You’ll be shocked when you learn the Rolls Royce and Bentley sale details and what was sold, licensed, and protected. An epic story of Brand.

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Dave Young:
I’m Dave Young, alongside Stephen Semple here for another episode of the Empire Builders podcast. And Stephen, we’re going upscale today. Huh? Rolls Royce.

Stephen Semple:
We’re going highfalutin. Yep. Going to talk about Rolls Royce.

Dave Young:
Should I be looking out my window to see when it’s going to come pick me up? Because we should be recording this in the Rolls Royce, shouldn’t we?

Stephen Semple:
That would be fun, wouldn’t it? That would be fun.

Dave Young:
Wouldn’t it?

Stephen Semple:
Yeah. Have you ever had a chance to ride in a Rolls Royce?

Dave Young:
I may have one time.

Stephen Semple:
They are beautiful. But here’s the interesting thing about Rolls Royce. You know how we often talk about brands having a value in that there’s a value to the brand, and there’s a value to the name and all those things. It’s very difficult to actually quantify what that value is. But here’s an interesting example in Rolls Royce. Because back in 1998, Vicker sold Rolls Royce. Now, here’s the thing, Rolls Royce was two brands. There was Rolls Royce and Bentley. And Vickers sold Bentley to VW. So, Volkswagen bought Bentley for 430 million pounds. And this included Bentley and all of the assets of Rolls Royce. So that includes the plant, the people, everything else, but it did not include the Rolls Royce name. Vickers refused to sell the Rolls Royce name to Volkswagen. And if we go back to episode 21, there may be some hints in terms of how the British felt about Volkswagen specifically.

Dave Young:
Yeah. Exactly. Right? And Vickers and Rolls Royce made all these big Rolls Royce V12s for the World War II fighters. Yeah. I can see a little hesitancy in not turning over the brand Rolls Royce to the Germans.

Stephen Semple:
Well specifically Volkswagen, but here’s the thing. So the name and the logo was bought by BMW.

Dave Young:
Also German, but not Volkswagen.

Stephen Semple:
Yeah. So, here’s an interesting sale where one company buys Bentley and all the plants, and equipment, and real estate, and assets. And the other just buys the name and the logo. That’s all they got and they paid 40 million pounds for it. So a really interesting example of the fact that there really and truly is a value in a brand.

Dave Young:
And they had to not reinvent, but rediscover what a Rolls Royce car was after that. Right? It becomes not what it was.

Stephen Semple:
They had to build a whole factory. Now, the interesting thing is there was this three-year transition period where Volkswagen could continue to make cars for BMW and things like that. But what always gets me thinking, it’s really interesting, as soon as a business starts to stumble or whatever, what’s the first thing that they do is they go, well, let’s cut expenses. And what’s often one of the first expense that gets cut is marketing and brand building. And it’s interesting how businesses view that as being an expense when in fact a brand has value.

And the other thing that also amazes me is they’ll buy a piece of equipment, and that piece of equipment is an asset even though it makes nothing. If it doesn’t work, if there’s not things going through it and it depreciates. One is an investment and the other is an expense and it’s one of those things that’s always bothered me a little bit because I’ve always looked at and I said, brands do have value. And when I came across this, I thought that’s really, really interesting because Volkswagen paid 430 million pounds and got all these assets and BMW paid 40 million just for the name and the logo.

Dave Young:
When you think about that in terms of the average business, trying to build a brand, right? And you talk about marketing as an investment, and I think you have to look at it as what kind of marketing, what kind of advertising are we talking about in terms of brand building? If your idea of advertising and marketing is just transactional messaging, right? Sales, price, and item, we can undercut our competitors. I don’t view that as building or investing in an asset like a brand name, right? I think in some ways if that’s the only thing you’re doing, you’re deteriorating your brand, you’re wearing it out. And this is a great proof of that, right? When BMW just got the name, right, they were buying that equity that had been built up over decades. And in order to capitalize on it, it had to actually produce something that stood up to the name. But to protect that brand, you don’t just start slapping a Rolls Royce sticker on a BMW.

Stephen Semple:
Correct.

Dave Young:
That would be the incorrect way of doing it. And we’ve seen car companies learn that lesson the hard way.

Stephen Semple:
And there’s two parts of a Rolls Royce that are very, very important to the brand. And one is the grill. The Rolls Royce grill is a very distinctive grill. Will Vickers retain control of the grill? So in other words BMW is not allowed to change the grill.

Dave Young:
They can’t change it?

Stephen Semple:
Can’t change it.

Dave Young:
Fascinating. Okay.

Stephen Semple:
The other is, and there’s a fun tie-in to the Wizards Academy on this. The other is the spirit of ecstasy, the hood ornament. Now, the reason why I say there’s a fun Wizard Academy tie into this is that the statue that the spirit of ecstasy hood ornament is based upon is actually at Wizard Academy. And David, you should take a picture of yourself standing next to it. We can post that on the show note.

Dave Young:
I will do that. She’s standing in the Welcome Center right now.

