#139 - What you can learn from IKEA, Red Bull and Hilti about brand management

Joubin Rahimi

Fantastic that you are with us again for a new episode of insights! My name is Joubin, Joubin Rahimi, and joining me today is Olaf Hartmann. Hello Olaf.

Olaf Hartmann

Yes, hello Joubin.

Joubin Rahimi

I am really glad to have you here. We already got to talk about brand experience over a beer or two or three in the Netherlands. That completely blew me away. And since then you have also written a book. But before we get into that, maybe you would like to say two or three sentences about yourself.

Olaf Hartmann

Yes, gladly. I am happy to be here too. Thank you very much for the invitation. My name is Olaf Hartmann and I am managing director and founder of the Multisense Institut. Multisense is an evidence-based brand consultancy. We specialise in multisensory brand coding. That is also where the work on brand experience and the measurement of brand experience comes from. Evidence-based means that we base our consulting on research. And together with my co-author Uwe Munzinger I run the Markenkraft platform. The Markenkraft platform is about spreading the current state of knowledge on brand research, because a lot has happened there in the last 15, 20 years. And we do that in the form of a podcast, Markenkraft, in the form of talks, in-house workshops, masterclasses. And that is what I spend all day on.

Joubin Rahimi

And in the book you also wrote, among other things, that brand experience should be the operating system of a firm, of a company. And I thought, wow, operating system. As a techie I get that. But why is it such an underlying factor that is actually, from a technical point of view, the basis for everything on the hardware.

Olaf Hartmann

Yes. And at first that creates an intuitive contradiction: a brand, isn't that somehow a subdivision of marketing? That is how many people understand it. And that is a big misconception. Of course it also comes down to the terms brand and marketing. But a brand is not a subdivision of marketing, it is the result of good marketing.

Joubin Rahimi

In English it is different, isn't it?

Olaf Hartmann

Yes, exactly. Brand and marketing are two different things. And the goal of marketing is a brand. Why is that an operating system? Because people drag themselves out of bed in the morning and go somewhere and hopefully do it all with joy, or at least motivated. And that comes out of a construction of meaning. It starts with the salary, of course, but that is not enough to really deliver good performance. That is why our slogan is More sense for stronger brands. Which means the strength of a brand has a lot to do with the construction of meaning, outwards of course, the benefit promise and so on, but inwards as well. Today brands differ very little on the technical level, but they differ through the many thousands of small decisions that are made at work every day. And the operating system, just as with software, influences these decisions, so it creates a structure, a mental structure if you like, within which these decisions are made. And that is what we mean by it. A brand is an ordering principle. So if I know what the performance promise is, what I stand for on the various levels, then it is easier for me to align my own behaviour with it. And when we reach a point, something completely normal in organisations, where we have to decide, then you ask the brand.

Joubin Rahimi

Really interesting, a personal experience, it must be 15 years ago now, with Amazon. We had a hard winter and the parcels simply did not go out on time. At the same time I had ordered something for my mother at Amazon and at QVC. The irony: Amazon has a warehouse right next to the QVC warehouse in Hückelhoven. Called QVC. Yes, can't tell you when it will ship. End of story. Called Amazon. I understand your problem. Really annoying. You know what, I will call the service provider, stay on the line, we will do a conference call. Bang, we had a conference call. And then the service provider DHL explained: we have the goods here, we just can't get the trucks out. But if you come here, we will find it for you. Of course I didn't do that, because the weather was bad. But what stuck with me: QVC did not handle it well, because they simply do not care. Amazon could not do anything about the problem, pulled the partner in, explained it to me, created an option for me, and then I said no of my own accord. And that is somehow this great thing, they have it as a brand too. We take care of you as a customer. You come first, not the logistics provider, not our processes, but you.

Olaf Hartmann

I thought that was really great, a really great example that you picked there, because at the beginning Jeff Bezos was an anti-brand guy who thought a brand was somehow an unnecessary tax on the customer, it has to be paid for, it costs so much money and so on. And today he is a big fan of brands, precisely because he now understands it differently. A brand is not the pretty fluff, the nice images on top or the beautiful logo, but in the end it is exactly what you just described, a deeply understood performance promise. And apparently he does it like this in meetings, if it is still the case today. In any case he did it for a while, it was reported that in all meetings there is always an empty chair.

Joubin Rahimi

That is where the customer sits.

Olaf Hartmann

And that brings us to a very important point, namely that a brand is precisely not the logo or the images. A brand only happens in the customer's head. So what you just described is a memory trace that emerged from an experience you had as a customer. And in the end these memory traces decide, in a moment when you have a need, when you order something the next time, that a certain brand comes to mind more strongly or more quickly and is also linked to associations that create a higher willingness to buy and possibly even a higher willingness to pay. And then you have a brand, and before that you do not have a brand.

Joubin Rahimi

How actively do customers take that on? Do they consciously think, I am buying Adidas now, or how is it in B2B as well? So that is two points again.

Olaf Hartmann

Those are two points.

Joubin Rahimi

Let's start with how actively people do it and how consciously people do it.

Olaf Hartmann

Well, that is something that is deeply researched by now, and it is also the part that has been added in the last 20 years. Daniel Kahnemann was the first psychologist to win the Nobel Prize in Economics. And what did he win it for? He found that our brain has two systems. There is System 1 and System 2. And put more simply, because people always mix them up, pilot and autopilot. And when you ask where the brand happens: do people consciously think, yes, this brand promises me more? No, that all happens unconsciously. That is System 1, and to show how powerful that is, you can grasp it quite well by looking at how much...

Joubin Rahimi

System pilot, do you mean that?

Olaf Hartmann

No, the autopilot. So how many bits does this autopilot in our brain process? While we are talking to each other, our pilot is busy and can process roughly three to four words per second. Consciously. At the same time this autopilot processes 11 million bits. So the three or four words are about 40 bits. And our autopilot processes 11 million bits. And in your case here that is the tone of my voice, the smell in the room, the acoustics and all of that, and it permanently filters these stimuli and builds patterns out of them. And in the end a brand is a constructed pattern. Through the statistics of experiences I have learned a pattern in the end. And when I want to order something the next time, then oddly enough Amazon comes to mind. Not that I consciously think about Amazon, but the experiences I had condense into this pattern, and in the future that influences the guardrails of my thinking. And that is a brand.

Joubin Rahimi

That is a brand.

Olaf Hartmann

And in the end that is also the reason. Maybe to add this: where does it come from? It does not come from PowerPoints and it does not come from any strategy papers. It always comes from people's experience. Which means the source is always the brand experience. It is not the strategy, it has to become experienceable

Joubin Rahimi

And for it to become experienceable, you have to bring the entire company along.

Olaf Hartmann

Exactly. And in what you described about Amazon, something worked, namely that this Amazon employee knew what the performance promise was and how he had to act in order to fulfil it.

Joubin Rahimi

Probably didn't even think about it, it had become second nature.

Olaf Hartmann

Great point. Because customers do not read strategy papers, and neither do employees. That is correct. Awkward. Which means you have the same task towards customers, and what you also have to understand is that everything we have to say, our communication and all these things, is unwanted communication. Nobody wakes up in the morning and says, let's see what synaigy has to tell me today, nobody does that. Which means that despite this rather dismissive mental attitude, this "I don't want to hear any of it," we still have to get into people's heads. And the same goes for employees. Which means we also have to achieve a condensation there, so that in the end this employee behaves that way, the same way as towards the outside. At the point where we are already bored with our own message, it is just starting to work out there, and we also have to reduce and simplify it as much as possible.

