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How the brand creates value

Neuropsychologist Dr. Christian Scheier and me, Hans-Christian Schwingen (Ex-Chief Brand Officer Deutsche Telekom) talking about the power of the implicit and the reinvention of the Telekom brand, about unconscious purchasing decisions and the continuing relevance of "Life is for sharing.". (This is an excerpt from the corporate book "Brand Driven Progress": https://book.telekom.com/order.)

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98 Brand-Driven Progress
Hans-Christian Schwingen, Chief Brand
Officer at Deutsche Telekom from
2007 to 2020, and neuropsychologist
Dr. Christian Scheier talk about the
power of the implicit and the reinvention
of the Telekom brand, about unconscious
purchasing decisions and the continuing
relevance of “Life is for sharing.”.
HOW THE
BR AND
CREA TES
VAL UE.
HOW THE
BR AND
CREA TES
VAL UE.
Brand-Driven Progress 99
HOW THE
BR AND
CREA TES
VAL UE.
HOW THE
BR AND
CREA TES
VAL UE.
100 Brand-Driven Progress
Why brands are important
Brands help us to make sense of the multitude of
offerings on the market and choose the one that
is right for us – quickly and reliably, without
having to deliberate for hours. By using certain
brands - and rejecting others - we are expressing
our personal identity, our views and values.
Brands also facilitate our access to new and
complex products – products that we would not
initially trust if they did not come from our favorite
brand. The importance of the brand for a purchas-
ing decision is particularly significant if we are
not able to verify supposedly rational purchasing
criteria or can only do so to a certain extent.
H.-C. Schwingen: When I joined
Deutsche Telekom, brand man-
agement was spiraling out of
control. New technologies and
products as well as numerous
sub-brands and claims made it
difficult to get an overview – for
customers and employees alike.
Back then, nobody knew what
Telekom actually stood for. To be
taken seriously as an innovative
full-service provider, we therefore
not only needed a harmonized
brand, but also realignment of
the content. How much stamina
is required for such a massive
undertaking?
Dr. C. Scheier: Put it like this,
building up a brand requires
longterm consistency. Commu-
nicating a brand promise in a
credible manner is therefore not
a sprint, but rather a marathon.
In the case of “Life is for sharing.”,
the long-term sustainability of the
positioning already has a good
basis, as the claim addresses a
genuine basic human need: We
like to be connected with others
and we want to share what’s
important to us – with those
most important to us. It is about
a shared, enriching experience.
Schwingen: That is precisely why
we have been successfully oper-
ating with the “Life is for sharing.”
claim for more than 10 years. We
have achieved our envisaged goal
of sustainably anchoring Telekom’s
brand promise. One reason for
this is, without a doubt, the com-
plete realignment of the brand. At
the time, we aimed to think of the
products and brand from the cus-
tomer’s perspective in particular:
In other words, putting the focus
on people instead of technology.
However, this change in perspec-
tive from a technology brand to
an experience brand is also based
on neuropsychological findings.
Should these not also be consid-
ered when developing a brand?
Scheier: Certainly. We are now
fully aware of how purchasing
decisions are taken and what
role brands play in this process.
Bringing products into harmony
with this allows a brand to tap
into its full sales-promoting
potential. Our brain always
regards product features such
as the price and performance in
the context of the brand. As such,
sales and the brand are two sides
of the same coin. Here, brands
create an additional, psychologi-
cal value, which influences con-
sumer behavior if they perceive
it as a reward.
Schwingen: We all assume that
we always make our purchasing
decisions on a purely rational
basis, by assessing obvious char-
acteristics and comparing them
with other products. In reality,
however, we are also guided by a
brand’s additional value proposi-
tion. And, more often than not,
subconsciously, wouldn’t you
agree?
Scheier: Definitely! When a pur-
chasing decision is taken, the
majority of the information is
processed intuitively: In tech-
nical jargon, we say “implicitly”,
unreflected. Just like an airplane,
there are two instances in our
brain: the pilot and the autopilot.
The pilot consciously controls
the difficult elements such as
takeoff and landing, while leav-
ing the remainder of the flight to
the autopilot, which works intui-
Brand-Driven Progress 101
In an electric good store, for example, we can-
not test whether the television delivers the
promised quality. However, the brand gives us
the green light for our decision – and rewards
us with the good feeling of having made the
right choice.
