Open Letter To Companies About Watch Prices

This is an open letter to all (micro/major) watch producers about watch prices. Too many watches are overpriced for the value they provide. Some deserve and can command the asking price, while many other “me too” watches are overpriced. Please consider these perspectives.

watch prices are too high

(Source: PixelBay, licensed under CC)

I acknowledge many of the reasons for high watch prices. I am not complaining about high prices. I get it. It comes down to inflation, exchange rates, increased costs of production, and the list goes on. There are even written articles explaining why prices are so high both here and at Rather, I am writing this article to address the all-too-common mismatch between what many watch companies are pricing their watches at, versus the value they actually provide. I am going to distinguish between two major categories: the brands that customers flock to buy (5% of brands i.e. Rolex) vs. the brands that have to work to attract customers (95% of brands). This article applies to the latter.


My urging is to consider — what are people hiring you for?  This is the (now) very famous research of Professor Clay Christiansen of Harvard Business School (HBS). What they hire you for is not what you think. This sounds like an absolutely ridiculous question but it’s not. In the case of watches, people don’t hire you to tell the time. People hire your product to accomplish a job. For 95% of mechanical watch buyers, they hire the watch for one or both of these primary reasons:

1.) as “art for the wrist” (such as the “watch person” or the collector, etc) or 2.) a symbol of status

People stopped hiring mechanical watches to tell time when the quartz watch came into effect, but even more so when the smartphone started telling time for you. Yet so many major and micro brands ignore the job that consumers are hiring them for as well as the competition. This leads to watch prices being disproportionate to the watch being sold.


patek philippe gondolo watch prices

People might hire Patek Philippe as either a status symbol or “art for the wrist”. (Author’s photo)

First, let’s consider the people that hire a watch as a “status symbol.” Only a very few select brands are well known enough to be considered status symbols. A few famous examples are Patek Philippe, Rolex, Hublot, IWC, and Omega (obviously, there are plenty more). These brands command and earn premiums for their product because they have a reputation that allows status buyers to hire their watch as a status symbol. If your watch does not have the same reputation, then you are not their competitor. Your watch will not compete for the “status symbol” crowd and cannot command the same prices.

A founder of a watch company recently told me who he perceived his competitors to be. It was an aggressive founder-curated list. Watch producers and founders don’t get to choose their competitor — the market dictates that. You are only a competitor if you are pulling customers from each other. Let’s go back to the “status symbol buyer”. They are hiring status. An unknown or lesser known brand does not provide this benefit, therefore a brand without recognition cannot compete for the “status symbol” premium.

Now, consider the “art for the wrist” buyer. This buyer appreciates the look and the feel of the watch more so than other customers. This is where appearance and product quality matter. In order to compete with more popular and also-good-looking brands, your watch must provide significantly more value. Jean Claude Biver gets this; he continually says that TAG Heuer must provide watches that have twice the value than the watch price. This has been a source of recent success for TAG Heuer.

Jean Claude Biver

By World Economic Forum – Flickr: Jean-Claude Biver – World Economic Forum Annual Meeting 2012, CC BY-SA 2.0, Licenced under CC


Daniel Kahneman, a Nobel prize-winning behavioral economist says that a new product must be significantly better than existing products before a customer will buy it (see previous article on this). His research shows that customers penalize shortcomings much more so than give you credit for cool features. In other words:

You might have a new style of watch hands that are attractive: +1 point

Your unknown watch is priced the same as an Omega Speedmaster: -5 points

Your watch is an automatic with ETA movement — the same as most other watches: 0 points

Your watch has a new attractive dial: +1 point

Your watch has a poor case finish: -5 points.

In other words, your value offering must be significantly better as an incoming or lesser known product.  

iwc pilot watch prices

IWC makes a great watch. Is yours 10X better? If not, you can’t charge the same price. (Author’s photo)


Let’s pretend your competition is who you think it is. Consider what they offer (usually a well-known brand with high-quality reputation and a distinct look). What is your value proposition or what do you offer that a customer should consider your watch over a competitor? Most marketers stop with “I produce my product in country X” or “Mine looks so much better.” Those are features, but neither of those is a value proposition.

First, consumers today buy products made all over the world. Consumers give credit for the country of origin as well as hand or artisan made. However, they only give credit if the quality is equal or better to the alternative. Customers don’t forgive poor quality regardless of where it was made. Unless a watch demonstrates equal or superior quality, consumers don’t care where the watch-producing CNC machine was located. The CNC machine operates the same regardless of the country it was operated in. I have seen plenty of watches produced in Switzerland and the USA that demonstrate lesser quality than watches made elsewhere. A “made in” label doesn’t make the consumer forgive poor quality. Nor does Country of Origin dictate the quality. Quality dictates the quality; it is incumbent on the producer to ensure it meets the standards that consumers expect regardless of label.

rolex factory watch prices

Inside Rolex Factory (Source:

The next major value proposition that seems all too common is producing the same watch with a new shade of gray, or another brand-new “revolutionary” panda dial (that looks about the same as the existing models). These are not value propositions. This is especially rampant when the same watch has two different prices depending on which dial color you want. Sure, Rolex can do this with the Green “Hulk” Submariner because it is in high demand and hard to buy (they are one of those 5% brands that customers flock to).

How is value created to command higher prices? Value must be offered through quality guarantees, bold unique designs, or a high product-to-price ratio. For example, a lifetime warranty is a differentiator and allows a company to provide something that most others currently do not provide. Or consider the Audemars Piguet Royal Oak at its release. It was a very bold design that gave the watch a unique look. Or lastly, take a well-known company that makes a watch with a ceramic case that costs $10,000. A new, lesser-known company entering the market creates value if they can offer a similar ceramic watch for $5,000.

AP Royal Oak


I close this “open letter” by asking companies to consider what job the customer is hiring them for? Very few companies are hired as a status symbol. That means the rest are generally hired as “art for the wrist”. Therefore, watch prices should reflect this competitive reality. You don’t get to choose your competition, so don’t determine the price of your watch to be equal to those mythical competitors. Be realistic about who is your competition. Does your watch communicate the value that you feel it is worth? The best way to test this is find some watch enthusiasts and ask them if they would buy the watch for $X. Generally speaking, my experience is that I would not be willing to pay the asking price. Finally, what value is your watch providing? Is it a significantly better value than actual competitors or is it the same watch everyone else is already making for the same price?

Thank you for reading.

The post Open Letter To Companies About Watch Prices appeared first on Watch Ponder.