Joubin Rahimi

Is it actually harder to get the message across to your own employees or to people outside, customers and prospects?

Olaf Hartmann

I would say it is similarly hard. A slight advantage is that employees are partly forced to listen to you, they do not run away as quickly, and you are also paying them something. But in terms of perception processes, and probably everyone who has ever been to a strategy off-site can confirm this: what actually stuck? And then you talk to five people and seven things stuck, but all of them different. And that is where you notice the challenge. Which means doing it continuously, and it is the same as what applies on the outside. Brands emerge through recognisability and through repetition. So I have to influence the statistics of people's environment. That is how brands emerge. To make it a bit bigger, perhaps: nature produces brands. What does that mean? What does that mean? Bees make honey. Exactly, honey, right. Because bees leave their hive and look for resources, namely honey. And if they had to fly to every plant, and some plants are poisonous for bees, then that is quite dangerous. Which means once they have recognised the pattern after some time, and they communicate that among each other, what it looks like, for example a black circle with a yellow ring, that is where I find the nectar I need, then that is a brand. So brands are actually orientation systems for the world. Brands make life easier, simpler, and they reduce complexity.

Joubin Rahimi

And we had, let me draw the arc forward again, we had the topic of brand and marketing, brand and marketing in English, that they are not the same. So now the question is: who is actually responsible for the brand, in your view?

Olaf Hartmann

That is a good question. A brand is not a department. It is often seen as a department, in companies that do not manage it so well. In companies like, and unfortunately I have to use this example, like Apple, the brand is the operating system and it was represented. A very strong brand signal back then was Steve Jobs, and people who are such strong signals for the brand, who are basically the brand on two legs, are not always pleasant either, they simply radiate it, and we have plenty of those now.

Joubin Rahimi

Zuckerberg, Trump is probably a personality brand too.

Olaf Hartmann

Yes, unfortunately that is a brand as well, you are completely right there. And he also understands brands very, very well. The signals, this simplification he always does, this linguistic simplification, these codes he uses, and he himself with his orange hair and his overlong ties also has certain very distinctive signals that he cultivates consistently. But that is why, to come back to your question, who is actually responsible for the brand? At the end of the day, everyone. But of course someone has to organise the process, how all these touchpoints, and that is what we measure, the brand experience, where it comes from, where it emerges from. There are three elements that influence the brand. The first one, which we have already discussed, is the performance promise. You can make that more or less attractive, then the signals reinforce it. You have to get into people's heads, and then these signals have to be experienced at touchpoints. And from this description you can already see that it is the entire organisation, so every service call. But back to the question: who is responsible for it? It needs a moderator, it needs someone who, again and again, like that empty chair in the meetings at Amazon, practically represents it. What would the brand say about this now? And the former CEO of Ikea once put it very nicely. He said the biggest mistakes in our company's history were always made when the brand was not in the room. When the brand was not in the room. And what does that mean? The operating system was not there. Which means the mental filter was not present in the discussion. And then something was decided out of a different understanding of the goal, because you could save costs somewhere. You forgot that the brand is always the customer perspective. How does this change the brand experience for the customer? What does this do to the customer? Does this correspond to our core promise towards the customer? Or is it a contradiction to it?

Joubin Rahimi

That is why, I think, they also introduced things again like a 90-day or three-month return policy, something absurdly long, and those spare-parts boxes, just grab what you need and you don't even have to go to the counter, because the process costs are probably much higher

Olaf Hartmann

When you also have to buy it or something like that. Ikea is a very good example, because those are walk-in brand spaces. Ikea is also completely built from perception, not from what do we have on offer? We will put this here, we will do that as a segment. And here you get all products X, over there all Y, they have that too, of course. They also have a chair department where you can see all sorts of chairs. But what they do is ask: what does the customer actually want? The customer wants a world of experience, they want to make their home more beautiful or more practical or

Joubin Rahimi

a theme with a room.

Olaf Hartmann

And that is how Ikea presents its products, as worlds of experience. You step into a fully furnished room and there everything is configured and creates a benefit promise. You too can live this well. And that is one example. And then the way, too. All furniture stores do that as well. They do it too. But Ikea were the first to apply it so consistently. Then they think, what is annoying about this kind of shopping trip? The kids, when will we finally get home? And then they created their ball pit and so on. All the way to behavioural-economics findings that they used. When we judge the overall experience of this visit at the end, and that in turn decides about the brand, namely whether in future moments of need I go to Ikea again. Then I do not measure the average feeling of happiness or the experience of quality across the whole visit at Ikea, but certain lighthouse experiences. And that is where the term peak-end effect comes from. The peak of the experience and the ending, those are the two most important points from which the judgement is formed. And Ikea does that outstandingly. It creates peaks. Exactly, with the hot dogs, you had it exactly right, right, with the hot dogs an ending. Or those promotional pallets there like a giant pack of cookies for just one euro. That is just crazy. So you create another joyful experience, and especially just after you have experienced pain at the checkout. And if that is the last moment, not good. That is why producing another experience after the checkout, one that creates joy, is exactly what we are talking about here. Namely brand experience. The memory influences it disproportionately.

Joubin Rahimi

In the end they do something else differently, namely that you can take the goods with you straight away. Almost always, too.

Olaf Hartmann

Exactly.

Joubin Rahimi

And that too is another difference, I think. And if you consider the furniture industry now, we have also been allowed to look after a few furniture retailers that no longer exist, that simply went insolvent, and a few that are still around, I find that really interesting. Let me pick out Segmüller. Segmüller has a place in Pulheim north of Cologne, and I think also down in Stammheim, they have this Pumuckland, this thing where children can go and they love it. There are huge queues and they have great food.

Olaf Hartmann

Yes, exactly. A very important factor. You think, what does that have to do with furniture? Well, it has to do with experience.

Joubin Rahimi

You go there and say, I am going to eat something. Really high quality, great price, friendly staff.

Olaf Hartmann

That is a very good example.

Joubin Rahimi

Maybe that is already the peak, that they say, our furniture is not really that great, but I get great food. That is the peak. And at the end I can grab a bargain and then next time I just buy the kitchen there anyway, because I do not think about it any more.

Olaf Hartmann

Yes, that may well be, because people do not decide such things rationally. It is the autopilot that processes all these signals into patterns, and in the end a good feeling emerges. In the end a brand is public trust, so it is a positive prejudice. That is a good way to put it, and everything that shapes it, and there I always like to use the example of friendships, because in the last 15 years we did one thing wrong. You cannot say wrong, because it was right at the time. We fell victim to a kind of optimisation mania. Everything always had to be more efficient. And that would be just like saying a friendship arises mainly through efficiency

Joubin Rahimi

When actually, to put it bluntly, it is when the shit hits the fan that you are there.

Olaf Hartmann

Exactly, because that is a lighthouse experience. But take media planning for example, which of course is also part of brand building. Of course, communication. In recent years we were told: yes, a contact is a contact. The main thing is that you reach the right person, Joubin, by persona, sociodemographic characteristics and so on.

Joubin Rahimi

I can sell him a cap.

