The more top-ranked executives I meet, the more I’m struck by how many lessons people who invest in businesses can take from the people who are successful at running them.
When I recently sat down with Jan-Patrick Schmitz, the president and CEO of Montblanc North America, the 105-year-old company known for its high-end writing instruments and other luxury items, he told me the company had recently had the best year in its history.
Naturally, I asked him how a luxury goods manufacturer had managed to navigate so successfully in the wake of the global financial shockwave of 2008.
“We are not ever in a one-year fixed environment. A long-term game plan is paramount for economic success,” he said.
As Schmitz expanded on that comment, I was struck by how much of what he said is similar to what as a wealth manager I tell clients about managing their financial destinies.
When things turned sour in 2008, he explained, all businesses had to consider what path they should take going forward. Many were convinced that the environment had changed drastically and that it was time to consider new strategies. Some luxury brands considered and even implemented a downstream approach, offering promotions and lower priced products.
But Montblanc, which had built its reputation on pens that are “truly original pieces of art,” decided to reaffirm its commitment to upholding the quality and legacy of its brand. “We knew our customers bought Montblanc products to commemorate a special occasion: a graduation, a bar mitzvah or confirmation, a success on the job or a promotion,” Schmitz said.
It launched a campaign to remind consumers that the quality of a Montblanc pen was as unique as the event it was commemorating.
“Pricing is only an issue if the consumer doesn’t understand the product,” Schmitz said. In 2009, the company introduced a Signature for Good collection of pens ranging in price from $400 to $26,000, pledging 10 percent of the sales to Unesco as a charitable partnership. Hoping to raise about $1 million, Montblanc was able to quadruple that—and more. It donated $4.35 million.
The company had decided to direct its efforts toward ensuring that its pens were perceived as valuable, and it kept its pricing constant. Its strategy worked.
Investors and wealth managers , just like manufacturers and retailers were also divided about how to proceed in 2008. Some had decided that “this time is different” and that the events of the moment invalidated all prior planning.
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