How to Succeed Like TIFFANY & CO.

Posted on | February 28, 2010 | 2 Comments

Want more revenue? Well then, make your offerings stand out more, so much so that your customers and prospects see what you have to sell as head and shoulders above the competition. You can do this if you harness the power of focus, clarity, simplicity, and utility, for these are the hallmark aspects of so many great things. Harness them in your business and you will enjoy no end of success. But you need to appreciate how doing this can prove quite a challenge. That’s because strengths like these cannot be gauged effectively on their own (or by you looking just starring at yourself and your company in the mirror). No, these are aspects that require a benchmark to be judged.

Tiffany & Co. presents a powerful and readily accessible benchmark for gauging your offering’s sales and marketing strength, one that B2C and B2B businesses can both use.

If savvy business owners and top executives pay attention, they can learn a lot about how to thrive on the lengthy road to success from this world renown manufacturing and merchandising company, particularly in the realm of brand focus and how to craft high demand offerings. Started with a $1,000 loan by two entrepreneurs almost 200 years ago in New York City, Tiffany’s products and iconic brand have long stood out, winning a legion of loyal customers in the highly competitive arena of the jewellery business.

Tiffany’s Mission Statement & Brand Promise

To quickly put the above comments in perspective, let’s have a look at a Tiffany & Co. advertisement that appeared in the front section of the Monday February 22, 2010 Globe & Mail newspaper. I invite you take in the Focus, Clarity, Simplicity, and Utility conveyed in this ad, as well as its marketing message and what it powerfully has to say about Tiffany’s mission statement & brand promise:

Tiffany & Co. - Globe & Mail Feb 22 2010 ad

Doesn’t this minimalist ad command your attention? Doesn’t the imagery of the ad make you believe that Tiffany has the breath-taking products you and your loved ones will treasure for your whole life. Heck, I bet you didn’t even pay much attention to how the ad doesn’t show any lifestyle visual imagery or a picture of their products.

Now, can you write a similar ad for your business? The advantages of trying to do this will help you reassess the fundamentals of your market and re-articulate the appeal of your portfolio of offerings. And revisiting your company’s marketing basics is a great way to help strengthen your business. Really, when was the last time you gave serious though to these matters? While it may take some inspiration and time, this is a powerful exercise in boosting the clarity of the customer value add you provide by simplifying your message and focus.The product of your labour should be a more relevant mission statement for your company that straight-forwardly states why your customers believe in your company and need and want it to continue in business, all based on what your offering means to them every time they buy from you.

Tiffany & Co. History – How They Became an Iconic Brand

Tiffany & Co. classic simple design in products and packaging For over 170 years, the name of Tiffany & Co. has been synonymous with romance, style, quality and luxury. Few American companies have such an illustrious history. Their story is one that tells of celebrities and heads of state who have worn their designs of gold, silver and precious stones on many important occasions; of ground breaking designers who lent the company their visions and creations; and of the growth of a New York City legend into a worldwide jewellery phenomenon.

New York City in the 1830s was a time of dynamic growth, extravagant tastes and golden opportunity for anyone with a little capital and an abundance of imagination. And in 1837, New York became the proving ground for twenty-five-year-old Charles Lewis Tiffany and John B. Young, who opened a “stationery and fancy goods” store with a $1,000 advance from Tiffany’s father.

On their way to the new Tiffany & Young emporium at 259 Broadway, fashionable ladies in silks, satins, and beribboned bonnets faced a gauntlet of narrow streets teeming with horses and carriages and the hurly-burly of city life. At this store that has since grown into what we know as Tiffany & Co. today, they discovered a newly emerging “American style” that departed from the European design aesthetic that was rooted in religious and ceremonial patterns and the Victorian era’s mannered, ornate opulence. The young entrepreneurs found inspiration in America’s New World natural beauty, which they interpreted in exquisite patterns of simplicity, harmony and clarity. These became the hallmarks of Tiffany design, first in silver hollow-ware and flatware, and later in jewelry. Tiffany first international recognition was achieved at the Paris Exposition Universelle in 1867. The company was awarded the grand prize for silver craftsmanship, the first time that an American design house had been so honored by a foreign jury. Tiffany was also the first American company to employ the 925/1000 measure of silver purity. Largely through the efforts of Charles Lewis Tiffany, this ratio was adopted by the United States Congress as the American sterling silver standard.

