Issue No. 7: Rolex

For this collaborative issue of The Narrative Field Guide, I teamed up with fellow category design nerd, Devin Reed. Devin’s the former Head of Content Strategy at Gong and Clari and now runs a content advisory firm called The Reeder. He’s also a massive fan of Rolex. Devin not only taught me a ton about the brand, but he was a blast to work with, too. For more of Devin’s content, follow him on LinkedIn or subscribe to his newsletter.

Rolex doesn’t take direction from others.

It knows what it stands for, and has operated that way for decades. Its conviction and consistency are, in our view, why Rolex is the brand that always comes to mind first when you think of luxury watches.

In this issue, we’re going to unpack how Rolex uses a distinct POV to establish its brand, how its use of original language helped its brand stick, and how its choice of category strategy helped it stave off commoditization – all levers that you can pull to position your brand as the only obvious choice. Rolex happens to be a luxury product, but it’s one that brands well outside this sphere can still learn from.

Background

Rolex is an old-school company. Founded in 1905 by Hans Wilsdorf and Alfred Davis in London, "Rolex" became the official name in 1915. A few years later, the company moved to Switzerland. Of course, Rolex watches are expensive (they’ll start around $7K and go well north of that), but the company is also credited with several technical firsts:

• 1926: the world's first waterproof wristwatch

• 1931: a patent for its first self-winding mechanism

• 1945: the first wristwatch to feature a date display on the dial

• 1953: the first wristwatch waterproof to 100 meters

• 1954: a watch for pilots with a dual time zone display

Rolex watches have been worn at milestone events like the first summit of Everest and when racing drivers set land speed records. Its latest achievement is a watch that can survive at the bottom of the Mariana Trench–at nearly 36,000 feet deep. 

Another thing you may not know about Rolex: while it’s technically a for-profit company, it’s owned by a non-profit organization, the Hans Wilsdorf Foundation. Both are based in Switzerland, and while we have little data about their financials, industry analysts estimate that Rolex produces about 1M watches annually. 

Building a Brand Starts with a POV

Let’s start with Rolex’s POV. Mapping out a brand’s POV from the outside is always a difficult exercise because we usually don’t have visibility into the inner workings of the company. Like archaeologists piecing together a pile of fossils, we do our best to come up with an objective take on what a brand believes. We may not get it 100% correct, but the process is still a worthy exercise.

One approach for a POV is a product-based one. You see brands like Apple do this all the time. In the late 90s, Apple noticed that consumer PCs weren’t very good at the Internet, so they launched the iMac (the “Internet” Macintosh). From a product perspective, it was categorically different from other products–you could visibly see how its screen, memory, ports, etc. put it in a new product class.

But that’s not the case with Rolex. Look, they make a nice watch. But so do Omega, Tag Heuer, Longines, and dozens of other brands. They all sport impressive movements, detailed craftsmanship, luxurious designs, and will easily set you back five figures. While Rolex may have started off with unique products, today there isn’t anything functionally different between Rolex and other luxury watches. So a product-based POV is off the table.

Another possibility is that Rolex doesn’t really have a POV at all–it just spends more on marketing. After all, if you’ve ever watched Wimbledon, the PGA Tour, or Formula 1, you’ll see Rolex everywhere. But if that’s all you see about Rolex, you’re not looking deep enough at Rolex. (More on Rolex’s advertising strategy later.)

Owning a Rolex Means Valuing Excellence

After taking a closer look at Rolex’s history and advertising, our take is that Rolex’s POV is based on the idea of excellence. More specifically, that you (as the customer) both appreciate and deserve excellence. We believe Rolex has a specific definition of excellence:

• Excellence means pursuing the best materials and classic designs

• Excellence means not over-engineering a solution

• Excellence means taking charge, setting your own path

• Excellence means pursuing the pinnacle of your profession

• Excellence means you expect your tools to be as well-honed as you are

Rolex has run plenty of advertisements, but there was one campaign in particular that really cemented this idea for us:

We love this campaign for a couple of reasons. First, Rolex positions you as the hero of the story. Rolex isn’t just a tool to help you become your best self – it’s a tool that helps you become the best. Even if most wearers will never fly the Concorde, drive a Formula 1 car, or speak at the United Nations, Rolex makes you feel that it’s at least a possibility. It’s a brand that believes in you and makes you believe in yourself. When Rolex uses the word “superlative” in its marketing, you have the sense that they aren’t just talking about the watch; they’re talking about you.

Second, Rolex connects the demands of these aspirational professions to product features it pioneered. Scuba divers need a waterproof watch, so Rolex built one (novel at the time). Jet setters have busy schedules to stay on top of, hence a self-winding watch that’s always on time. Rolex allows for a bit of cosplay here–you may not actually need those features, but having them connects you to something more aspirational and exciting.

Excellence is Both Tangible and Intangible

Rolex is a great reminder that there are two types of value you can communicate in your marketing. Tangible value (“I know what time it is”) and intangible value (“wearing this watch inspires me to achieve”).