Olaf Hartmann

Exactly, I can sell him a cap. Which means the challenge is how do I reach Joubin, and Joubin times 1,000, as cheaply as possible, because a contact is a contact. And at first that sounds logical, that way I save costs more efficiently, but that it is not true is something we notice on a personal level, because it makes a difference whether the two of us had met in the motorway service station toilet in Bruchsal or, as it actually happened, in Hamburg at a great bar where we spent a lovely evening together. Oh, what am I saying? Why did I say Hamburg? I meant Holland. I wanted to say Holland. Exactly, Holland. I had Holland in mind and said Hamburg. Exactly, in Holland at the nice bar, and there we had a lovely evening together. And these intense moments then make all further contacts, which may be of lower quality in terms of their setting, for example the subway, more effective. If we had met in the motorway toilet in Bruchsal and then I see you again on the subway, I think, there he is again, is he following me? Maybe I even avoid the contact. But we got to know each other in Holland at the bar, a great evening, I see you, hey Joubi, and I am completely open to it. You can transfer that to brand contacts. Which means if we systematically create such champagne-bar moments, then all the contacts that are actually of lower quality, which you can produce at high frequency and cheaply through display advertising, digital or however, suddenly become more effective. And to demonstrate that, I brought something along for you.

Joubin Rahimi

I am curious already, because it is standing between us.

Olaf Hartmann

Yes, it is standing between us, but it should not stand between us. It should help us make this conversation a bit livelier, loosen it up or make it livelier, because as I said, I talk about multisensory perception. With experience it is the case that it does make a difference whether I only see something or whether I see something and also hear something at the same time, which the viewers hopefully do right now, when it makes sense together, or whether I can also touch something. We cannot do that with the viewers now.

Joubin Rahimi

But for everyone who is listening, what do we have? We have three axes.

Olaf Hartmann

Exactly, we have a pendulum here and this pendulum has three axes. And what I want to demonstrate with it is that brand experience is a complex system. And what I have just described is that for too long we have understood brand experience as a complicated system. With complicated systems it is all about efficiency. We simply have to get more and more efficient. But complex systems, and a friendship is a complex system too, benefit from these lighthouse moments, from these champagne-bar moments. And that influences the effectiveness of the entire system. And let me show that briefly with this pendulum, because here we can generate leads, for example, and then I put an impulse in here, I invest budget and then it turns and I am quite happy and then I put in even more and then I can do it more efficiently. The movement of my hand towards the pendulum gets more and more efficient and I get better and better at producing leads there.

Joubin Rahimi

Typically German, at some point it is over.

Olaf Hartmann

Yes, and maybe I also get tennis elbow because I do it too often. Exactly, then I can, with your help for example, simply do this lead generation better. I put it on a platform, which means I find a lever, I automate the whole thing, then I put the same impulse in here and we see on the pendulum that considerably more comes out of it.

Joubin Rahimi

Mathematically speaking, or in physical terms, can you say how much more energy now?

Olaf Hartmann

Yes, the energy is retained longer and thereby produces more results. So the energy of its own, and that is classic for promotion, in brand building too. I put budget into promotion, and that increases sales. The moment I take the energy out again, sales go down again. A kind of sawtooth curve. So, and what a brand does.

Joubin Rahimi

That typical "we need more inserts again." Exactly, we both live in Remscheid, in the Bergisches Land, you open the local weekly paper, and the weekly paper, somehow two double pages or four double pages, is really just the shell for 50, 60 pages of advertising inside for the inserts.

Olaf Hartmann

Exactly, which is fine too, that creates an impulse as well. But in the long run, the more we put in there, the more inefficient it gets. And now you have seen twice how this system moves. Now I go to the pendulum up here and I put in the same energy. You can see whether the result in the movement of the lower pendulum matches your expectation. For those who are listening, you have to comment now on what is happening.

Joubin Rahimi

It moves a lot more, and into each other as well. And the axis, that would have been the third one right at the beginning, the third one, it really goes, it does not stop at all and

Olaf Hartmann

It even moves surprisingly at times. So it is not 100 percent predictable. But what we can say is that when we start at this upper lever, the entire system becomes more effective. That is exactly the statement I am making: that when we invest more strongly in the brand again, the investments we put into performance or into the processes also produce more results, in the sense of that encounter on the subway. Then everything simply gets better. And that is one of the first tasks for people responsible for brands, to understand where our whole brand system, our brand experience, actually comes from. And then to identify the ten strongest touchpoints in that sense. What are the lighthouse touchpoints in this system, identifying those, because budgets are not getting bigger. Concentrating them on the decisive points is therefore a very important factor for the times ahead as well.

Joubin Rahimi

Let's take the automotive industry. It is in real upheaval. And when you look at BMW, they have quite good figures compared to Audi or VW, for example. And what I find interesting is when you look at the perceived quality of the Audi models, which is often criticised, that more and more hard plastic is going in, or Porsche also has a drop in sales, when people say, I now have a VW switch, I pay 250,000 for a 911 and have a VW switch for the windows.

Olaf Hartmann

Exactly.

Joubin Rahimi

20 cents or 2 euros.

Olaf Hartmann

Good example, because from the logic of purchasing they maximised success. They bought more cheaply. Great, absolutely important. It brings profits forward in the short term, but in the long term it erodes exactly the reason why people bought this car, because all cars today get us from A to B. But if the topic is Vorsprung durch Technik, then I also have to make that noticeable. I have to make it experienceable. On the one hand through actual performance, like the Quattro back then.

Joubin Rahimi

Everyone knows the ski jump, right.

Olaf Hartmann

The ski jump spot, then I prove it as well. I manifest it in this communication, but I also experience it in the car. The thing sticks to the road as if on rails, and that also has to manifest itself in all the small details. And it is a premium automobile after all. Plastic buttons that you also find in a VW, then you notice, oh, that is a contradiction. And that is actually the goal. This whole system can be broken down into four factors, namely a strong brand experience that in the end creates what we are talking about. Preference. People should prefer us. It is useful on different levels. Functional, but also emotional, so emotional motives. Then it is different, because if everyone promises me the same benefit and everyone is the same, what decides then? Price. The price.

Olaf Hartmann

Exactly. No brand, so: different. We have to do it differently, even if we create exactly the same benefit. And then we have to be free of contradictions. That means exactly what you just described, those are contradictions. And the last point: we also have to stay interesting, because people do not want to hear from us. Which means we have to do interesting things. We also have to do things like Felix Baumgartner jumping from space in order to advertise a fizzy drink that keeps you awake. Super interesting. Everybody watches, and that creates many memory traces. But in the car sector, to stay with cars, BMW is a very good example. Freude am Fahren has been the guiding star since the 1970s. That is the operating system for BMW's decisions too. There is a nice example from von Kuenheim, who introduced the whole thing and shaped the brand very strongly. He always resisted producing convertibles. He did not like them, said nobody needs them.

Joubin Rahimi

You do not need it, but it is awesome.

Olaf Hartmann

Exactly, and engineers went to him with that argument. They simply sawed a 3 Series off, just sawed it off, and made a convertible out of it. They went to him and said, yes, but we stand for Freude am Fahren, and it is a total blast to race around a bend under the open sky in a 3 Series BMW with that engine and have my girlfriend next to me. And with that argument the brand, as a leadership instrument, was even able to convince the board. That is how the BMW convertible came about. One of the most successful product launches at BMW.

Joubin Rahimi

Was that the 36 or the E30

Olaf Hartmann

You are deeper into that than I am, but a nice example. And there the brand is established as a guiding star and is apparently able to channel decisions and people's thinking and acting even better than in the other companies, where this Vorsprung durch Technik was reality for a long time as well. And many Audi drivers have the feeling: where is the advantage here now?