Tiffany & Co.’s silver studio was the first American school of design and, as one observer remarked, “a teacher of art progress.” Apprentices were encouraged to observe and sketch nature, and to explore the vast collections of sketches and artwork assembled by Edward C. Moore, the head of the studio. By 1870, 33 years after they first opened their doors to the public, Tiffany & Co. had become America’s premier purveyor of jewels and timepieces as well as luxury table, personal, and household accessories. By the turn of the 20th century, the company had more than one thousand employees and branches in London, Paris, and Geneva.

In 1878 Tiffany acquired one of the world’s largest and finest fancy yellow diamonds from the Kimberley diamond mines in South Africa. Under the guidance of Tiffany’s eminent gemologist, Dr. George Frederick Kunz, the diamond was cut from 287.42 carats to 128.54 carats with 82 facets (most brilliant-cut diamonds have only 58), which gave the stone its legendary fire and brilliance. Designated the Tiffany Diamond, the stone became an exemplar of Tiffany craftsmanship.

In 1886 Tiffany introduced the engagement ring as we know it today—the Tiffany® Setting— an innovation that lifts the diamond above the band with six platinum prongs, allowing a more complete return of light from the stone and maximizing its brilliance. Today the Tiffany Setting continues as one of the most popular engagement ring styles and shining symbol of the jeweler’s diamond authority.

Tiffany prospered as never before during New York’s Gilded Age, the 35 year period following the US Civil War until 190 when there was a substantial growth in population in the United States and extravagant displays of wealth and excess of America’s upper class were quite common. This was a time when the world embarked on the Age of Expositions, the era of show-stopping extravaganzas that took place in the last decades of the 19th century and into the 20th in Paris, Chicago, Buffalo and St. Louis. At every venue, Tiffany won the highest honors and recognition as the undisputed leader in the world of jewels. The company’s exhibit at the 1889 Paris fair was heralded as “the most extraordinary collection of jewels ever produced by an American jewelry house.” Tiffany produced an equally praiseworthy collection for the 1900 Paris fair, along with magnificent silver pieces based on Native American pottery and basket designs. The unprecedented commendation and number of awards bestowed on the jeweler led to Tiffany’s appointment as Imperial Jeweler and Royal Jeweler to the crowned heads of Europe, as well as the Ottoman Emperor and the Czar and Czarina of Russia.

Tiffany & Co. - an example of their simple and elegant desgin (ring on box) With the death of Charles Lewis Tiffany in 1902, Louis Comfort Tiffany, the founder’s son, became Tiffany’s first Director of Design. An entire floor of Tiffany & Co. was devoted to merchandise crafted in the Tiffany Studios, Louis Comfort Tiffany’s atelier. His position as America’s leading designer was well established by 1882, when President Chester Arthur invited him to redecorate the White House. By 1900 the younger Tiffany was a world leader in the Art Nouveau and Arts and Crafts movements. The famed artist created a remarkable range of designs, from technically brilliant leaded glass to colorful Tiffany favrile glass, and enameled and painterly jewels based on American plants and flowers.

Throughout the jeweller’s history, the most prominent members of American society were frequent Tiffany customers. Vanderbilts, Astors, Whitneys and Havemeyers, as well as J.P. Morgan, F. Scott Fitzgerald and Paul Mellon, commissioned Tiffany to produce gold and silver services. Admirers of Lillian Russell ordered a sterling silver bicycle. President Lincoln purchased a seed pearl necklace for his wife, Mary Todd Lincoln. And a young Franklin Roosevelt purchased a Tiffany engagement ring in 1904.