Even though Rolex sells a precision, highly-engineered product and employs some of the top scientists in the world, Rolex is a brand that over-indexes on intangible value–more than competitors like Omega or Tag Heuer. Why? Because once you’ve cemented the idea in your buyers’ minds that your brand embodies a value better than competitors, you’ve become the only obvious choice for people who share that value. 

Where You Don’t Advertise Speaks Volumes

Before we close out commentary on Rolex’s POV, we wanted to close the loop on Rolex’s advertising strategy. A moment ago, we said that Rolex was “everywhere.” Well, that’s only kind of true. If you watch Formula 1 (auto racing), America’s Cup (sailing), the Ryder Cup (golf), the Rolex Grand Slam of Eventing (equestrian competition), Wimbledon (tennis), or similar events, then yes, Rolex’s advertising saturates those events. It’s even used as the freakin’ clock to indicate the start of a Formula 1 race. But what you won’t see is Rolex advertising in the NBA, NFL, MLB, or plenty of other experiences where the brand could probably reach more people.

Part of that choice is a pragmatic one based on demographics. Fans of those sports arguably have more disposable income than your average Red Sox fan, so why waste money on advertising to audiences that aren’t on target?

But we believe this is a bigger decision that ties back to Rolex’s POV. What’s also true about those sports? They have a certain panache and exclusivity about them that’s not true for other sports. Just like Rolex. They’re relatively understated (Formula 1 is if you compare it to NASCAR); events and athletes aren’t overly sensationalized (like the NBA Championships might be); and none of these sports are fads–each has a rich history that adds to its charm (just like Rolex).

Language Puts Hooks In Buyers’ Brains

Language is an interesting lever you can pull. And Rolex knows how to do it right. Marketers often get in trouble for coming up with new terms for an old idea. We think it’s lame when marketers do that. It’s a lazy attempt to differentiate something that’s really a commodity.

Just as bad is when marketers take whatever buzzy terms are floating around at the time and slap them onto their own product descriptions (looking at you, “AI-powered anything”).

Unfortunately, when some people hear the term “languaging” they assume you’re referring to these tactics. Real languaging is the art of developing new words to distinguish between the old and the new. It’s a term that comes from the book Play Bigger. Rolex does languaging well, and we thought it would be helpful to show you what that looks like.

Let’s start with “Oyster.” No, not the food. As we mentioned earlier, there was a time when watches were not waterproof. It’s nice that modern watches are waterproof, but let’s be honest here. When was the last time you needed to know what time it was while submerged underwater?

Well, if you’re a scuba diver, that’s something you’d do quite often. Keeping time is a key component of dive safety. Before modern dive computers, divers used mechanical watches to sort this out. So when Rolex developed the first watch that was truly waterproof and dustproof, it could have simply called it a “waterproof” watch.

Instead, Rolex called this new technology Oyster.

Here are a few more examples:

• Its chronometers aren’t just certified, they’re “superlative.”

• Rolex watches aren’t “self-winding.” They aren’t “automatic.” They’re “perpetual.”

• The comfortable, high-end bracelet on its top-of-the-line watch is called the “Presidential.”

Intentional word choices like these aren’t just descriptive–they help define the brand identity itself. An “Oyster” watch means you aren’t just buying a watch that’s functionally waterproof; you’re aligning yourself with the brand that pioneered waterproofing in the first place. It also draws a direct connection back to scuba diving.

A “superlative” certification means Rolex holds its timepieces to a higher standard than the industry norm. Maybe you feel the same way about yourself.

Presidential? Back to that POV–if you’re pursuing the pinnacle of your profession, then perhaps your watch should remind you of that aspiration.

And “perpetual” is such a great embodiment of what the brand stands for: timeless design. In fact, the company non-profit structure lets it pursue excellence “perpetually”, without having to worry about short-term profits.

All of these terms represent real innovations that Rolex made–and they subtly reinforce the brand’s POV along the way.

It’s worth noting that Rolex didn’t come up with branded terms for every component. Hands are called hands, and the dial is called the dial. Developing new language is a lever that’s easy to pull too hard. Be careful, because if you do, you risk coming across as gimmicky and confusing. But done right, crafting the right language can help your brand put more hooks in the brains of your buyers. 

A Good Category Strategy Can Stave off Commoditization

Looking at Rolex today, it’s obvious that it’s not a commodity.

But there was a chapter in Rolex’s history where that could easily have happened.

Here’s the story. Until 1960, all watches were mechanical. They had complicated, tiny machinery inside that kept time. Mechanical watches improved in accuracy over the years, but they could still lose a few seconds each day. And they were expensive to produce. But in late 1960, Seiko introduced the Astron, the world’s first quartz wristwatch. It used a battery and a quartz oscillator to keep time instead. Long story short, after a while quartz watches were far more accurate and much less expensive than their mechanical counterparts.

On pure timekeeping alone, quartz watches were objectively better.