Joubin Rahimi

It also works quite plainly. If you take company car taxation, they messed it up countless times with the Touareg or the Q7. They were always just under the limit. That is a German topic too, company car taxation for hybrids always comes down to one or two kilometres or one or two grams. And there you can see exactly, in the end it has to be measured on the test bench, and they wanted to creep as close as possible in order to get there. Volvo, BMW or Mercedes simply put in more batteries and then they were over it, but it would have been more expensive. There you really see where it comes from.

Olaf Hartmann

There you name a decisive point. A brand is also an attitude, and an attitude only becomes an attitude when it costs you money at some point, because otherwise I can always talk a good game: yes, of course that is my attitude, I have a totally strong backbone and that is what I stand for, and then I come to a crossroads and there I really have to decide. Do I now follow the attitude I preach, in which case I make it experienceable, or do I follow the purchasing logic and want to optimise the quarterly profit, for example. And brands are long-term investments, but they pay interest many times over, because what I just showed here in this system is compound interest, because it makes everything more effective. It also creates greater attractiveness as an employer brand. That is why understanding the brand as an operating system is important right now for the future, with AI and also with the platform economy, which is putting brands under real pressure, because in some cases Amazon knows more about the customers of the various suppliers selling on the platform than the suppliers themselves. And when at a certain point... We were talking earlier about certain positions being exploited to reduce margins bit by bit. And then the supplier says, yes, but then I do not earn any money at all. Then Amazon says, well, then go, because I have all your data. And then I go to China and I even know your factories. I know exactly where you manufacture the things, and then I manufacture them too and turn them into Amazon Basics and that is the end of the story.

Joubin Rahimi

That has happened many times.

Olaf Hartmann

Exactly. And the only thing that helps against it is a very strong brand. A positive prejudice in the minds of people who then search for Dyson and only want a Dyson.

Joubin Rahimi

Do you take Warta batteries or Amazon Basics? I would bet Amazon Basics is doing better, because so many people are now conditioned by Amazon, without me knowing the figures. I will take the Basics, they will be fine. And Warta, okay, that is a German thing. Yes, it is a brand. But young people do not associate anything with it any more.

Olaf Hartmann

Yes, and there the brand is reduced to: it is well known. But being known does not mean being relevant at the same time. Known is not relevant. Something is relevant when I have an expectation of benefit that is credible and highly attractive to me, and there we are back at Navi: useful. Different, different in some way, different in terms of feeling and so on. And there you can see, if you look at it like this. We will also talk in a moment about whether that is actually relevant for B2B. Let's take another consumer brand as an example. Red Bull comes onto the market with a fizzy drink that also tastes bad.

Joubin Rahimi

A matter of taste.

Olaf Hartmann

A matter of taste, exactly. And it keeps you awake. So what did they do? They could have brought it onto the market as another version of cola, but instead they first coined a term, namely energy drink. That did not exist before. There were energy bars, but there was no energy drink. Suddenly positioned mentally in a completely different category. And then they are also different, namely narrower and smaller than all the other cans. And our autopilot processes that as something that is condensed and very strong. We know that from coffee. The espresso is stronger than the coffee, it is condensed and smaller as well. And suddenly, implicitly, the connection is made: ah yes, they promise me more effect. And then the proportions of the can are also similar to a battery. And what do I want? I want performance, I want energy, and suddenly it fits. And then there is even a chequered flag on it, which many people have never noticed. On every Red Bull can there is a chequered flag, and Red Bull sponsored Formula 1 from the very beginning.

Joubin Rahimi

I think I have never noticed it.

Olaf Hartmann

Then have a look at a Red Bull can. There is a chequered flag in the background. And they sponsored Formula 1 from the very beginning and built up a great many associations that all pay into one point. Performance, performance, performance, performance.

Joubin Rahimi

Red Bull gives you wings, all the others,

Olaf Hartmann

The entire coding of the brand, sessions on site as well.

Joubin Rahimi

I have been on site a few times myself. The people there tick that way too.

Olaf Hartmann

And then the brand is the operating system. It is a culture. A culture is an operating system too, an unconscious operating system. This is how we do it here. And if I behave differently, then I immediately feel resistance. Somehow it does not feel right. And humans are social beings as well. We are afraid of acting in a way that does not conform to the group. And there you can see how powerful it becomes once you have established it. Then it is an operating system.

Joubin Rahimi

Let's move towards B2B, but I will not make the jump quite so hard. Hilti is clearly B2B too, but on TikTok and Insta you see more and more videos with Hilti vehicles overtaking a sports car at 250. That is AI fake, of course. Along the lines of: when nobody else gets through, Hilti still gets through. They have somehow created something there too.

Olaf Hartmann

Absolutely.

Joubin Rahimi

I do not know whether they, whether this happened by chance, which of course would also be a question of the brand, or whether it was influenced at some point. Okay, let's try to set a trend that the Hiltis, as it were, are always quick on the construction site, always on the move.

Olaf Hartmann

Right. So let's put the word brand aside for a moment. It definitely did not happen by chance, because top performance never happens by chance. There is always a will behind it. That is why behind strong brands there are always strong people. And whether that person then calls what they created a brand is a second question. But at Hilti and at Würth too, these are definitely strong people who understood the performance promise very well, what is being delivered. And with Hilti, even with identical performance data, people are willing to spend three times as much on a Hilti compared to a blue BOSCH

Joubin Rahimi

Or rather the chemical anchors and so on. That is actually what they really earn their money with, the consumables.

Olaf Hartmann

Exactly, that is exactly the point, because sometimes the signal that creates the memory traces is not at all what makes the most money in the end. That is easy to observe in the automotive sector. The Mercedes SLS is certainly not the big profit generator at Mercedes in absolute terms, and at BMW the top models are not either. But they have very important signal functions, namely value signals that radiate onto the models below. But to come back to Hilti. A brand always starts with a characteristic, and at Hilti this characteristic is nicely summed up: always gets through. So you get into the hardest wall with a Hilti, reinforced concrete, and then you need certain characteristics. It starts with the drill bit, if the thing is made of sheet metal it does not work. It has to be chrome vanadium. So a certain characteristic that pays into the functional goal. Which means I first have to build the association: ah, chrome vanadium, and with that you get into any wall. And then above that there is another level that really gives the brand its magic, exactly as with Red Bull. Above it stands the emotional motive of performance. With this I am, so to speak, the high performer.

Joubin Rahimi

When I arrive on the construction site with the Hilti case, what am I then? I am the professional.

Olaf Hartmann

Exactly. So Hilti managed to change the aspiration in the self-image of people who work with Hilti. Not the only one. There are others, Makita has quite a good reputation in that direction too, while others get smiled at on the construction site with the green Bosch. Okay, all right, let me have a go.

Joubin Rahimi

At least the blue one.

Olaf Hartmann

Yes, at least the blue one. Exactly. But then I turn up with the Hilti. And there you can see, and building on that, a space of meaning then emerges that colours all other services as well. And it is also a triage system. We do this, we do not do that. For us it is always about peak performance. So is this really peak performance or is it not peak performance? And I have another nice example from the truly total B2B sphere. The company Balzers. It is a chemical company, many hundreds of millions of euros in revenue. They grew big back then with a coating for drill bits so that the service life of the bits would be extended. And chemically that was just below Nobel Prize level, what was achieved there. So the drill bits were coated and then they lasted so much longer, and that had a huge economic advantage. With that they grew practically from zero to, I think, 200 million or so. And then the competition does not sleep either. So at some point there were other coating companies that managed it too, and then revenue went down very slowly, and back then the managing director showed me: and then our revenue went up again. Hartmann, what happened there? You probably introduced a new coating. Yes, correct, we did. Exactly. And it probably generated an enormous amount of revenue. No, that is not how it was. We introduced a coating that is actually needed in only 0.2 percent of cases in the market. But it was again the very best in the world and nobody had ever achieved before what we had done with it. And what then... The normal coating sold better again,

Joubin Rahimi

Because there was simply something above it and then, okay, I will buy the very best from you, the second best, I have saved something but it is still a top product.

