March 18, 2016
Watch brands hate to service your watch
Yes, they do. So don’t be surprised if you have to wait 3 months to have it done. So what’s the problem? The majority of the Swiss watch brands are owned by groups of investors. Richemont, LVMH, Swatch Group, Kering… They know very well how money works but not necessarily how watchmaking does or the brain of a Swiss watchmaker. Selling stuff keeps investors happy and calculating the profits of selling new watches is easy. I make a watch for 1’000 and sell it for 8’000. Happy days.
After-sales service does not make money. But, if well done, it keeps a client happy and loyal to a brand. How do you calculate happiness and loyalty? So if we sell less we blame it on the Chinese and the Russians instead of trying to fix the issue of bad after-sales service. The consensus is, after-sales service sucks and there’s nothing we want to do to try and change that. The solution is not rocket science. It used to be called “subcontracting”. No it’s called “outsourcing”. Companies like Ikea, Samsung, Hewlett Packard outsource the living daylight out of everything they possibly can, and with a lot of success, it seems.
If 10 watchmakers would overhaul 200 watches per month, each job worth a hypothetical 500, well, that’s 100’000 ($, £, €, CHF… whatever) , minus their salaries the company would roughly make 40’000. A normal work day in Switzerland is 8 hours. If you deduct from that, coffee brakes, smoking tabs, chatting with colleagues, social media sessions in the rest rooms… the average day is max 6 hours. To service the same amount of watches you would need 5 independent watchmakers working from their own workshops. You would pay them, let us say, 60’000 and net the same 40’000. So, with 10 independents you would keep twice as many clients happy. A major problem today, are the monstrous delivery times the clients have to suffer. Add to the cost of your 10 “in house” watchmakers: rent, tools, sick leaves and holidays and you can kiss goodbye another 20’000 of your profits. Am I finished yet? The day you have less work in the factory, you still keep paying for the chatting and coffee drinking, while the outsourced guy, you can just send fishing and it’s not your bother.
The companies that sell solid, well engineered, user- and service friendly watches, and are happy to distribute spare parts to independent watchmakers in whatever country they may be, will sell more watches. Simple.
I once overheard a successful director of a Swiss watch factory say that “his dream factory would have no watchmakers in it”. How right he was.