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Luxury Partnerships

Former Marketing Director at Richemont, IWC Schaffhausen

IP Interview
Published on April 18, 2020

Why is this interview interesting?

  • How IWC uses partnerships with Mercedes Benz and other brands to market new products
  • Commercial terms and relationship dynamics of partnerships in the luxury world
Executive Bio

Jens Fabian Herdieckerhoff

Former Marketing Director at Richemont, IWC Schaffhausen

Fabian has over 20 years experience marketing luxury watches. He started his career as a product manager in Germany for Cartier before moving to Richemont when the company purchased luxury watchmaker IWC in 2001. At Richemont, Fabian was the Marketing Director for IWC where he was responsible for the international marketing strategy over 7 years. He then spent 2 years running Burberry Watches at the Fossil Group and is now a luxury market consultant.

Interview Transcript

Why do you think partnerships and ambassadors in the luxury world are so important to driving brand identity?

Basically, it depends on the brand. Yes, at IWC, we also worked with brand ambassadors, but for example, we never used them in advertising. Brand ambassadors can work really well for a short time and they work well in Asia particularly, where people like to make the connection between a person and a product, less so in Europe. Then brand ambassadors are also a slightly risky game because you never know what the brand ambassador might get up to. Quite frankly, first of all, they’re also going to get older and then perhaps are not that much in fashion with your client group or whatever, or there might be some scandals surrounding an ambassador and your brand might find itself in a very difficult situation. Especially if you’re using the face as the face of the brand. At IWC, we tended to use the ambassadors on a more second-degree level. At event to support the brand. Within special stage production such as theatre shows and so on. We never relied purely on the celebrity factor. It didn’t really match the brand so well. I think it matches more feminine brands better, especially Asian consumers love looking at movie stars and tend to copy their style and taste and so on. Men tend to do that less.

Explain the approach to partnering. For example, you mentioned how IWC partnered with Mercedes Benz in the engineering world that you developed. How crucial is it to drive those partnerships to maintain or build the brand identity?

The partnerships only work as well as they get lived by both sides. If you just stick the label of one brand onto the other brand and think that’s going to work, it might not. I’m not going to mention which brands I think but some brand partnerships in the watch world don’t necessarily always make too much sense. If you have a car brand and a watch brand, first of all, your clientele has to be relatively similar or share the same type of values. If you have a very high-end car brand and a medium luxury watch brand, that won’t necessarily work. You really need to look that your clients are aligned. Then if it’s just a transfer of logos, people look through that right away. They also want to see that the partner uses elements of the other brand. For example, Mercedes Benz, on the dashboard clocks on the very high-end models such as Maybach and AMG, it’s an IWC clock face. It’s not a manually wound watch, of course, because it’s a car, but it is still a watch that looks like the IWC watch. It has to go both ways. That’s important.

What are the terms or commercial relationships typically in these partnerships?

Ideally, if both brands profit from it, then it normally flows. Basically, it depends on the partnership. A true partnership where both are set to profit between two companies, for example, there should be no need for one to pay the other. If, of course, you have a partnership with a type of charitable society, such as the Galapagos Island Foundation or the Charles Darwin Foundation that we worked with, then, of course, the brand will donate quite substantial amounts of money to these organizations. That in turn provide content because of the projects they will be able to finance with money they get from the brand. To provide more content to the brand and credibility. People that would buy a special edition that benefits the Galapagos Island Charles Darwin Foundation, they would be able to see concrete projects where the money paid by IWC to the foundation was put to charitable uses. It adds to the credibility.

With a straight corporate to corporate partnership, do you share the marketing expense or do you just agree on where you’re going to use each brand or how does that negotiation typically flow?

Yes, that, of course, gets planned very precisely. Are you going to use it in printed advertising? Are you going to use it for public relation purposes only or event driven and whatever? If it’s a true partnership, it should really transcend all the disciplines of marketing to make proper sense. If it only makes sense for an event or only makes sense for print or public relations, then it’s probably not good enough. It should really make sense in all types of communication tools. Otherwise, in my opinion, it wouldn’t really be worthwhile.

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