Olaf Hartmann

And the perception of that supplier is that they are simply right at the front. And that is why their normal coating is right at the front as well. And that shows again that for a brand we need permanent performance innovation. So you cannot think a brand through pretty communication. There always has to be permanent performance innovation involved. And with Red Bull you can say the can and the drink have always stayed the same. But the performance innovation at Red Bull always came from a new context of meaning where they demonstrated performance. We are now sponsoring a football club and then it becomes German champion. We are now sponsoring Formula 1 and then in the end we are world champions or we fly a plane through a tunnel. Exactly. Whatever it is. Always this peak performance in this demonstration. People, we give people wings.

Joubin Rahimi

I am placing that right now with two customer clusters of ours. First wholesale, where we have several. We have sanitary, electrical, office equipment. All of them are of course struggling with margins right now. And why is the office outfitter having a harder time than electrical and sanitary? Because we can simply go a year or two without buying new furniture, or you buy used furniture, but if you build something you need switches. Relatively simple. So how can they work in with their brand?

Olaf Hartmann

Great question. Yes, exactly. Good question.

Joubin Rahimi

What USPs do they have?

Olaf Hartmann

Where is the USP? And that is exactly the logic you have to apply now. What is the promise of the brand experience for the customers of these brands? And in order to be relevant, to be useful, that is fed by people's goals. And do people actually want office furniture? You could say they want a desk, but actually they do not just want office furniture. They want to perform in this office. Or they want to offer employees an environment where they are attractive as an employer. So if a retailer that supplies me with the same things as the other retailers suddenly curates it all for me, similar to what we described earlier with Ikea, so that it is curated from people's goals. We create, and this is a positioning shaken out of my sleeve right now: we are the provider of high-performance environments. Then suddenly you have put an emotional motive on top of it, which enables this retailer first of all to select products that let people work with concentration for longer through ergonomics, that influence them psychologically through a certain use of colour so that they feel better, so that they are happier. And you can already sense the logic behind it. Which means you start from people's goals and we position ourselves on the strongest possible driver in the category. And every category is driven by many drivers. So the first thing I have to do is analyse what actually drives this category. And the next step is, if we say brands are memory traces, then we are not alone in this market. There are other brands that have some meaning too. So the next thing I have to do, after I know what drives the market, what all the drivers are: what does my competition stand for? Which of these drivers does the competition occupy particularly strongly? And are there strong drivers that nobody occupies? That is where the innovation potential comes from. And then I also have to know what I stand for. Which strengths are attributed to me particularly credibly? In the past it was always differentiate or die. We have to be different from the others. But that is not right. We have to be distinctive, different in the way the various factors are formulated, all of which create a perception. And that makes us more quickly perceivable, more easily storable. And then this being different is more in the sense of: I become more credible and more quickly associated with a certain benefit promise. And if I manage that, then as a retailer I can also take up wonderful, very strong competitive positions. Just as Edeka managed it. Enjoyment, we love food, so the good life. If I want a good life, then I go to EDEKA

Joubin Rahimi

They really worked their way out of that niche they were in.

Olaf Hartmann

Right. And if I want it cheap, then I go to Aldi. And then what does the other discounter say? It says, I give you an affordable range with enjoyment, and then you are at Lidl. And you notice, the great thing is that when you take these emotional constellations of motives, you can formulate a unique combination for every brand. Now of course there are some that are more interesting in terms of quality or economics than others. The fact that Red Bull is positioned on performance automatically brings them more revenue than Monster, because Monster is positioned more on excitement. Gaming, gaming, exactly. And if you look at how often in life there are moments when my need for excitement is there and how often there are moments when my need for performance is there, then you notice that quantitatively more people more often have the need to perform than to be excited. Excitement is great too, but on a Friday evening at a rock concert Monster is suddenly more credible, more attractive. But fundamentally, if I want to drive, if I want to study, if I want to do sports and so on, far more moments are about performance, and that is why you should try to position yourself in a market on things that as many people as possible see as attractive, where I have a chance of representing it credibly and which of course become relevant as often as possible.

Joubin Rahimi

And something else occurs to me about the pendulum. We now have three axes and

Olaf Hartmann

I wanted to, shall we let it run again,

Joubin Rahimi

 Let's go over to manufacturing, gladly. Made in Germany would be a fourth axis.

Olaf Hartmann

Yes, exactly, that is basically a source brand that you put over it. And that is why the perfume from Paris is simply more credible than the perfume from Gelsenkirchen. Although Gelsenkirchen is a beautiful city, but perfume from Gelsenkirchen probably not in all places, at least not in multi-storey car parks where some bank robbers have just drilled open a safe, it probably does not smell so good there.

Joubin Rahimi

Did they do it with a Hilti?

Olaf Hartmann

That would be a great spot. Hilti gets through anywhere. But that is exactly the point. The source brand of course colours the brand that comes from it, and that is why Swiss Made is still extremely strong as well.

Joubin Rahimi

Made in Germany really is declining right now.

Olaf Hartmann

And to flesh out the example, why is that? Because when you come to Switzerland and travel in from the airport in Zurich, it is already unusual if the train departs 30 seconds late. Everything clean, punctual, tip-top, everything super precise. And I believe that Deutsche Bahn has probably contributed more to the weakening of the Made in Germany brand in the last 10, 15 years than any other scandal, the diesel scandal and so on. Because it is so physically experienceable. So I arrive in Frankfurt, I have travelled in to buy the mega precision machine from the top special machinery manufacturer in Stuttgart, and the first train that comes is late and I miss my connection. And then memory traces remain that colour everything that follows. And just briefly on this: it is a very interesting field. When you think about brands and brand experience, the findings of behavioural economics are extremely interesting. And an effect that is well researched is the so-called priming effect. It means I am primed at the beginning. That has then been tested in a great many different contexts, for example with application documents on a heavy clipboard or on a light clipboard. The application documents were identical, the grades were identical, the CV was identical, and the one on the heavy clipboard, that person always got the job. And when people were asked why, they generated 1,000 reasons. Nobody said it was because the clipboard was so heavy. But that activates our autopilot again. Weight has something to do with competence, and suddenly that colours the entire perception of the CV, the grades and everything that happens there. That is the effect we have just been describing with Made in Germany. Which means this experience of a lack of precision, of unreliability, then of course also colours the perception of the company I visit in Stuttgart.

Joubin Rahimi

Which also means for all companies: we have to step it up a notch.

Olaf Hartmann

Definitely, yes. And something that keeps you very busy too is processes. The processes, the cognitive ease, the experience of quality that I have in processes, of course that colours everything that comes afterwards as well. And then I simply perceive exactly the same signal differently.

Joubin Rahimi

We are currently also supporting customers who simply accept orders via WhatsApp, so complex orders via WhatsApp, or also orders from a meat processing company that says, I need the same knives again in the quantity I always have, because you simply do not know what you ordered last time. Things like that. That is a kind of ease as well. Exactly, the company that says, I just want it simple.

