Transcript for:
Insights on Rolex Marketing and Scarcity

This is me going in store to try and buy a Rolex. That one is off catalog. What does that mean? It's not like on the website like you see the menu. So, can I order one? Um, Rolex made 1.2 million watches last year, but apparently they have no watches for sale. No chance I can get no watches at all for sale. Everything is This is just one of the sneaky strategies they use to do over 10 billion per year in sales. I'll be traveling the world to test this tactic and other dark psychological tricks that Rolex uses to brainwash the masses into wanting their products and diving even deeper inside the underground Rolex market to see if I can actually get my hands on one. You have got some serious watches in here. But before we step inside, I made this Tik Tok and Rolex had the audacity to send me this cease and desist. Rolex do not want me making this video. But nothing can stop the internet daddy because I am here boots on the ground to go and get the source for you, my people. Let's head inside. Entering the store, I'm immediately confronted by security who redirects me to a Rolex gatekeeper. And I tell them the watch I'm looking for, the smoked ombre day date. I've been trying to secure the smoked ombre for over a year, and I'm sick and tired of playing Rolex's game. So, I have decided to personally hunt one down once and for all. But instead, they bring out four random watches. All of which they said I can't buy. What about if they want this smoked ombre? How do you recommend to get that? The story. There's no way to work. No way. This should be in the waiting list. But now this is closely focus. And this weight list is the first of the psychological tactics that Rolex uses. After interrogating the time lords at Rolex, they finally cracked and said that I might have a better chance of finding my watch at a place they called the gray market. Gray market. So that's not through a boutique, is it? But more on that later. If you go to any store around the world looking to buy a Rolex, they will say the same thing. How do I know? Well, for the last 12 months, I have literally traveled the world, visiting boutiques on all these different continents and asking the same question and was always left with the same answer. The time frame is there's no way to tell. I only have exibition today. No watches at all or for sale. Everything is exhibition. They all said they have no watches for sale. You just can't go into a store and just buy it. It makes you want it more. And then when you see a Rolex on somebody's wrist, you even value it more because you know that you can't actually even go in there and buy one even if you want to. This is completely artificially created scarcity. They have the ability to, of course, go out there and make more than 1.2 million watches. I've been on the wait list for this watch for over 4 and 1/2 years, but this time I really don't feel like waiting. So, I'm going to do whatever it takes to get this watch on my wrist, hopefully avoiding more legal battles from the Rolex overlords along the way. So, how can you use this tactic for your own business? Well, by definition, all businesses have a supply and they have demand. You want to get clear on what your capacity is. And then you want to articulate that. You want to advertise it. You want to let the market know of what that capacity looks like. So, if you're in a service-based business, there's a chance that you can't handle unlimited clients. That in itself creates desire. Where if you are serious about doing business with this business and they can only deal with 12 new clients a month, you're going to feel like there's scarcity there. And just by communicating that inherently creates value. You want to use your product page to advertise that scarcity. If you have limited supply, make sure that is well known on the product page. When hotels started using just the notification of like 15 people have just made this booking, just that notification of letting people know that increases conversion rates by 10%. No luck so far on the smoked ombre. But we're on our way to test the next tactic and something is telling me my luck's about to change. But then all of a sudden, I'm immediately recognized by the security guard at the door. I still want to be for sure. Not great. This is the same video that got me blacklisted from Rolex boutiques. I approached the counter anyway and asked if they had my watch. How could I get this? You don't have this right now. I'm considering we don't have any idea about this. But before I can get them to use their next sneaky tactic on me. Security catch on to what we're doing and then they approach my undercover cameraman. Before things escalate any further, we decide to dip. Do you feel a hit? Yeah. That's the last thing that you want is the security guard to be a fan of your work. So, it turns out that finding this watch might be straight up impossible. This next tactic is the strategic product ladder. So, it's not enough for Rolex to just refuse to sell you. They have a beautifully designed product ladder where the only way to buy a model like the Day Date