If brands are useful for people in this way, they
create added value for the company: A strong
brand continuously helps to sell more products
at a higher price, acquire new customers, and
convince investors. For Deutsche Telekom, the
brand is thus one of the central value drivers.
also only humans following their
own implicit goals. Information
processing and reward mecha-
nisms in the brain function in the
same way as they do in private
consumption, even if the context
is different. In B2B scenarios, it is
more regularly a question of
group decisions and, conse-
quently, the risk of losing face
should you take the wrong deci-
sion. A trustworthy, strong brand
such as Telekom plays a relevant
role here as it minimizes the deci-
sion-making risk. As such, it con-
veys a good feeling of making the
right decision for one’s own pro-
fessional success.
Schwingen: In our case, this
would also mean that it is not
only the technical solution or the
price which influences our busi-
ness customers’ purchasing deci-
sion, but to a far greater extent
added value going beyond the
functional advantages of the
products: for example, a trusted
partnership. For the end cus-
tomer, the added value would be
the connection to other people
made possible by our technology.
How is this added value reflected
in neurosciences?
Scheier: In neuropsychology, we
refer to this as the “higher goal”.
Our brain always regards
product features such as
the price and performance
in the context of the brand.
Dr. Christian Scheier
tively in the background. We
humans buy products primarily
based on their basic functional
benefits. Additionally, however, a
product’s brand also addresses
“higher goals” and generates an
implicit added value in the form
of a reward in the autopilot. This
influences our decision signifi-
cantly. In short: We all have
implicit goals of which we are
often not aware. If products serve
these superordinate goals, it is
highly probable that we will pur-
chase them. The important thing
is to understand the relevant
goals of a category such as sta-
tus, a feeling of security, or
adventure and to address these
specifically.
Schwingen: It is also interesting
that there does not seem to be
any difference between the pri-
vate and business customer sec-
tors in this context. Many people
think that business customers
take decisions on a purely rational
basis because they are acting on
behalf of the company, whereas –
if at all – only private consumers
are guided by irrational motives.
What does science have to say on
this matter?
Scheier: Yes, indeed, that is
something of a myth that we
come up against time after time.
However, business customers are
102 Brand-Driven Progress
Hans-Christian Schwingen
has supported the repositioning of
Deutsche Telekom significantly as
the Chief Brand Officer since 2007.
His brand strategy for the company
is aimed at evolving the company
from an infrastructure provider
into a digital lifestyle brand.
The focus of his activities is on the
connection of products, services,
and content with the brand promise
“Life is for sharing.”.
In the case of “Life is for sharing.”,
these are togetherness, participa-
tion, and special moments with
people who are important to us.
The technology, the product, and
the device are ultimately only a
means to an end. Neuroeconomic
studies have shown that brands
can result in more sales, higher
prices, and increased loyalty in
this way – and, as such, increase
profitability for companies in the
long run. Successful communica-
tion starts with customers’
“higher goals”.
Dr. Christian Scheier is one of
the few neuropsychologists
worldwide to combine research
and practical expertise in the
field of marketing consultancy.
He has authored numerous
standard academic works such as
“Wie Werbung wirkt. Erkenntnisse
des Neuromarketings” (How
advertising works, findings from
neuromarketing)
(Haufe, 3rd
Edition 2018).
Brand management is thus not an
end in itself. In the long term, it
can contribute to economic suc-
cess if companies unearth the
true benefit of their products.
Consequently, the change in per-
spective at Telekom was both
right and important.
Schwingen: This change required
a great deal of internal persuasion.
However, a change in perspective
is not just a question of theory. It
has to be realized, brought to life
and made convincing, especially
in the early stages. With the Paul
Potts campaign, we were able to
touch and inspire customers and
employees alike in 2008. We
demonstrated what Telekom
stands for in an understandable
and authentic manner: participa-
tion, access to digital opportuni-
ties, and togetherness. The posi-
tive feedback was overwhelming
and we made enormous progress
in our evolution from a technology
brand to an experience brand.
After a good two years, every divi-
sion was working with the new
Brand-Driven Progress 103
claim as a matter of course –
initially on the domestic market.
The next step was the consistent
roll-out of the new positioning in
other markets. And we began
looking at the question: What
is the best way to transfer this
brand core to other countries
and culture groups?
Scheier: Not by translating the
claim stubbornly word for word.