As the twentieth century progressed, Tiffany designs captured the spirit of the times, from the extravagance of the 1920s to the modernism of the 1930s and the aerodynamic age of the 1940s and 1950s. Tiffany china set the stage for White House dinners and Tiffany jewels accented the elegant clothes of the world’s most glamorous women, including Jacqueline Kennedy Onassis, Babe Paley and Diana Vreeland. Very often world-renowned jeweller Jean Schlumberger created their jewelry. Hired in 1956 by then Tiffany chairman Walter Hoving, Schlumberger’s lavish, nature-inspired jewels remain the pride of Tiffany & Co.

Throughout Tiffany’s history, the United States and foreign governments have called upon the company to create special commissions. Among them are the Congressional Medal of Honor, the United States’ highest military award; and the 1885 redesign of the Great Seal of the United States, which can be seen on official government documents as well as on the one-dollar bill. As well, business and professional organizations have also called on Tiffany design expertise through Tiffany Business Sales. The most famous of these commissions is the Vince Lombardi Trophy for the National Football League Super Bowl Championship. Tiffany has had the distinction of creating this original and well-known design since the first Super Bowl in 1967.

Tiffany & Co. Today – Success Built on Clarity of Brand

Today, Tiffany & Co. is a public company worth about US$5.4 billion, whose stock trades on the New York Stock Exchange under the symbol NYSE:TIF. As of fiscal year end 2008, it operated 208 stores across North America, Asia-Pacifc, and Europe and did robust business via the internet that produced US$220 million in profits on sales of US$2.9 billion with 87% of its sales coming from jewelry.

Tiffany & Co. success today is the product of a strong business. They have long been a legend in the jewellery business enjoying a strong, well defined brand based on offering premium goods, especially in the jewellery category, where they enjoy enduring popularity based on offering jewellery well earned reputation for stunning classic design, excellent craftsmanship and very high quality.

How Tiffany & Co. Maintains Its Brand

In the eyes of its management, the Tiffany & Co. brand (the Brand) is the single most important asset of the company. The strength of their Brand goes beyond the trademark rights they have to their name, the distinctive blue ‘robin egg’ colour of their product packaging, the Tiffany Blue Jewellery Pouch, and the Tiffany Blue Box. Inherent to their company’s brand strength is the ongoing management of the ‘Brand’ through the regular monitoring of consumer perception and evolving preference using focus groups and survey research.

Tiffany’s management believes that consumers associate the Brand with high-quality gemstone jewellery, particularly diamond jewellery; excellent customer service; an elegant store and online environment; upscale store locations; “classic” product positioning; distinctive and high-quality packaging materials (most significantly, the Tiffany & Co. blue box); and sophisticated style and romance.

Tiffany’s business plan includes many expenses and strategies to maintain the strength of the Brand. Stores must be staffed with knowledgeable professionals to provide excellent service. Elegant store and online environments increase capital and maintenance costs. Display practices require sufficient store footprints and lease budgets to enable Tiffany to showcase fine jewellery in a retail setting consistent with the Brand’s positioning. Stores in the best “high street” and luxury mall locations are more expensive and difficult to secure, but reinforce the Brand’s luxury connotations through association with other luxury brands. By the same token, over-proliferation of stores, or stores that are located in second-tier markets, can diminish the strength of the Brand. The classic positioning of Tiffany’s product line supports the Brand, but limits the display space that can be afforded to fashion jewellery. Tiffany’s packaging practices support consumer expectations with respect to the Brand and are more expensive. Some advertising is done primarily to reinforce the Brand’s association with luxury, sophistication, style and romance, while other advertising is primarily intended to increase demand for particular products. Maintaining its position within the high-end of the jewellery market requires Tiffany to invest significantly in diamond and gemstone inventory and accept reduced overall gross margins, and accept that some consumers will view Tiffany as beyond their price range.

All of the foregoing requires management to make tradeoffs between business initiatives that might generate incremental sales and profits and Brand maintenance objectives. This is a dynamic process. To the extent that management deems that product, advertising or distribution initiatives will unduly and negatively affect the strength of the Brand, such initiatives have been and will be curtailed or modified appropriately. At the same time, Brand maintenance suppositions are regularly questioned by management to determine if the tradeoff between sales and profit is truly worth the positive effect on the Brand. At times, management has determined, and will in the future determine, that the strength of the Brand warranted, or that it will permit, more aggressive and profitable distribution and marketing initiatives. A key part of maintaining the strength of the Brand requires that Tiffany make superior customer service a top priority, which it achieves by employing highly qualified sales and customer service professionals and maintaining ongoing training programs. [emphasis added above to draw readers attention to important lessons for management - article author]

How & Why I Know About Tiffany & Co.