is to first buy their entrylevel offers. So, they start you with a stainless steel submarine at $9,200. And then there's the Day Date in 18 karat gold, which is around the $38,000 mark, and they graduate you all the way to the platinum ones that are embezzled with diamonds and emeralds that go all the way up to a million. A business owner gets a customer to make a sale, whereas a business builder gets a customer to start a relationship. You want to have a very fat and juicy lifetime value of a client. And the only way to have a big lifetime value is to have multiple products and services that you can sell to your customers along that journey. And one thing that is clear with luxury brands is the first thing that they ask you when you walk into their store is, "Do you have a profile with us? Are you a part of our family?" They want to know if you've ever bought something in the past because they have a very deep customer relationship management system and they're all about nurturing their clients to continue to buy with them into perpetuity. They're going to have new seasons, new products, new styles and that's where they really shine. It's how they market to their existing customers. So the way that you can deploy this tactic in your business is to develop a backend offer. And this is where all the money is made. It's all made in the back end. Typically, you would have already liquidated all of the operating costs and the traffic cost and the advertising cost to actually acquire that customer. So, any sale that you make after the first one is pure profit. You don't have that huge expense of customer acquisition to cover. It's already been done. Then what you want to be doing is thinking about what are the other additional products and service that I can sell to this customer. And these aren't things that you advertise on the front end. That's where most businesses get it wrong. You need to have them as hidden menu items that is not publicly advertised. That when a client hits a certain threshold or they hit a certain milestone within your business, then you do tell them, hey, we've got this other thing that would be absolutely perfect for you. And that is precisely what Rolex does. I experienced this firsthand when I asked them about a specific model and they said this. Why is like off catalog? What does that mean? It's not like the website. That's like hidden menu. Hidden menu. They have a almost mystical secret off catalog items that you can't see on their website. They don't showcase them anywhere in their store. You can't find out about these things unless you already own a very expensive Rolex. And this is where we heard firsthand from one of their reps in store. I was questioning her of like, how many watches do I need in order to see these off catalog watches? How do we get items off the hidden menu? You have to be like with a big client. How many watches would classify me to be a very big client? Around 1 million in total revenue. Yeah. And these off-c catalog watches, they are sought after by the biggest watch enthusiasts in the world because just like Drake's ridiculous 140 plus collection of Rolexes, there are a lot of off catalog watches on there and they're rare and it adds to someone's whole collection. If you know that you're a VIP, you get items off their secret menu or their off catalog. That makes you feel special. It makes you feel seen. Then when you buy things off their secret menu, it unlocks other benefits like being invited to certain events like the tennis or even private factory tours in Switzerland. It's building loyalty amongst their best customers. After having no luck in a dozen boutiques, I have decided to jump on a plane and visit one of the biggest Rolex markets in the world to see if I could get my hands on the elusive smoked ombre. But then something weird happens. I tell the Rolex overlords that I have traveled over 12,000 km to get one on my wrist. And suddenly he tells me this. You don't have that available. We currently don't want to have to register for a piece like that. This time they invited me into their private back room. And what they showed me wasn't even on their website. Oh, that's similar, but that's in a green. And that's got the diamond dials. I flashed my day day to see that will get me any brownie points. It's a beautiful piece you have. Thank you. Yeah, it took me a while to get that. I was on the wait list. I think this model's quite popular, right? Love that. It's one of my favorite models that we've ever released to be honest with you. Wow, that's nice, too. Once he realized that Funnled Puppy already had a rolly on his wrist, he offers me some sparkling water and asked if I'd like a complimentary watch clean. Please. Boom. This is the kind of service that I've been looking for. But here's the thing. This wasn't customer service. This was a test and I passed. As I'm waiting, I notice books, antiques, and magazines around the room that detail the rich history and origins of Rolex. And this is all by design. The idea came in 1900, registered in 1908. First watch came in 1926. Wow. This next strategy that Rolex deploys is incredibly powerful, and