Instead, it is better to transpose
the sense behind it into the local
language based on the brand
concept. This approach also
allows for intercultural aspects.
In “Life is for sharing.”, the focus
is clearly on the aspect of sharing.
The German claim “Erleben, was
verbindet.” shifts the focus to
the effect, in other words the out-
come – the connection between
people. However, the common
denominator is always access to
and participation in the experi-
ence of sharing something of
importance and feeling close to
one another as a result. Beyond
the claim, Telekom’s positioning
in each country also addresses
the people’s relevant higher goal
and thus influences their purchase
decisions.
Schwingen: It is precisely this
desire for connection and inter-
personal exchange that we wanted
to promote with our claim. The
emergence and growing popu-
larity of social media and the
sharing economy also play an
important role in the continuing
relevance of our brand promise
“Life is for sharing.”. Are there
any negative associations linked
to the term “sharing”?
Scheier: Yes. Data privacy and
data protection, unresolved legal
situations in the sharing economy,
and worries about Internet crime
are hotly discussed topics. In light
of this, it is of central importance
to Telekom to position itself as a
trustworthy companion in this
complex and sometimes even
confusing digital world. Telekom
customers must be able to rely
on being provided with simple,
reliable, and fair products without
any boundaries or limits. This is
the real currency in the digital
era. Telekom is a guarantor for
unrestricted access to the oppor-
tunities of digitalization.
Schwingen: Looking back, the
realignment of the brand has
simplified many things for our
customers. They now know that
wherever there’s a “T”, there’s
Telekom. Today, they receive
everything from a single source,
in the best network, associated
with a wide range of advantages.
With our products, our customers
can fulfill their wishes for connec-
tions and the experiencing and
sharing of special moments. The
brand message has become a
central element of the corporate
strategy. Our employees identify
with the Telekom brand and liter-
ally embody the claim. However,
times and trends evolve at light-
ning speed. How can we preserve
the relevance of our brand?
Scheier: Focusing on new trends
every day rapidly results in
actionism – but rarely helps one
achieve the set goal. If the core of
the brand is harmonious and well
defined, it can react flexibly to
developments. One example is
the social development of recent
years – the increasing egoism of
some states and their tendency
to turn their backs on the rest of
the world, the challenging of
international institutions right up
to the construction of new walls.
The Telekom brand contradicts all
the above diametrically causing
the company to further consoli-
date its market position. Today,
Telekom sees itself more than
ever as a “We” brand, which does
not divide people but rather
brings them together and breaks
down barriers and walls by facili-
tating dialog and exchange. It
connects people with the possi-
bilities of digitalization. The brand
has carried these aspects within
it right from the beginning and
can react to changed social
framework conditions – however,
the core remains the same.
This proves that the concept
functions in the long term without
losing any relevance. This is pre-
cisely what distinguishes strong
brands.

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How the brand creates value

  • 1. 98 Brand-Driven Progress Hans-Christian Schwingen, Chief Brand Officer at Deutsche Telekom from 2007 to 2020, and neuropsychologist Dr. Christian Scheier talk about the power of the implicit and the reinvention of the Telekom brand, about unconscious purchasing decisions and the continuing relevance of “Life is for sharing.”. HOW THE BR AND CREA TES VAL UE. HOW THE BR AND CREA TES VAL UE. Brand-Driven Progress 99 HOW THE BR AND CREA TES VAL UE. HOW THE BR AND CREA TES VAL UE.
