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From Local Store to $200 Million in Online Sales with Danny Govberg

Danny Govberg is a pioneering force of the contemporary watch industry. His vision and insatiable passion for watches and technology enabled the evolution of Govberg from a Philadelphia-based retail shop to one of the world’s premier authorized dealers of both new and pre-owned timepieces.  Danny recognized years ago that selling new watches was only one way to support the life of a watch collector and set in motion a tech forward, pre-owned strategy that inspired the evolution of WatchBox.

Episode Resources

 

A 100 Year Old Startup Company

Phil Singleton: Danny, welcome to the show.

Danny Govberg: Thank you.

Phil Singleton: Of course, we’ve talked before. I want to give our listeners on this show another little background about how you guys got started, maybe the family business, and just a quick overview of where you took it from the retail storefront business to the powerhouse that it is today.

Danny Govberg: Basically, my grandfather started the business in 1916. 102 years ago. It was a traditional jewelry store. 600 square feet. He was selling diamonds in a wholesale district of Philly. My dad came into the business in the ’50s. He worked it pretty much the same exact way with my grandfather and my grandmother in the same store.

Then in the early ’80s, my brother and myself entered the business and because it was such a small store, we were selling jewelry and diamonds, there wasn’t a lot for my brother and myself to do. We decided that we were going to sell watches or go into watches. Because we were in a wholesale district the only watches you could go into were pre-owned watches. Back then there was no modern pre-owned. It was all vintage like Rolexes from the ’70s and high-end watches from the ’50s and the ’60s.

Then as the ’80s rolled on we realized that people wanted to buy new watches. They wanted new Breitlings and new Cartiers and new [inaudible 00:22:42] so we opened in the suburbs of Philadelphia where we could get these brands and we did get these brands. Then very quickly by the end of the ’80s because one of the largest sellers of watches on a local level in Philadelphia because we had acquired close to 50 brands over that six or seven years while still maintaining pre-owned timepieces because that’s where we came from.

Then that went on pretty much the same through the ’90s. Then around in the late ’90s the internet started to get more prevalent, eBay was born, started to post some watches on eBay, had a website. I remember you had to dial up to get a tone on AOL.

That went on. It didn’t really increase the business too much but what it did was I began to learn. It started to tell myself, “I have to change.” People were going online to learn and I started to use the internet not so much to buy anything but to learn. Then as the 2000s went on, 2007, 2008, I decided to really make a push to figure out what was going to be the next step because I was now learning everything online. If it was before I bought, when I sold, where we went, I started to just … I sold the kids, the generation before me, they were all learning online.

That’s when I decided, okay, we’re going to now start to educate the customer and we’re going to start to build the website more and we’re going to start to post watches on multiple platforms and I’m going to make it that if somebody decides to call me on the phone we’re going to be able to educate people right away.

Instead of click and buy wasn’t even that prevalent yet. It still isn’t in our category of price. That’s how it evolved. Then over time things just started to take off because we were more advanced than others that were still putting in new shopping shops and new buildings and building new buildings for their customers to walk in. I was spending the investment much, much more on digital solutions.

Phil Singleton: Yes. That’s great. Thanks for giving that background. I’m really interested in diving in. You’ve been doing this a long time. You’ve really made this work grow and grown a huge, very powerful online Omni Channel business. Specifically also we like to talk a lot about online marketing, what things are working in that space.

I know before on previous conversations we’ve talked about the education process, building trust, and a lot of the ways you’ve described what works really well for Govberg and for WatchBox is essentially to me it sounds a lot like inbound marketing, right? You’re going out and doing all the education pieces. You’re creating great content. You invested in a website. You’re out on social. You’re doing pay-per-click. You’re working on SEO.

All the things that draw people in and is a full part of this process where people can educate themselves and then bring them to the phone to call you so they’re completely warm and pre-educated and then can actually get to talk to somebody. It’s like, “Okay, it’s time to put $10,000 on a new watch or a used watch. I’ve got the faith because you’ve brought me through the channel and all that kind of stuff.”

Building an Omni Channel Machine

You didn’t start there, right? Obviously now you’ve got this powerful Omni Channel machine working but it didn’t start like that, right? Looking back in hindsight where would you have started? Where would you have put more effort in today if you were to start maybe in 2008 having the knowledge that you have right now?