that is storyelling. People don't go out there and spend 70, 100, 200, $500,000 on a watch without a good story behind it. And Rolex is an absolute master of this. This watch, which is the day date, is referred to as the president. More presidents wore these things than any other watch. And then they use that angle to really position this watch for executives that need to make hard decisions all the time. And that have the weight of the world on their shoulders. And they tell a beautiful story about what this time piece actually means. They talk about their heritage, where they got started, how long they've been in business. The most powerful thing about a story is you can't argue with it. It is an invisible thing that influences you that you just think about and it ingrains in you that you then regurgitate to other people and you tell other people about these brand stories. And that's what a brand is. A brand is what people say about your product or service when you're not around. Just by you knowing their history, you start to associate quality with that. that they've been creating this product for so long that they must be absolute masters in it. They must really know what they're doing. So, a way that you can deploy this for your own business is just to think about your origin story, how you got into this business in the first place and everything that you've had to do to get your business to the point where it is right now. And just simply communicating that it gets people bought in to what it is that you've got. For me, my origin story was I, just like my customer, started my business from a rented bedroom with no more than $50 and an old computer that my girlfriend bought me. And I had to make 150 cold calls every single day to get my first few clients. You want to get people moved and bought into your story because often times your prospect is where you were when you started your business, when you first started creating this product or this service, and you're saying, "Hey, I can empathize with where you're at right now." And that's the reason that I created this business in the first place. After leading me on with their complimentary watch cleaning, they decided to break my heart all over again. What's the likelihood of me getting this? It's definitely it's it's a possible experience. It just I don't know. After all that, I still walked out empty-handed. So, I decided to switch up my strategy. I remember something that one of the Rolex overlords let slip earlier. Is there any way you can recommend me to try and source this place? Sometimes people try to source this watch from the the gray market. the gray market. So that's not through a boutique, is it? Did I buy from a gray market? Do you guys still provide warranty? We don't deal with the gray market in January with 5 years in the restaurant. But for us, we don't take what they wish. If you come here, just ask me like it's worth travel. We love to find those information. Well, so the chances are I buy it from the gray market. It may not be original. It sounds risky, but I'm running out of options. So I call up a contact who says that he can get me into the gray market. The only catch, he can be hard to get a hold of. It's not picking up. This is my last hope to find the majestic beauty that is the smoked ombre. If this falls through, then it has all been for nothing. All righty. The next strategy is Rolex famous green boxes, almost as iconic as the watch themselves. And this is a strategy that Rolex fully intentionally deploy. They know that they can surprise and delight their customers long after the initial purchase is done. These things get sold on the secondhand market on eBay. People are buying these things for $300 just as a status symbol of what it reflects. So why is this strategy so brilliant? Well, 40% of subscription services, those clients and customers make the decision to cancel in the first 90 days. And so a way that you can game that is by making sure that the whole onboarding and unboxing experience is an extension of your brand. and it surprises and delights your customers. Just the way that you handle how you onboard somebody that sets the tone and the expectation. And if that is a positive one, then that decision of whether or not to renew is made in those first 90 days. So, how can you use this specifically for your business? Well, in my agency, this is something that we send out, which is a welcome hamper kit. And yes, this is a strategy that I stole from luxury brands and it works exceptionally. So, the things that you really want to be considering is is what are the materials, the textures, and the brand colors that it is that you're representing. If you send a shitty cheap box, that is what people are going to associate with the brand. The other thing that I really like to do is to write a letter from the founder of the business to that customer, telling them a little bit about why you started your business, where you started, what that origin story looks like, and why that is important in terms of the experience that you're going to provide to them, your client. After seven unanswered calls, my contact is still