  • 2. 100 Brand-Driven Progress Why brands are important Brands help us to make sense of the multitude of offerings on the market and choose the one that is right for us – quickly and reliably, without having to deliberate for hours. By using certain brands - and rejecting others - we are expressing our personal identity, our views and values. Brands also facilitate our access to new and complex products – products that we would not initially trust if they did not come from our favorite brand. The importance of the brand for a purchas- ing decision is particularly significant if we are not able to verify supposedly rational purchasing criteria or can only do so to a certain extent. H.-C. Schwingen: When I joined Deutsche Telekom, brand man- agement was spiraling out of control. New technologies and products as well as numerous sub-brands and claims made it difficult to get an overview – for customers and employees alike. Back then, nobody knew what Telekom actually stood for. To be taken seriously as an innovative full-service provider, we therefore not only needed a harmonized brand, but also realignment of the content. How much stamina is required for such a massive undertaking? Dr. C. Scheier: Put it like this, building up a brand requires longterm consistency. Commu- nicating a brand promise in a credible manner is therefore not a sprint, but rather a marathon. In the case of “Life is for sharing.”, the long-term sustainability of the positioning already has a good basis, as the claim addresses a genuine basic human need: We like to be connected with others and we want to share what’s important to us – with those most important to us. It is about a shared, enriching experience. Schwingen: That is precisely why we have been successfully oper- ating with the “Life is for sharing.” claim for more than 10 years. We have achieved our envisaged goal of sustainably anchoring Telekom’s brand promise. One reason for this is, without a doubt, the com- plete realignment of the brand. At the time, we aimed to think of the products and brand from the cus- tomer’s perspective in particular: In other words, putting the focus on people instead of technology. However, this change in perspec- tive from a technology brand to an experience brand is also based on neuropsychological findings. Should these not also be consid- ered when developing a brand? Scheier: Certainly. We are now fully aware of how purchasing decisions are taken and what role brands play in this process. Bringing products into harmony with this allows a brand to tap into its full sales-promoting potential. Our brain always regards product features such as the price and performance in the context of the brand. As such, sales and the brand are two sides of the same coin. Here, brands create an additional, psychologi- cal value, which influences con- sumer behavior if they perceive it as a reward. Schwingen: We all assume that we always make our purchasing decisions on a purely rational basis, by assessing obvious char- acteristics and comparing them with other products. In reality, however, we are also guided by a brand’s additional value proposi- tion. And, more often than not, subconsciously, wouldn’t you agree? Scheier: Definitely! When a pur- chasing decision is taken, the majority of the information is processed intuitively: In tech- nical jargon, we say “implicitly”, unreflected. Just like an airplane, there are two instances in our brain: the pilot and the autopilot. The pilot consciously controls the difficult elements such as takeoff and landing, while leav- ing the remainder of the flight to the autopilot, which works intui- Brand-Driven Progress 101 In an electric good store, for example, we can- not test whether the television delivers the promised quality. However, the brand gives us the green light for our decision – and rewards us with the good feeling of having made the right choice. If brands are useful for people in this way, they create added value for the company: A strong brand continuously helps to sell more products at a higher price, acquire new customers, and convince investors. For Deutsche Telekom, the brand is thus one of the central value drivers. also only humans following their own implicit goals. Information processing and reward mecha- nisms in the brain function in the same way as they do in private consumption, even if the context is different. In B2B scenarios, it is more regularly a question of group decisions and, conse- quently, the risk of losing face should you take the wrong deci- sion. A trustworthy, strong brand such as Telekom plays a relevant role here as it minimizes the deci- sion-making risk. As such, it con- veys a good feeling of making the right decision for one’s own pro- fessional success. Schwingen: In our case, this would also mean that it is not only the technical solution or the price which influences our busi- ness customers’ purchasing deci- sion, but to a far greater extent added value going beyond the functional advantages of the products: for example, a trusted partnership. For the end cus- tomer, the added value would be the connection to other people made possible by our technology. How is this added value reflected in neurosciences? Scheier: In neuropsychology, we refer to this as the “higher goal”. Our brain always regards product features such as the price and performance in the context of the brand. Dr. Christian Scheier tively in the background. We humans buy products primarily based on their basic functional benefits. Additionally, however, a product’s brand also addresses “higher goals” and generates an implicit added value in the form of a reward in the autopilot. This influences our decision signifi- cantly. In short: We all have implicit goals of which we are often not aware. If products serve these superordinate goals, it is highly probable that we will pur- chase them. The important thing is to understand the relevant goals of a category such as sta- tus, a feeling of security, or adventure and to address these specifically. Schwingen: It is also interesting that there does not seem to be any difference between the pri- vate and business customer sec- tors in this context. Many people think that business customers take decisions on a purely rational basis because they are acting on behalf of the company, whereas – if at all – only private consumers are guided by irrational motives. What does science have to say on this matter? Scheier: Yes, indeed, that is something of a myth that we come up against time after time. However, business customers are