Danny Govberg: Well, I had the first 1-800 number back in 1992. Nobody had a 1-800 number so I had a 1-800 number. I was advertising on page two of the Wall Street Journal in 1992 to call my 1-800 number. You speed up and you think, “Okay, the 1-800 number of 1992 is now your website or Google of today.”

Phil Singleton: What do you tell people? I’m in the website business so I get a lot of folks they still think of their website as a digital brochure and not a marketing hub. Obviously you’re hook, line, and sinker. You know that it’s a marketing hub, right? What do you tell somebody that’s like, “I’m not going to spend that amount of money on a website. It doesn’t work”?

Danny Govberg: I’ll tell you the issue that most people have. It’s a real investment. People think their websites should just be created and money should come from the sky. It’s another business. In reality, most people go to an agency to go build their website. They spend money, if it’s $10,000 or it’s $100,000, whatever it is, and the website begins and then the website is finished. They don’t realize from the day that the website is finished, it’s old.

Phil Singleton: Exactly.

Danny Govberg: We take a much different approach. In simple terms, like if you were going to teach your kid something that you could draw, most people today design their websites that they have their website, they go to an agency like I said. The website starts out with a tire, then they put on the door, then they put on the engine, then the roof goes on, and then at the end you have a race car.

We build it where we start with two tires like a skateboard. Then that moves to a bicycle and then that moves to a motor scooter and then that moves to a little working car and then it moves to the final race car. We’re constantly improving. We’re constantly moving. It doesn’t just get built and then end and then wait six months and get built and end.

I think most businesses have to realize once they have a website today who is managing it? Who is making it better the next day? Who is working it on a … Go ahead.

Phil Singleton: You just alluded to it. To me, when the website launches it’s not the end. It’s the beginning, right?

Danny Govberg: Correct.

Phil Singleton: It’s the beginning of you working on it and fueling it and putting the stuff on there that’s actually going to educate.

Danny Govberg: Correct. That’s where the millennials today are super because they can code. Many of them. They understand social. They understand where they’re learning. You’ve got to be willing to have a couple of people working on your social and working on your website at all times. Not just outsourcing it, somebody finishes it, and you think money comes from the sky.

Then when it doesn’t you’re angry and then when the agency says to you, “Look, it’s going to be another $10,000” or $15,000 or $20,000 you look at the agency and say, “You know what? I don’t want to spend it right now. It’s just not worth it.” Which I’m sure you hear all the time.

Phil Singleton: Exactly. I think people are timid. You seem like you’ve been to me a fearless marketer. You put marketing dollars behind it. You guys spend it, I think you invest wisely, and you make sure you get the return on it. There’s a lot of folks out there I think that get really timid and dip their toes. Some of I think you have to go out there and … Also, though there’s got to be a strategy behind it. You can’t do one-dimensional approaches. Some of this stuff has got to tie it together.

…marketing media has never been cheaper. It’s never going to be this cheap again

Danny Govberg

Danny Govberg: Of course. A couple things. One, marketing media has never been cheaper. It’s never going to be this cheap again. It used to be very expensive to market. Today, it’s free. Almost free. What I mean by that is you can have an Instagram account, you can have a Facebook page, you can have a YouTube channel and you can advertise to the world. You get the whole world for free where you used to have to pay a fortune for your local newspaper or a national magazine.

Today, you have people that can … Like I said, I look at us. We have two million people a month click on one of our watch reviews. When you think about it actual media.

Phil Singleton: That’s mostly organic clicks, right? Those are people and finding and looking for reviews and they’re consuming your content because they found it.

Danny Govberg: Correct.

Phil Singleton: Yeah.

Danny Govberg: Okay. I think that the other thing is that everything should be measured. We have people here their entire role in the company is measurement. Again, you may need two people on your website and then you need somebody in analytics who is running your marketing. They’re not running your marketing like traditional marketing where you hope the ad works. Today you can know what works. You know what doesn’t work. You know where the lead comes from and everything should be measured.

Phil Singleton: That’s great. Great advice. I know just from working with you guys and knowing who you are and following your stuff that you’re pretty much doing the whole package. You’re out there doing a guesting campaign right now. You guys blog. You create e-books. You do invest heavily in AdWords and you work on SEO and you’ve got all this social campaign. You really have the full … We look in terms of the website and the wagon wheel hub of all the spokes. You guys really have all those engines turning and it’s all tied up.