MIA. But your boy doesn't give up that easily. the actual [ __ ] Your call has been forwarded. We are headed over to a gray market seller. Apparently, he's got the Rolexes that we that we're specifically looking for, but he's not picking up our calls now. So, we'll wait around for a little bit and head over and see if we can find anything. See if we can first if we can find his store and then if he's there and if he's willing to have a chat to us. This next strategy is a very sneaky one, but it's incredibly powerful. While Rolex of course has official brand ambassadors like Roger Federer and Tiger Woods that they do partnerships with and are constantly promoting a bunch of their advertising, everybody knows that they are paid ads, right? And that they are paid actors to be a part of an endorsement of their brand. The thing that's really sneaky that Rolex does, they have deals with certain celebrities that are completely unofficial. They simply gift them watches and it's kind of they know what's expected of them that they will post it and they will promote the brand. If you look at the Kardashians, right, every single one of the Kardashians wears a Rolex. They actually gave the whole cast of their television show, they gifted them all Rolexes. That is not by accident. Also, Drake has 143 Rolexes in his collection. Do you really think that Homeboy bought them all? Hell no. Right. These are products that are gifted. They don't say, "Yo, you got to wear these in your television show or on your film clips or anything like that." It is of course expected that that's what's going to happen and they know that the more that they do that, the more watches that they're going to be given. While it's not officially documented, Rolex has been known to do this even from the '60s where they gifted Elvis an 18 karat gold king Midas. This strategy is so powerful because it's not seen as an advertisement and it's a phenomenal way to keep your brand present with popular culture by looking at the people that are popular in today's climate and simply gifting them your product or service. Now, there's two ways that you can deploy this strategy for your own business. Now the first one is something that people overlook and that is to build a personal brand that has the domain expertise in whatever of the product category or industry sector that you operate in and you become that celebrity authority. And the way that you do that is by putting out content that is valuable that helps people whether or not they choose to buy from you. When someone gets interested in solving this problem that your product or service does, when they go online, they start looking at they just start to see you everywhere. And they associate your face and your brand as the expert in the niche. You're going to attract 10 times more people that will come to you to learn something than you will that if you were just going out there and promoting your products and service. Now, if you own a product business, by far one I think one of the most powerful strategies to do is to take a percentage of your marketing budget and devote that to a gifting service where you take your 10% of your budget, you get out 300 different gifts or products that you're going to gift to your market every single month. And you just send those products out without any expectation. You'll find that about 20% of the people that receive those just post about it on social and then they tag your brand. Not only do you get that affinity by creating the invisible influence and seeing your brand on all these popular influencers, but then you can also take that content and you can run it as ads. One of the reasons that these tactics work so well for Rolex is that they are crystal clear on the avatar that it is that they're targeting with all of their marketing. And I have created a software called Kong that does all of that heavy lifting for you. It will literally scour the internet. It will go onto Reddit. It will go to Facebook groups and forums and it will find out exactly what it is that your prospects are thinking and then it creates a beautiful avatar for you that you can then create Facebook ads using this software targeted specifically at that demographic. None of these tactics would work for Rolex if they weren't really crystal clear on exactly who they're targeting. You can check out Tong on the link in the description below. Now, back to the video. He said yes, sure. So, we just got we got clearance. He's good to go. Thumbs up. We're ready to go and check out the gray market and see what is up there. This guy's actually got the rollies that we want. To make things interesting, my cameraman will be wearing a fake Rolex, but not any old fake. No, a super fake. Let's see if they can spot it. Heading inside, I'm not really sure what to expect, but it certainly wasn't this. This is certainly not as prestigious as the the Rolex boutique. No. Am I even in the right place? What the hell am I getting myself into? But I continue on regardless. I'm determined to find the smoked ombre. Finally, I find the place and I'm led into a room that's filled with hundreds of luxury watches. I'm talking