  • 3. 102 Brand-Driven Progress Hans-Christian Schwingen has supported the repositioning of Deutsche Telekom significantly as the Chief Brand Officer since 2007. His brand strategy for the company is aimed at evolving the company from an infrastructure provider into a digital lifestyle brand. The focus of his activities is on the connection of products, services, and content with the brand promise “Life is for sharing.”. In the case of “Life is for sharing.”, these are togetherness, participa- tion, and special moments with people who are important to us. The technology, the product, and the device are ultimately only a means to an end. Neuroeconomic studies have shown that brands can result in more sales, higher prices, and increased loyalty in this way – and, as such, increase profitability for companies in the long run. Successful communica- tion starts with customers’ “higher goals”. Dr. Christian Scheier is one of the few neuropsychologists worldwide to combine research and practical expertise in the field of marketing consultancy. He has authored numerous standard academic works such as “Wie Werbung wirkt. Erkenntnisse des Neuromarketings” (How advertising works, findings from neuromarketing) (Haufe, 3rd Edition 2018). Brand management is thus not an end in itself. In the long term, it can contribute to economic suc- cess if companies unearth the true benefit of their products. Consequently, the change in per- spective at Telekom was both right and important. Schwingen: This change required a great deal of internal persuasion. However, a change in perspective is not just a question of theory. It has to be realized, brought to life and made convincing, especially in the early stages. With the Paul Potts campaign, we were able to touch and inspire customers and employees alike in 2008. We demonstrated what Telekom stands for in an understandable and authentic manner: participa- tion, access to digital opportuni- ties, and togetherness. The posi- tive feedback was overwhelming and we made enormous progress in our evolution from a technology brand to an experience brand. After a good two years, every divi- sion was working with the new Brand-Driven Progress 103 claim as a matter of course – initially on the domestic market. The next step was the consistent roll-out of the new positioning in other markets. And we began looking at the question: What is the best way to transfer this brand core to other countries and culture groups? Scheier: Not by translating the claim stubbornly word for word. Instead, it is better to transpose the sense behind it into the local language based on the brand concept. This approach also allows for intercultural aspects. In “Life is for sharing.”, the focus is clearly on the aspect of sharing. The German claim “Erleben, was verbindet.” shifts the focus to the effect, in other words the out- come – the connection between people. However, the common denominator is always access to and participation in the experi- ence of sharing something of importance and feeling close to one another as a result. Beyond the claim, Telekom’s positioning in each country also addresses the people’s relevant higher goal and thus influences their purchase decisions. Schwingen: It is precisely this desire for connection and inter- personal exchange that we wanted to promote with our claim. The emergence and growing popu- larity of social media and the sharing economy also play an important role in the continuing relevance of our brand promise “Life is for sharing.”. Are there any negative associations linked to the term “sharing”? Scheier: Yes. Data privacy and data protection, unresolved legal situations in the sharing economy, and worries about Internet crime are hotly discussed topics. In light of this, it is of central importance to Telekom to position itself as a trustworthy companion in this complex and sometimes even confusing digital world. Telekom customers must be able to rely on being provided with simple, reliable, and fair products without any boundaries or limits. This is the real currency in the digital era. Telekom is a guarantor for unrestricted access to the oppor- tunities of digitalization. Schwingen: Looking back, the realignment of the brand has simplified many things for our customers. They now know that wherever there’s a “T”, there’s Telekom. Today, they receive everything from a single source, in the best network, associated with a wide range of advantages. With our products, our customers can fulfill their wishes for connec- tions and the experiencing and sharing of special moments. The brand message has become a central element of the corporate strategy. Our employees identify with the Telekom brand and liter- ally embody the claim. However, times and trends evolve at light- ning speed. How can we preserve the relevance of our brand? Scheier: Focusing on new trends every day rapidly results in actionism – but rarely helps one achieve the set goal. If the core of the brand is harmonious and well defined, it can react flexibly to developments. One example is the social development of recent years – the increasing egoism of some states and their tendency to turn their backs on the rest of the world, the challenging of international institutions right up to the construction of new walls. The Telekom brand contradicts all the above diametrically causing the company to further consoli- date its market position. Today, Telekom sees itself more than ever as a “We” brand, which does not divide people but rather brings them together and breaks down barriers and walls by facili- tating dialog and exchange. It connects people with the possi- bilities of digitalization. The brand has carried these aspects within it right from the beginning and can react to changed social framework conditions – however, the core remains the same. This proves that the concept functions in the long term without losing any relevance. This is pre- cisely what distinguishes strong brands.