Stephen Semple:
Yeah. Those two things are licensed to BMW to use, but BMW cannot make changes to them.

Dave Young:
Oh. That’s fascinating.

Stephen Semple:
But it’s interesting, earlier, you’re making also a comment about transactional versus brand style advertising. And we’ve talked in the past about David Ogilvy, who was a very, very famous ad guy, and David Ogilvy, at one point, did some ads for Rolls Royce. And it’s really interesting because a lot of places would do the features and the benefits and things along that lines. And what David Ogilvy always did great in his writing was not telling people, but making them feel it. So not telling them that it’s luxurious or it’s quiet, but making them feel the luxury or the quiet.

Dave Young:
Even in a print ad. I know the ad you’re talking about.

Stephen Semple:
Oh. Yeah. Even in a print ad. Because this is a print ad and I love this headline from this one print ad that he did for Rolls Royce. And it was at 69 miles an hour the loudest noise in this new Rolls Royce is from the electric clock.

So, he made you feel the quiet?

Dave Young:
Right? Without saying, you won’t hear the wind, you won’t feel the rumble of the road. You won’t hear a truck go by. He says, no, the loudest thing in the car is the clock. And maybe, if you’re skeptical like me, you go, what kind of loud arse clock is that?

Stephen Semple:
But the other thing that’s incredible in this ad is he also could have said at highway speed, but what we know is specifics are better than generalities. He named the speed, but then instead of being 60 miles an hour or 70 miles an hour, an unusual description, 69 miles an hour.

Dave Young:
Yeah.

Stephen Semple:
69 miles an hour. This remarkable headline that just really draws you in and makes you feel that quiet. But that’s also brand building because it’s not feature benefit. It’s not a sale. It’s none of those things. It’s this, wow, that’s how luxurious this vehicle is.

Dave Young:
An amazing example of the power of good writing. Right? To show instead of tell. Even in a print ad, that’s a way of showing it, right? Because we can envision ourselves in the back of a car. We know what that’s like. Right? We’ve all been in the backseat of a car, but the Rolls Royce typically chauffeured, right?

Stephen Semple:
Yes.

Dave Young:
And so, to make that claim is something that is a bit of a mind blowing thing for most of us. So, yeah.

Stephen Semple:
And there’s an interesting side story about this Ogilvy ad because coming up with good copy also takes time. So, for example, when we take on a client, we do this long uncovery process, and I know, often clients are like, can’t I just hire a copywriter and sit down with somebody for an hour and get some good copy written? David Ogilvy, in his book, Ogilvy in Advertising, talks about this ad. And one of the things he talks about has how he spent several days at Rolls Royce, and he had nothing. And he was walking out the door, and he literally had a chat with a mechanic, and the mechanic made this comment, and that became the ad.

Dave Young:
It’s one of my favorite parts of what we call our uncovery process is looking for this unleveraged asset, right? That the company doesn’t even know they’re sitting on. The mechanic knew. The mechanic knew how amazing this was. But the marketing people didn’t, the management didn’t. They may have known, but they didn’t realize that it was something that could be an asset used in proving this statement about the brand.

Stephen Semple:
Right. It’s quiet. It’s this, it’s that. And it was the mechanic who said, yeah, all you hear is the electric clock. The point is, is that great copywriting does not come from sitting down with the client for an hour. It comes from really, really doing these deep dives and this deep uncovery, which lets you find these magic phrases. So, coming up with these things is an investment. It’s a real investment of time. Just a little piece of trivia, originally, with Rolls Royces, it was not always the spirit of ecstasy that was put on the hood. You would get to pick your own thing, and they were customized. So there was a long period of time there where they were different in every car. And then basically, they then landed on it being this one model. And it’s also known as being Eleanor or the silver lady or the flying lady, and it was designed by psychs and there’s a fun story in behind all of it because it was actually someone’s mistress that this was fashioned under.

Dave Young:
There’s always a story there. Right? That’s great.

Stephen Semple:
There’s always a story there.

Dave Young:
So the average business owner, what would you say is the most important lesson from Rolls Royce?

Stephen Semple:
Well, the most important lesson from Rolls Royce is a couple of things in that, yeah, I get that you’re writing checks for marketing, so it feels like an expense. But at the end of the day, when you’re building a brand, it is an asset, and this was proven in this. And we’ve seen it over and over again with clients of ours that have sold their businesses, and they sell their businesses at these premium values, or you’ll also see it when there’s tough economic times, and they will go through these challenging times easier. But it really, and truly is an investment. It does make your business, which is your most important asset, more valuable.

Dave Young:
As long as you keep in mind that your goal in your advertising and marketing should be the highest goal is to become the business that people think of first and feel best about when they finally need what you sell. And if I finally get to the point where I can buy a Rolls Royce, right, they’re going to pop into my head. It’s like, who’s second place?

Stephen Semple:
Right. Yeah. Exactly right. Yeah. So look forward to seeing you riding around in one of those boat tails.

Dave Young:
I’m waiting by my door for you to send it over.

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