Olaf Hartmann

And the channel also coloured the message. WhatsApp is actually a channel where I am in very personal contact. And if the company now offers me a WhatsApp channel or another chat channel, then I am closer to them. So I move into a different form of relationship. And of course that colours things too. And the person processes all these signals: ah, they take care of me, they think along with me. What is bad is what I then experienced with a bank, when I send a message via the chat that is offered to me in the app and I do not hear anything for three months. Those are lighthouse moments as well, but in the opposite sense. That then also colours things afterwards: the fees are pretty high too, and they did not get this and that right either.

Joubin Rahimi

Interesting. I had a post about the Miles & More credit card, I have had status for a good 20 years, still have it, and now they are switching again. Every now and then they switch the issuer of the credit card, from DKB to Deutsche Bank. That is by the way the post that got the most views. Thanks again to Deutsche Bank. And there is a process where you can apply for the new card. That was never the case before. And they wanted, either you are a Postbank or Deutsche Bank customer, you can enter your customer data, you find out later in the process, and then they say what credit limit you have. Now I have a credit limit that I have had for 15 years, 20 years. I have no desire to enter anything else. I am out and now I am questioning Miles & More as a whole. And I find that interesting too. Been with them a relatively long time and simply because I am given work for something where I say, you are the ones earning from it, not me, and this one mile per euro or 2 euros per mile, when you do it privately, and why business and private are different, sure, that is a taxation topic, but as a customer I will then go to Amex, where I get four miles for five euros and not one for two. Nice example, you do not even make an effort any more.

Olaf Hartmann

There you see again that in shaping the brand experience you can apply the classic 3B rule. For the listeners, the 3B rule is in the book, of course it is in the book. But I did not invent the 3B rule, it comes from behavioural economics. It stands for behaviour, benefit and barrier. And it is a really nice mental model that you can always lay over things. First define what we want people to actually do. Think, feel. Then we know where the journey is going. That is the goal. Then we look at what motivates people, what are the benefits we can promise? And what many overlook is what you just gave as an example, the barriers. What keeps them from doing it, or what creates friction so that they do not do it, and what you just described, that was the status quo effect: everything is as it always was, and suddenly friction arises because of this switch, and suddenly that creates a behaviour too, namely that you no longer feel like taking part at all. Removing this friction is a frequently underestimated lever. A nice, vivid example. There is a bar, Bob Bob Ricard in London, run by a former Ogilvy advertising manager, and it is the bar with the highest champagne revenue in the world. And how did he manage that? By removing the friction. At every table there is a button. Press here for Champagne. I only have to press it and then the waiter comes over immediately and brings the next glasses of champagne. And there you see a huge lever simply through the removal of friction. And we talked earlier about the checkout process or similar, when there is friction there, how often do you have checkout processes and then you simply abandon it because you are too annoyed. And you always construct what people are thinking, and you notice whether companies only think about themselves. Again the example with the car: now the VW button is installed here too. Yes, that was probably cheaper. Or are they thinking of me, of my experience? And I really appreciate it when I sense that people have thought things through in detail in order to make things easier for me. But as I said, I can only recommend the 3B rule, barriers, removal of friction. Taking a look at the whole touchpoint profile. Where in our brand experience do we create unnecessary friction and where can we remove it?

Joubin Rahimi

Point, point, point. Another completely different question. We live in, and this is not meant judgementally at all, or rather positively, we live in a Western system that is shaped by capitalism. Social market economy. Would marketing and brand experience work under communism?

Olaf Hartmann

It already has.

Joubin Rahimi

What is the difference? And you always said performance. I am making a really odd digression now.

Olaf Hartmann

I love it. That is also why I love the conversations with you, because we go off on tangents and look at things from different perspectives. And that is a really exciting question. There were brands in the Soviet Union, and what is interesting, if anyone wants to experience that again, there is a very, very good series about Chernobyl. And at the beginning you think, what is actually different here? And then in all the images you notice that in the cityscape there is no advertising anywhere. There are no brands, nothing visible.

Joubin Rahimi

There is the Trabant.

Olaf Hartmann

Exactly, but no advertising posters and so on. And on the clothes there is nothing to be seen either. Nevertheless there were brands. For example there was only one kind of chocolate in the Soviet Union. But it had different production sites. And these sites were marked on the packaging with numbers. So where they came from, so that if something went wrong the right apparatchik could be made a head shorter or end up in the gulag, responsibility had to be traced somewhere. Which means every chocolate also had a number. And children were sent shopping to buy such chocolate, but make sure you buy the number four. And what is that? That is an expectation of performance. That is brand building. I only eat number four chocolate. Not in the classical sense, but it is what I was talking about. People always form brands. In personal life too, in our choice of friendships and relationships. Those are brands as well. We have expectations of performance and experiences of performance being fulfilled. And I often get pushback there when people say: yes, but for love relationships, for example, that cannot be. Love is not based on performance. Of course it is based on performance. And it starts because the other person perhaps looks good, because they are charming, because they have a sense of humour, because they take care of me

Joubin Rahimi

And with marriage there is a promise too.

Olaf Hartmann

Exactly. And then they also give me a promise, and then the performance drops at certain points. Perhaps you no longer make as much effort and are a bit distracted, the job is stressful and so on. And what happens when the experience of performance deviates from the expectation of performance? The bond decreases, the appreciation

Joubin Rahimi

3B applies there too, there too, and you have to create a peak and the ending has to be good.

Olaf Hartmann

Exactly. Just like that.

Joubin Rahimi

Is it really transferable in your view?

Olaf Hartmann

Yes, definitely.

Joubin Rahimi

Because we humans simply tick the same way. It is a human relationship.

Olaf Hartmann

It is the way we process the world. We look at the world and we permanently filter the world for resources and dangers. That is built into our system. And that is why we are extremely sensitive to all signals that promise us value and sensitive to signals that mean danger, and that is how we function.

Joubin Rahimi

 And now I will take the whole digression back again. I had best read your book, or rather it should be the entrepreneurs, the managing directors who read it

Olaf Hartmann

Best of all everyone in the company. But yes, first of all those who are responsible for this process.

Joubin Rahimi

Probably not 300 pages either. But how do you get it into the company so that it actually becomes reality? You have surely prepared something for that in the book.

Olaf Hartmann

Yes, exactly. There are checklists, right? This was not arranged in advance. Exactly, I can say that. There are checklists in it, there are models in it, and that is actually what I also tried to do here in this conversation. There is nothing as practical as a good model.

Joubin Rahimi

I wrote something down.

Olaf Hartmann

You wrote something down?

Joubin Rahimi

Yes, exactly. You have the BX Navigator and the BX Score, right, exactly.

Olaf Hartmann

So we have the BX Navigator model. That is the first thing we want to plant in people's heads, or hand them as a tool, as a thinking aid. And we are visible here, so to speak. You will have to comment on this again. What I am doing now, I would like to translate it briefly into a visual metaphor, namely that brand experience management is a bit like juggling, because first of all we need the performance promise and that has to be attractive somehow and I can change that in different ways. But you notice, more is possible. And that is exactly what we talked about, because the thing does not get into people's heads automatically. Which means customers do not read strategy papers, and neither do employees. Which means after that I need strong signals. I have to think about what makes me recognisable. You recognise a strong brand by the fact that you recognise it, and that has to fit with this performance promise. And out of that, more already emerges. And those who are watching now are thinking, nobody is applauding yet.