You may wonder how it is that I (as a guy) know about and appreciate Tiffany & Co. Well, that because my wife, my daughter, and my daughter-in-law are and have been their loyal, repeat customers for some time now. Beyond that, my father (a longtime lover of fine things including jewellery) liked taking my mother to Tiffany’s famous store on 5th Avenue when they made frequent trips to New York on business and to see my Grandmother there. So, as you now know, I grew up seeing the famous Tiffany Blue Box and the smiles and atmosphere of elegance it could produce.

Related Web Links:

Tiffany & Co. Web Site
– where you can shop on line

Tiffany & Co. Investor Information
– check out where TIF is trading at today

Tiffany & Co. March 2009 SEC 10-K Filing
– detailed business overview of company

© Blog.TonyJohnston.biz & Compass North Inc. 2010

Article by –

Tony Johnston, CMC, CGA, MBA, BA (Econ)
President
Compass North Inc.
18 Balding Court
Toronto ON
M2P 1Y7
Office: 416-342-5652
Mobile: 416-346-4140
www.CompassNorthInc.com
www.CNiRapidResearch.com

Tony Johnston is a business results specialist, top level executive and management advisor. Having successfully led 4 turnarounds and with many significant operations, deal making and finance oriented accomplishments to his credit, Tony helps companies drive:

› top line growth (revenue)
› bottom line improvement (profits)
› cashflow management (credit line control)
› growth strategy (more / new)
› financing & stakeholder relationship management (debt / equity)
› enterprise value maximization (mkt price)
› acquisition planning & execution (find / close)
› divestiture preparation & execution (prep / negotiate)
› information gathering (competitive intel / market research)
› crisis control (turnarounds & wind-downs)
› enterprise leadership (CEO / CRO / CFO)

Compass North Inc. is a management & advisory services firm that helps companies achieve important, challenging operational, financial and transaction oriented goals. Examples of what we do include helping companies and their owners:

– make better decisions by providing customized competitive intelligence,
– grow by crafting strategic plans and implement them,
– get turned around by dealing with their debt or other business problems,
– borrow more money and/or raise more equity, and
– plan, prepare, negotiate and close acquisitions, divestitures and ownership
transitions.

Bottom-line: The benefit that Tony and Compass North Inc. deliver is helping company owners maximize both what they earn while they own their business and what they bank when they sell.

> Follow me on Twitter @CompassNorthInc

Comments

2 Responses to “How to Succeed Like TIFFANY & CO.”

BizSugar.com
February 28th, 2010 @ 8:21 pm

How to Succeed Like TIFFANY & CO. | Biz Money Matters |…

Want more revenue? Well, harness the power of brand focus, clarity, simplicity, and utility by benchmarking yourself to Tiffany & Co. so you can gauge your offering’s sales & marketing strength and how to improve it. Read this article to understand how…
Skip Anderson
March 1st, 2010 @ 5:02 pm

“…focus, clarity, simplicity, and utility” indeed! Yes, so true with Tiffany & Co and so true with your article as well. Inspiring writing, my friend. Thank you for the finely crafted, focused, clear, simple, helpful post.

Skip Anderson

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Tony Johnston
President
Compass North Inc.

Tony provides executive management and advisory services that help companies get MORE !!

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Tony delivers the leadership or leadership support needed that can make remarkably outstanding results happen operationally, economically, financially and in the eyes of customers, lenders & transaction counterparties.

If you are a decision maker in a company that wants MORE, give him a call at 416-342-5652 or check out the Compass North Inc website [click here].

Tony's ability to help companies achieve important/challenging goals is well demonstrated by his long record of success, which includes:
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  in 2 years delivered for
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- 1 successful company IPO
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