about millions of dollars worth of stock that would even make Drake blush. There's even some Birkham bags making a guest appearance. Still no sign of my target, but I'm close. I can feel it in my plums. I can feel it down in my plums. Hello. How are you? Hi. How are you? Good. How you doing? I tell them what I'm after and they direct me to their private office where they open a giant militaryra safe. So, how do you get all of these? Most from word. From your friends. They have profile. And they sent it to us. Mother of pearl. Yep. In rose gold. Another green. Oh, this is nice. That's a brown dial. Is it? They did. Yes. We churely there's a smoked ombre in here somewhere. Man, you have got some serious watches in here. These are so rare. Okay, here is the mother load. This is the good stuff. This is very nice. Play date Arabic with baggage. This is rare, huh? How much is this? 17. This I've been trying to find in store. I know 100% I can't get this in store. Hello, brother. When you create enough desire around something, but then you don't allow people to buy it, they are going to find a way to buy it and then the gray market is born. A gray market is just you sourcing the product through unofficial channels. They have certain buyers that go into boutiques. They've got very built up profiles. They've bought lots of watches through Rolex. And whenever inventory becomes available, these are the VIP clients that their phone rings and they say, "Hey, we've got this watch in stock. Do you want it?" And they buy these watches and then they sell them to people on the gray market for a margin, of course. And the way that they get their margin is that they're able to source products that you can't buy in their boutique. How does Rolex feel about the gray market? Do you think Rolex gets sick but doesn't die? I like it. Are more watches sold for Rolex on the gray market than in through their boutiques? You can say more watches goes on end user wrist in gray market than official. And do you think Rolex secretly love that there is a gray market? It must have a gray market. If your watch is not being bought by somebody else once you use the watch, there should be a buyer for your watch. What would you estimate? Would you say that the gray market is twice as big as the bout? Oh, much big. I think probably maybe 50 times even more. 50 times or more sold through the gray market. There's still only so many watches available on the gray market. And Rolex manufactures 1.2 million watches per year. So, what happens to all of that pent up demand and desire around the brand that can't access a watch? Well, what you get then, my friend, is the fake market. And this is what we call a super fake. So, it's not a cheap down and dirty $50 fake. This is a very high quality fake that only a trained eye can tell the difference. In fact, my main man, Called spotted the fake almost instantly with his hawkeye. Yeah, it's very obvious just from looking that far away. You can tell 99% of the fakes are very obvious. The finishing looks completely different. The curves of the case, the hedges, the hours and minutes. If you see watches quite often, so your eyes is very well trained. It's like how you grade diamonds is the same thing. And whether that watch is real or whether it's fake, having a Rolex on your wrist, it says something about you. So a lot of people, they don't care that the watch isn't real gold. They just want the linkage between what people are going to think about them and what their social status is going to be in society from wearing a Rolex on their wrist. Whenever you have a hot selling product or service, people are going to knock it off. It just comes with the territory. If you are going to get big and stick your head up out of the forest, people are going to throw stones at you. They're going to copy you and they're going to try and get some of that juice for themselves. But even with that being present, Rolex prints money using these strategies. Rolex is the number one luxury watch brand in the world with 30% market share. They do over 10 billion of sales. If this stuff didn't work, then they wouldn't have got the success that they had. There is an angle that you can take on all of these tactics to swipe and deploy them immediately and start to see an increase in sales in your business. So, after scouring what feels like every single Rolex boutique on planet Earth, dodging security, and getting hit with legal threats, the smoke ombre is still missing. But then this happened. I got an email from Rolex saying that they are trying to source the smoked ombre for me and to give them 6 weeks. But here is the deal. I cannot keep waiting. So, if they do not find me the smoked ombre in 6 weeks, I am going full rogue. Gray market, bags of cash, the whole enchilada. So, if you thought this video was wild, here's the deal. The top comment wins. Let me know in the comments which product or brand do that you want me to mystery shop next. And please have mercy. If you like this video, you are going to absolutely love this one that I put together exposing luxury brands. Like, subscribe, and I'll see you in the next one. We did a cross.