Joubin Rahimi

Juggling with two balls, something is missing, namely

Olaf Hartmann

We need the touchpoints. Which means the whole thing has to become experienceable at touchpoints. That is how the pattern emerges. And there is another metaphor in here, namely that I cannot maximise just one factor. The brilliant strategy without the strong signals does not create it. I always depend on the whole thing happening as a pattern, and then a ball drops now and then and you pick it up again and carry on. Every brand always has a different pattern, but I can never get around combining these three factors with each other. How does it get into people's heads? By first of all grasping it as a holistic process and then not seeing the brand as a department, but putting this understanding into the heads of the decisive leaders. And saying, you in the service area also have something to do with our brand, probably even more than the person who makes the pretty campaigns. That would be the first step I can recommend. The next step is then, once we have said okay, we are all responsible, we also have to develop a shared target picture. And there we are at Navi. What is our benefit? How are we different? How do we become free of contradictions? And how do we stay interesting? And let's stop at that point.

Olaf Hartmann

Bang, sounds so easy.

Joubin Rahimi

No, it is probably not easy at all, because you have to bring all the people along, and then someone is sitting there, for us too, as a project manager at the customer, and they represent a lot of the brand because they have a lot of touchpoints, because we simply have people who deliver service there, and of course the person is very much the brand.

Olaf Hartmann

And that is the highest form of brand management, because that is what we were talking about. There the brand has to become culture. There these experiences you described with Amazon, there the brand has become culture. And that is not a quick win. But to make it manageable somehow: how do you eat an elephant? Piece by piece. Which means the very first thing you start with is, for example, gaining clarity, sharpening the brand itself, the performance promise. And once you are clear about that, then you can very easily recognise the contradictions, and then you simply start, quite calmly. You look, okay, here we are not fulfilling our promise in the way we want to, here we are not either. And then you start working on these touchpoints piece by piece and creating lighthouse experiences for the employees too. And Götz Werner, for example, always did that very well at dm, because in retail, light for example is extremely important and that was always very, very important to him. And what does he do? He does not write internal memos and distribute PDFs and say please make sure in every store that the lighting is right, but instead he made unannounced store visits and then, first of all, he often had a ladder brought in and then, even at 70, climbed up the ladder and started fiddling around with the lamps until somebody came along. Mr Werner, please come down, we will do that, and so on. And these stories then spread through the company. And culture always emerges from stories. Our culture emerged around the campfire. We told each other stories, so make sure that brand management already begins with producing the right stories internally.

Joubin Rahimi

But you have to be careful that Mr Werner, not any more now, but that he does not drift into micromanagement.

Olaf Hartmann

Absolutely. He only has to do the symbolic things, so not micromanagement, but he has to create these big lighthouse stories.

Joubin Rahimi

But then you can tell the story nicely.

Olaf Hartmann

Then you can tell it really well, if

Joubin Rahimi

That is not right. Mr Werner will do it now.

Olaf Hartmann

Exactly. And even once you are gone, then it is the mental guardrail, so to speak. What would Mr Werner say about this? That is also a way of keeping a brand alive, by keeping the stories from which the whole thing emerged alive, but always in a relevant manifestation, because technology develops quickly. And then finding new forms of expression again and again for how the actual performance promise of the brand manifests itself differently today than it used to. Freude am Fahren was something different in the seventies than it is today.

Joubin Rahimi

I am thinking again of our B2B manufacturers, and I had to look at Marc behind the camera. I have to look at him too. I am going to tell you something now. Marc will react to it in a moment. If you sell products, and we have Liebherr, Coroplast and so on, then the products are also very much part of the brand, I will come to that in a moment. But if you are heavily in service, then it is the people too. And we found a perfect place in Hamburg where we experienced the brand, or the service mindset, in a completely different way. And that was the restaurant Parisas.

Olaf Hartmann

A smile. Yes, yes, yes.

Joubin Rahimi

It is magnificent. I know the owner's name, the way he looked after us there. Everyone says that and I send everyone there too, go there and you will find out what service is. There are certainly other places too where you have felt it again.

Olaf Hartmann

But that is a great thought, because enabling people to experience it again, so conveying the actual message in the real experience, is always stronger than telling something explicitly. And Götz Werner again as a shining example, because we also measure the brand experience of different brands. And match them against each other. And dm is right at the very top. Brand experience, quality and trust in the brand are right at the top. And you can build a lot on that,

Joubin Rahimi

All the way down to the suppliers they have, whom they treat differently, not squeezing out the last cent.

Olaf Hartmann

Exactly. And when it matters, they go all out for dm. And what they also did is, every employee always said retail is a stage. And if people are standing on a stage, then they should be equipped with the skills to perform on that stage. We send them all to improvisational theatre workshops. Which means every employee has to take part in an improvisational theatre workshop. And little things like that shape culture too. There is an aspiration behind it as well. You have to be on stage here every day, you are putting on a play and you have to know your lines and you have to react well. And in improvisational theatre the basic rule is: never contradict the customer, but simply continue, and what is it actually about? About the shared goal of making them happy. Here I am human, here I shop, realising that every day.

Joubin Rahimi

Point. And I will add to that now with: when I sell products, we are very often involved in that. And I think everyone knows this. Many people use Spotify, a common app. At some point there was, or Sonos is also a product where the app worked quite well as well, and then

Olaf Hartmann

In between it was no longer a great experience. Suddenly I could no longer play my playlists from my iPhone

Joubin Rahimi

And then you are not happy with it at all any more. There is Bose, they always had a bad app. It never performed either. And these digital service touchpoints are something we also observe, where far too little work is still being put in in Europe, whereas in other countries I already perceive it quite differently. Let's take Lidl as an example again. In B2C everyone can work really simply. For a long time Lidl said, I am not doing an app at all, and Aldi did not either, but Lidl is now overtaking everyone on the inside lane in that respect. They have their own app, they have Lidl Pay on top, they have rewards points on top, certain prices, and they have completely internalised this thinking. They also produce the bottles themselves, the PET bottles and so on. Or you can donate your deposit straight to the food bank. Combined with the digital touchpoints, even though it is a discounter, I think that really is a difference.

Olaf Hartmann

Lidl is worth it, and that then manifests itself at that point in the app. It is worth it, so the app has to be worth it too. Which means there are costs that I have economically, money, but I also have behavioural costs, and those are far more important today. So how many behavioural costs do I have and how much do I get out of it? And our brain permanently makes this calculation between pain and reward. And neuroscientists can actually predict that in the scanner by now. When people are led into a purchase decision, will they buy or not? Simply by observing how strongly the reward centre is activated versus the pain centre. If the reward centre is activated more strongly, then they buy.

Joubin Rahimi

Uber did that really well too.

Olaf Hartmann

Yes, right.

Joubin Rahimi

You only had rewards. You did not see the pain at all, because it came much later, confirmed by email.

Olaf Hartmann

What I said about the 3B rule. There is incredible economic leverage in removing friction. And what did Uber do? It made the waiting time psychologically more pleasant, because it was not actually the case that the other taxis arrived later. When exactly are they coming now? And how much time do I have left? Can I still buy a newspaper at the kiosk or will I miss the taxi? And suddenly with Uber I have control. I see the thing, ah, it will be here in 4 minutes. Oh, I still have enough time, so I will quickly buy the newspaper. And that is extremely powerful. And conversely you only need one digital touch, just one digital touchpoint. A billion-dollar company came out of that. That is exactly it. But out of a certain attitude. And Uber, in the word uber, that is what Americans say when something is really incredibly much better. They said, that is simply the uber experience and it simply does it better. And conversely you can say, and that is always the case with behavioural economics topics: the reverse of a good idea can be a good idea too.

