“The price is not the result of marketing philosophy. It is just the result of my philosophy, my love for extreme technique.” – Richard Mille.
Richard Mille is one of the maestros of the modern Swiss watchmaking industry. His namesake brand is known for producing some of the most extreme examples of horological mechanics or as he prefers “a racing machine for the wrist”. Today, his clientele includes A-list celebrities, royalty and leading athletes and he is often credited with creating the 7-figure price category. Despite the steep price of entry, most of his watches are spoken for immediately after being announced. Often, by repeat customers or collectors. It would be fair to say that Richard Mille is the equivalent of a hypercar in the Swiss watchmaking industry. But as the quote shows, this wasn’t a commercial decision. Instead, his focus was on propagating his philosophy, his identity, his brand, via the design. The price was just a bi-product.
I think Richard Mille’s story carries a very important lesson for all entrepreneurs and product designers. You must forgo the traditional approach and design to a philosophy i.e. a brand, not to a price. Why?
1- Because if you design a product based on price, there will always be an aspiring disrupter willing to produce a better, faster, cheaper version. In this situation, you are forced to engage the competition in a perpetual jousting match of sales. Eventually, you end up in a race to the bottom and expose yourself to substitution. Hence, you forego any loyalty.
2- When you look at some of the top brands in the world across different industries, you realize that a powerful brand dispels any notion of competition on price. There will always be competition but this is where a powerful brand can over come competitive comparison and perpetuate loyalty on the basis of a shared philosophy with the audience.
This is only possible if you have a brand-driven approach. What does that mean? That means that all your value creation is focused on reinforcing your identity, your unique philosophy, instead of compromising the sanctity of your brand for the sake of trying to meet a price point. And this is why you must start by defining your identity, your brand. Then use this identity to drive the design. Once you cement your position in the market as a brand, then you can explore the price ladder by offering diluted or amplified versions of your product and employ other tactical measure to manipulate sales. But your core positioning must be based on brand.