Then In the 1970s and 1980s, watch buyers acted as you might expect them to. Quartz watches took off, and the group of traditional, mechanical watchmakers (including Rolex), found themselves in a crisis. Profits were way down and it wasn’t clear who would survive, if anyone.

In our view, there were basically three “category strategies” the mechanical watchmakers could take: play to the category, move to a new category, or reframe the category.

Option 1: Play to the Category & Sell Your Soul to Quartz

We didn’t know this until doing the research, but despite being a staunch maker of mechanical watches, Rolex actually sold a small number of quartz watches. We aren’t sure why, though. Because once you go down this path, you only have two choices.

One is to maintain your previous pricing. But if buyers see that quartz watches are less expensive (and they should, from looking at other brands) and you don’t lower your price, it means that you’re keeping all the value for yourself. That risks turning buyers away.

At the same time, if you do lower your price, it means conceding to price pressure from competitors. Your ability to command a pricing premium goes away, and you risk finding yourself with limited room to maneuver.

Apparently, Rolex made just 25,000 of these quartz watches over 25 years–hardly anything when you compare that to the one million watches Rolex makes annually. Perhaps it was an experiment or a misguided strategy that never got resourced.

Option 2: Move to a New Category & Become a Jewelry Company

To avoid the pricing game in the “watch” category, Rolex could have moved to an adjacent category instead: jewelry. This may seem like splitting hairs (aren’t watches a type of jewelry?) but we think the difference is important. Jewelry exists for fashion and to convey the wearer’s status. Jewelry does not have functional value.

Watches led with functional value from inception, however. They can convey status, but we would argue that they are more for the benefit of the wearer than the outside observer (remember that cosplay element we talked about earlier, too). For a watch to work as jewelry (and convey status) it has a different job to do.

This would have been a slippery slope for Rolex. If you look at Rolex’s designs, they are remarkably consistent across the decades. They’re also relatively conservative. Turning Rolex from a timepiece into jewelry could have put Rolex at risk of eroding the values that it had so carefully built up to that point. Designs could have turned more ostentatious, whimsical, trendy, or gone off in a number of other directions.

Not only that, but the jewelry space already had plenty of competitors. Rolex would have been giving up a leading position in one category to compete in one where it has less of an advantage.

Option 3: Reframe the Category & Sell the Intangible Value of Mechanical Watches

This strategy would have taken the most courage of the three options, but it obviously worked.

Earlier we mentioned how most products have some degree of intangible value. This strategy meant doubling down on the intangible by catering to all of the aspirational, emotional reasons why someone would want a high-end mechanical watch in the first place.

Let’s be clear: if you want accuracy, a $20 Casio (or your iPhone) will outperform the best Rolex. This strategy does not mean selling a “better” product.

Instead, it means playing to the intangible means speaking to buyers who value craft. Let’s unpack that.

In an age where mechanical watches are no longer a necessity, having one says a lot about what you value. It could mean that you appreciate the science and engineering that go into creating something so delicate yet so precise. Maybe you value human achievement in a more general sense, and this is your way of stating that.

Perhaps the human touch speaks to you. The fact that a human being–someone who probably spent years in training–personally assembled and calibrated your watch feels special to you. Especially at a time when so many things are mass produced.

It could be a number of things. We don’t presume to know them all. But for the same reason someone pays $10,000 for a piece of original art when they could buy a reprint for $10, some people place a premium on handmade objects that reflect the height of human capacity.

Rolex did this right, and it reframed why mechanical watches matter in the process.

Wrapping Up: Marketing Works…When It’s Genuine

It might be easy to look at Rolex’s marketing strategy and scoff. After all, couldn’t any watch brand say that its products are “excellent” or even “superlative”? Sure. But when we looked under the hood at Rolex, we found that it’s a company whose approach to marketing reflects who the company is at its core. For example, we discovered in this interview that Rolex regularly makes major improvements to its materials and production processes, and it doesn’t even tell anyone. Who does that? Only a brand that cares deeply about excellence for its own sake.

3 Questions You Can Discuss With Your Team

Do we believe our POV?

Buyers are smart. If you have a POV but it doesn’t reflect who you actually are as an organization, it won’t pass the smell test. Sooner or later, buyers will see through the veneer of a false POV, and it will work against you. How do you stack up here? 

What is our category strategy?

As we covered in the Trex issue, every category evolves, including yours. As it does, your brand will have to consider its response. Will you succumb to commoditization (as Trex is at risk of)? Will you let competitive pressure force you into another category? Or will you take the reigns and own your category strategy, like Rolex did?

Do buyers appreciate the intangible value of our products? 

One of the best things you can do is understand why customers buy from you. Even if you’re selling a boring, technical product, like enterprise software, there is almost always an intangible, emotional reason behind the purchase. Do you know what it is? 

One Quote To Leave You With

Cheers,

John Rougeux
Founder, Flag & Frontier

Devin Reed
Founder, The Reeder

P.S. Thanks for reading. If you’re interesting in collaborating with me on an issue like Devin did, let me know. Who knows, could be fun!