Joubin Rahimi

The reverse of a good idea.

Olaf Hartmann

So removing friction, not a bad idea. Sorry?

Joubin Rahimi

You mean, yes, not a bad idea.

Olaf Hartmann

No, those are two good ideas, namely removing friction, great idea. But building up friction can be just as good an idea.

Joubin Rahimi

Do you have an example of that?

Olaf Hartmann

Hermès for example, just to qualify at all to buy a Birkin bag? That is an extreme example, but in other areas too, for example more in the mass market, when it comes to advisory services, when a bank or a financial services provider tells me, we advise you in a completely personal way, precisely tailored to your needs, and we really understand you particularly well and so on. And then we talk to each other for half an hour and then he basically pulls the financial plan for my life out of his pocket

Joubin Rahimi

Which was already finished.

Olaf Hartmann

Which was already finished. The friction is greatly reduced there too. Does that make sense? I do a few others. So building friction in there, saying: in the first conversation we will only talk about your goals and your situation, then I will take that away with me and we will meet again in two weeks. Then I will do a first draft of what the whole thing could look like. Then I will explain a bit more to you. Then I will explain certain principles according to which we make investment decisions and so on. Then we will look again at which of these types of investment strategies is the right one for you. Then I will go away again and make you the proposal for how we structure your portfolio. How much trust do you have in the service then? And there you notice that friction is an important part of expectation. When it all goes too easily, because we always make calculations too, something that is very easy is worth little.

Joubin Rahimi

But it does not have to be.

Olaf Hartmann

Right? It does not have to be.

Joubin Rahimi

Two remarks, on our side too. We often win deals, and I think that is the case with many of our customers as well, when we also deliver quickly, when they say okay, I want a managed service, and we do not wait until the end of the tender but ask countless questions and then deliver the adapted offer. Of course we have standards, but we adapt it. And I see exactly the same with customers, when they manage to marry these digital and physical channels with each other in such a way that they create trust through speed. But I find that an interesting point. Still, it does not have to mean that everything is easy. There can also be follow-up questions and homework.

Olaf Hartmann

And now we can lay the filter of motives over it. In business to business, for example, a core need is also effectiveness and also speed, getting things off the table. In the example I gave earlier, it may be about my entire remaining life planning, so my main need there is security. In that case I am willing to accept higher friction. Security is very important with you too. But above all that things move forward, that things become visible, that the person who makes the decision can also report something quickly to the stakeholders in his company, because that is a motive too, since he then gets the halo effect, because everyone is their own little brand as well, a personal brand within the company, and then people say, Joubin, if I give him this, he always sorts things out quickly, things always move forward, and the price is fine.

Joubin Rahimi

It all goes hand in hand. Great added value. To close: which three points would you give managing directors in the B2B environment, whether trade or manufacturing? Of course everyone is at a different stage, and this is a bit frictionless now.

Olaf Hartmann

That is again a mental model and it is exactly what we wrote this book about. Namely: be aware that the interplay between positioning and the performance promise, that it is worth looking there first. Do we have to sharpen it or are we arbitrary, do we actually know what we stand for? Which means the first tip is: go into the corridor, grab five people and ask: what is our performance promise towards our customers? If you get five different answers, then you have a field to work on. That means you look at what is actually going on in your own heads. If there is great clarity there, then you have a communication problem. But if even in your own heads, even on the board, there are different definitions, then you have a sharpening problem. So the first thing is to sharpen the performance promise. Second point, the lowest hanging fruit. People out there are permanently busy with their lives. Make it easy for them to recognise you and place you. That means sharpen the statements, condense them and then brand them very well. And that is not the same thing. Brand signals are often left to the creatives. Make a pretty logo, decide on a colour and so on. But brand signals are probably the most valuable thing that exists in the long-term view of a company. At the beginning you have to distinguish yourself somehow through your performance; later, the bigger you get, the more this performance promise resembles the performance promise of the other players in the market, because you serve more and more. And what matters then, and you can see Salesforce as an example, is that you have to become distinctive. Salesforce were the first to put the cloud into our heads, so to speak, and all the associations that came with the cloud. The lightness. And every IT manager says, I no longer have to maintain those stupid servers myself, it is all outsourced and so on. And the cloud, the cloud, so this distinctiveness that was created through these characters, the visual language, all of that, that is an extremely strategic investment. And then not thinking every few years that we need something new, something fresh. Nivea has been Nivea from the very beginning with minimal change, and then at some point, out of a feeling that we have to become more modern now, they started to dilute this blue circle with the white Nivea lettering. And then Nivea was suddenly silver and tried its hand in decorative cosmetics and so on. And only when they came back and this archetypal signal, blue circle with white lettering, appeared again on every product, did they have enormous advantages again at the shelf and also as a brand overall. So defining this distinctiveness of your signals strategically and then cultivating it consistently. That is the second point. Third point: touchpoints. The effectiveness of your touchpoint mix decides a lot about your efficiency, but also about the overall effectiveness of your brand experience system. So analyse the touchpoints and identify the ten strongest touchpoints you have, and among these ten touchpoints there may already be lighthouse experiences. And if you identify them, then put maximum focus on making that the remarkable thing that is told about you. That is where the stories come from again. Another nice example, also from the book, is a hotel that has the highest ratings on TripAdvisor and a huge following on Instagram, out of LA. And this hotel is housed in a 1950s building. So architecturally really nothing special, but they created a lighthouse moment, the so-called popsicle phone. There is a red telephone by the pool and when you pick it up, then: popsicle. Here is the popsicle butler, or I do not know the exact wording he uses, coming right up. And then a butler comes with white gloves and a silver tray and brings the homemade popsicles, this water ice, this fruit ice, on this silver tray to your sun lounger. And that is the Instagram killer moment and what everyone remembers. And then they do something similar at the farewell, at check-out. And there we are at this peak-end effect. Which means look for these lighthouse experiences and you will have a disproportionate result in your system. And there we are back at our lovely pendulum, our customers. Yes, that is exactly what happens. Those are the 3 tips I can give. Sharpen the performance promise, strengthen distinctive signals and an effective touchpoint mix, and do not chase after any trends but really look for yourself at what the touchpoint mix is for your own brand that leaves the most traces in the minds of the target group.

Joubin Rahimi

Olaf, thank you for the three tips at the end. But there is more, of course. You have the book, you could really dig into that, but you have more than that, guided reading, right,

Olaf Hartmann

We have guided reading on offer. We run masterclasses for it over two days, where we convey the system in practice. So next level brand management through brand experience, you can find all of that at Markenkraft Org. And the next round is coming up in Berlin soon, 22 and 23 June, and at a venue that makes special experiences possible.

Joubin Rahimi

I am curious. Is that a Saturday, Sunday,

Olaf Hartmann

It is Monday, Tuesday, Tuesday. So travel in relaxed on Sunday, two days of intensive input and then drive home inspired. We also have guest speakers on the topic of AI and on brand implementation.

Joubin Rahimi

So now some people have the agony of choice, K or the masterclass. Or both. Great, thanks again for the closing words and maybe we will see one or two of you there.

Olaf Hartmann

Yes, thank you. Many, many thanks to you too, Joubin. I think it is really great. I have watched a few podcasts or videocasts here and you have a wonderful way of getting people to talk and of producing added value for the listeners. So many thanks to you too.

Joubin Rahimi

Thank you, thank you. You are the heroes. I only get to ask the questions. Great, then we have that too.