn’t generating enough.”
Yet, just as things could have become a bit sticky for the fledgling luxury brand, Lady Luck smiled once more on the project.
France said: “Then the third piece of luck occurred for us in our business and created, in essence, the template we use now.
“In the first Christmas of our existence the sales really started ticking up and we had no idea why! It wasn’t the newspaper adverts because they all had codes and were UK based yet we started getting sales from all over the world; randomly from Japan, the States, Holland, Russia – we asked why would they know a brand that has only been going four months?
“Then post-Christmas we received a phone call from a guy called Hàns van Hoogstraten who asked us if we like to set up an independent online forum all around Christopher Ward watches? The reason he wanted to do it was that he had been a member of the world’s largest watch forum called Time Zone, which is based in the States but has hundreds of thousands of members with millions of posts per annum.
“There was another chap from Australia called Dave Malone and he had seen one of our adverts and had seen what exactly the watch was supposed to include, with its movement and quality, and he bought one. We sent this to him not knowing that his intention was to expose us as frauds thinking that we can’t possibly be selling a watch of this quality for the price!
“Then, after dissecting the watch, he was astonished and posted a most amazing post on Time Zone. This then, over that Christmas period, raised more discussion on Christopher Ward watches during December than on Rolex! That led to Michael Sandler, moderator of the forum, to start to query posts by customers who were posting about us as he thought we had paid them to do so. So he started banning them. Hàns, who had been a sturdy member of the forum but had bought one of our watches on Malone’s recommendation, was so infuriated by being banned that he wanted to start our forum.”
Yet, France knew that, to ensure credibility among the watch intelligentsia, it was vital for the company to have no editorial or commercial control over the forum.
“We insisted it had to be completely independent with no editorial control at all from us and, if you are willing to do that, it’s fine,” France said. “Today that forum has many thousands of members posting hundreds of thousands of posts each year and, in itself, counts for 10-15% of the traffic flow to our site and 15- 20% of our total sales.
“In some respects, it was more important than even that. Because, back in 2004/5, it alerted us to the huge subterranean world, that these days is accepted as the norm, that one post can have a huge impact on our sales and even getting people signing up to our brand with no payment from us. So we needed to investigate.”
France said this was one of the special challenges he had to face and get to grips with, all of which seemed worlds away from his previous corporate business experience.
He explained: “When you come and set up a small business it’s not like running a large retail organisation as I used to do. You can’t make a decision with a board of ten people and then get someone else to do the mechanics of it while the CEO gets on with something else. When it’s a start-up you have to get involved in everything. In the new world of the internet this was a whole new area for me and when we started to investigate further, we discovered that watches, rather like cameras and cars, attract a disproportionate interest from people who are deeply involved in these products.
“There are possibly thousands of forums around the world devoted exclusively to watches so we moved away from traditional, simple, methods of attracting customers to really working out how we might generate appropriate people migrating to our site by better understanding the world that was emerging on the internet.
“We set up with Affiliate Window, one of the largest affiliate networks in the UK in 2005 and this was hugely interesting and, while we made a few mistakes in the past, we are at a position where we give no commission, no discounts, no benefits and yet it drives huge interest because we give good and interesting content.
“Many people view affiliates as a route for a quick fix with discounts and vouchers but we have become one of the top merchants in our segments, never out of the top five, and there are hundreds of merchants there. That has introduced us to many new people. We have relationships with bloggers and forums all over the world so our network is very large and that drives a huge amount of custom. That’s because if people are interested enough to be on watch forum and blogger sites, guess what, they’re more likely to be ready to buy!”
Just as most thinkers know that we learn more from failure than success, France and his team were to discover that mistakes did not have to be terminal.
He said: “Another example of early mistakes turning round to find a better method included us thinking that, maybe, cold mailings of our catalogues would work. What we found, however, was that for this type of product and price point, which is quite high despite being fantastic value for money, the target market of predominantly professional males do not respond to the mail order market. This market is primarily driven by women and by repeat item purchase. The expensive watch model does not fit that bill.
“However, in this country it’s lucrative to do about 100,000 cold mailings a year but beyond that you cannot make them profitable. But, from that, what we did learn was that we had a growing audience of owners of our watches and our owners buy about 1.4 watches per year on average owning a total of five to seven watches. Our No 1 fan has just bought his 100th Christopher Ward watch and we make sure we look after him! “So, in order to keep a relationship with a person you may only touch once a year or irregularly for a special occasion, you need to have some on-going dialogue and the website isn’t the only way to do this.”
It’s here that the online organisation had to turn to some good old-school technology – the printed word. France explained: “We decided to start our own magazine which published its tenth edition in September. We do two a year and plan for three next year and this has proved to be unbelievably successful on two counts. We send it out to owners and people who request it and have found that we get more sales as a direct result of this magazine than we ever had with the catalogues.