What other things do you do that are maybe a little bit more traditional focused? Are there things like trade shows that you guys get involved in? Or any forms of traditional meeting that stuff?

Danny Govberg: I’d say if you want to go to the traditional I would say that we’ve moved our traditional to high touch. What I mean by high touch it is the one on one dinners, the one on one meetings where you are measuring trust. We’ve actually really gone away from traditional marketing altogether.

Phil Singleton: No TV, no radio really. None of that. No on the ground trade shows but you guys do some high touch things like sponsoring. Any other … You think luxury items there’s always people … You can see Rolex up on the sports stuff and on race cars and things like that. You don’t do any of that now or have you ever done any of that stuff? Just out of curiosity.

Danny Govberg: Sure. See, if it’s Rolex then I leave it to Rolex to brand themselves. I can’t compete underneath Rolex. I can market digitally absolutely and we can use their social absolutely to educate people why they should buy their Rolex from us or buy their pre-owned Rolex from us. I can’t compete anymore with the big brands who are measuring. At the same time they’re willing to spend a lot of money for brand recognition. We can’t afford just brand recognition. We need to make sales off of our marketing, which then leads to brand recognition.

What Does Your Customer Want?

Phil Singleton: Tell me if this is true or false because this is one of my pitches when we talk to businesses of all sizes. Somebody has got to go out there and create demand but what a lot of businesses fail at is, to me, and you alluded to this many times before is that there’s no way to escape people coming back through the internet, through a purchase decision.

You create demand outside. Before somebody makes a purchase, especially on a high ticket item, they’re going to go back to the internet and that’s a chance for people that are well-positioned to maybe sneak in and capture the demand that other people are creating, right? It could be the brands that you’re selling. It could also be your competitors.

Danny Govberg: 100%. That’s why I say is that just because we market well, just because we have a website, now you better have the human capital. You have to give the value proposition to the customer. How do you put the savings of time into your business model? How do you answer the phone quicker? What makes you number one? What does the customer really want?

If you just always come back to the customer and just say, “What does the customer want?” Then sometimes you can’t satisfy what every customer wants. You can’t be Tiffany service sometimes with Walmart pricing. That won’t work. What you can do is say for who you are and what your best stroke is or what you’re best at, what does the customer want? Get away from marketing and the ego and look at my beautiful website and just come back to one simple thing. What does the customer want? How can I save them time?

Phil Singleton: Awesome. Let’s wrap it up with one final question. I’d like to just pick your brain a little bit about what you guys have tried a lot of different digital tactics. I’m just curious if you’ve had any surprises where you thought, “That worked really well” or didn’t work as well as we thought or any kind of favorites that worked.

Video to me is the future of where people are going to get educated and where people are going to begin to trust.

Danny Govberg

Danny Govberg: Over time, all the rage was Facebook and then all the rage was Instagram … Well, it started with Google but then moved to, say, Facebook and now Instagram. My true belief is as a number one takeaway, it’s all about video. Video will be consumed. Video is being consumed at exponential rates. Video to me is the future of where people are going to get educated and where people are going to begin to trust. That’s my takeaway. I believe that video is the future for at least the next few years.

Phil Singleton: There you have it. One golden nugget from a guy who’s doing it and has built it and is an expert at what he does. Danny, I really appreciate having you on the show. Where can people find out more about you online?

Danny Govberg: They can go to Govberg Watches dot com, TheWatchBox.com, or download our app, which is WatchBox. It’s one of the best pieces of technology for watch collectors in the industry. Or they can of course go to our YouTube channel, which is WatchBox or go to Instagram account, which is WatchBox. There’s many, many ways to follow us. If you love watches.

Phil Singleton: Yeah. We’ll put all of those in the show notes too so we’ll make sure … I definitely recommend everybody go check out the YouTube channel.

Danny Govberg: The WatchBox app is pretty cool.

Phil Singleton: Yeah.

Danny Govberg: And the YouTube channel.

Phil Singleton: And the channel for sure. We’re going to send people to the website also. Thank you so much for being on the show. This was a true honor to be able to talk to somebody who has been in one of the traditional businesses, worked at the store level, brought in a new product and grown it locally, and then has taken it not only online but has grown a really big market-leading online presence as well. This was so awesome. Thanks to you so much, Danny.

Danny Govberg: Yeah. We’re a 102 year old startup.

Phil Singleton: I love it. On that note, goodbye.