“It also becomes a brochure that people ‘seed’ to other like- minded people, which brings us new customers too. It’s a great sales tool because it keeps customers in touch with a brand that normally, on a regular basis, that they wouldn’t need to keep in touch with. It’s a lifestyle magazine with several general interest stories but with references to what we are, and will be, doing.
“We go into depth on two or three major new launches such as, this season, we’ve run a big piece on the C900 World Timer which is going to be a world-first watch for us. There’s also a piece on a watch inspired by the RAF’s Typhoon jet and also a third where we’ve been fortunate in finding a chap who has a piece of the 1959 Aston Martin DBR1-2 that was winner of the Le Mans race. We have a panel, from which we are taking out medallions and inserting them into the back-plate of a special watch to commemorate the achievement.”
France also discovered a special niche was available for grabbing space to advertise the company’s offering in other magazines without having to spend bi-ticket advertising rates.
He said: “While we also take out space in magazines we have a very non-traditional model in that we only take late space, acknowledged by many in the industry as the most professional turnaround people. I’ll make a decision in a minute and the publishers will have copy in minute three, if that is what is required. The quid pro quo is that we expect a very good price!
“That’s working well for us and we pitch at luxury or inflight magazines and car manufacturer magazines. All that is driven by the product and the narrative we create around it.”
Thanks to the small size of the company, France and his co-founders are able to exploit their own knowledge and passions to build up the story line, which helps to enthuse customers and generate sales.
“It’s much about our own passions,” France explained. “I’m very interested in cars as an Aston Martin owner and that’s why the DBR1 is very important to us. But in trawling through one’s brain and one’s interests you find a story that is really interesting to you and one that will interest other watch enthusiasts. Some work and some don’t – we’re struggling with an interpretation for the Jaguar D-Type, which has been on our design boards for two and a half years and I’m still not satisfied.
“On the other hand, the Typhoon watch – why the Typhoon? Half of my family have been flying jets in the RAF and my brother-in-law was the chief training officer for the Typhoon and, perhaps because of that, we had some special insights into the aircraft.
“If you have a narrative around a product, whether provenance or the story of the design, we find that watches lend themselves particularly well to this. If the narrative is strong, and you’ve interpreted it well, that spawns language that goes out through magazines, through websites, blogs, PR activity and if the story grabs people it works. Increasingly people expect a narrative from us and want to see the reason behind it.
“Product on its own has to be fantastic but these days in retailing, you have to have a strong narrative and if the narrative of the organisation is equally as strong underneath it and there are principles around provenance and there are principles around customer service, the story will be a good one.”
France realises that the Christopher Ward brand has a market place far removed from some of the big-hitters of the watch world but that can just be a strength rather than a weakness for a young organisation.
He said: “We would never profess that we could out-Rolex Rolex. These guys are amazing, investing billions into R&D and all the rest of it. That trickles down so most of the brands get the benefits of their R&D.
“Where we can say we are the equivalent to are the likes of Longines, Tag-Heuer but not Patek Phillipe. We will never be the best watches money can buy but what we can offer is the best customer service in the world, which is par excellence!
“From the inception of the brand, we knew we could have very high quality watches at really great value prices but the third leg of the stool is that we can have absolutely world class customer service and this gives us a chance at true stand-out quality.
“Genuinely, everyone who works in our business is empowered to do whatever it is that is needed to sort out a problem for a customer. And that’s why we have such a good reputation around all the watch forums, which is impressive for a little challenger brand like ours.
“We are spending a tiny fraction of what the big groups are spending on marketing but if it’s online and in magazines that the word of mouth is positive, it’s worth a great deal.
“Life is about storytelling, it seems to me. We all want to tell each other stories, and we like reading stories. Businesses should also be telling stories every time you walk onto the shop floor. Whatever the brand is about is a story and you need to theatre it with story telling.
“We have a strong and powerful story here. We’ve started telling that story and it has reached a few more people now and that’s what we are focused on. For the moment we have discovered vehicles which allow that story to be told cheaper and on a profitable basis that’s sustainable.”
But, as with most aspiring young companies, France sees growth potential for the brand and is already working on sales strategies to make an assault on the lucrative US market.
He said: “The next area of geography is the US which accounts for about 18% of our business. The story we haven’t spent anytime on marketing in the States at all. Now we are in a position to actively start ‘seeding’ the US and I’d be very surprised if, in three years, the US is not bigger than the UK for us.
“We will use blogs, forums and the advertising model we have been using and after that we focus on the BRIC nations. At the moment the US is still the largest watch market with 32% of the luxury market, the BRICs have 28% - of which China has 14% - but this is growing at such a rate that it is expected to overtake the US in about five years time.”
To find out more about the Christopher Ward range of watches, click here