February 10th, 2020/ Deutsche Telekom has outstanding positions in national and international brand rankings. We spoke with Chief Brand Officer Hans-Christian Schwingen about brand value, successful brand management and the workforce's pride in their company. In addition, Schwingen explained why he has decided to leave the company after over 12 successful years.
Mr. Schwingen, BrandZ's annual brand ratings have just appeared. Once again, they rate Deutsche Telekom as the second most valuable German brand worldwide. How do you view this result?
Hans-Christian Schwingen: It's a nice success, but also one that wasn't necessarily to be expected.
Hans-Christian Schwingen: A number of sectors are growing considerably faster than the telecom sector, and I would have expected trends in some of them to have come more to the fore in this regard. As it happens, the only change among the very top German brands is that Mercedes-Benz has pushed BMW out of third place. SAP continues to be the leader, followed by Deutsche Telekom in second place. By the way, we've seen another nice result as well: "Brand Finance Global 500" has once again ranked Deutsche Telekom as the most valuable European telecom brand.
For its rankings, Brand Finance looks primarily at key financial figures. BrandZ's analyses also take account of consumer data. What sorts of things do the consumer data they look at tell us?
Hans-Christian Schwingen: They tell us about positive associations from the consumer's perspective, associations based on the importance and relevance that consumers see in a brand. In addition, they reflect the degree to which consumers see a brand as standing apart from its competition. Then there is brand salience. This refers to the degree to which a brand enters consumers' minds first, before all other brands within the same category. All three of these aspects combine to make up a brand's "brand contribution," which is a measure of the brand's direct influence on consumers' purchase decisions. In terms of differentiation – i.e. standing apart from the competition – in particular, Deutsche Telekom is far ahead of Vodafone and all the rest.
Clearly, 2019 was a good year for the Deutsche Telekom brand. The brand was also honored with the "Red Dot Brand of the Year" award. How important are such awards?
Hans-Christian Schwingen: If you look at them by themselves, you might think they are no more than "nice to haves" that, at best, make a brand a little more famous and prestigious. But things are quite different when you look at them in the context of a tough competitive environment. From that perspective, a company's awards highlight the company's strength, market success and attractiveness for business partners and investors.
What priorities do you think the company needs to set in its future brand management?
Hans-Christian Schwingen: To answer that, it is useful to consider the jury's reasons for the award you just mentioned. We were honored for our outstanding design quality and for our consistent communication of our brand values. In particular, so the jury, our #TAKEPART approach is keeping our brand right in tune with the times: We won’t stop until everyone is connected to the opportunities of digitalization. More and more, this aim has to be the key focus of all our customer-centered concepts and measures – Deutsche Telekom needs to concentrate on socially relevant issues and work to unite our increasingly polarized society. This is about giving people, especially people in Europe, new perspectives, hope, and a more positive view of the future.
Magenta has been successfully launched in Austria this year as a retail brand in its own right. How do you assess this development?
Hans-Christian Schwingen: I am truly happy for Andreas Bierwirth (CEO of Magenta Telekom in Austria), for his being selected Man of the Year by Austria's weekly business magazine Trend. We are now back on track in Austria, with T-Mobile Austria's acquisition of UPC Austria, the new company's new unified brand and the country's best fixed and mobile network. Now that T-Mobile has been rebranded as Magenta, all key image indicators are trending skyward, including indicators such as brand preference and consumers' assessments of our network, our network speed and our price-performance ratio. I am convinced that our Austrian success can be an example for our other national companies, wherever they can also present convincing and substantial narratives.
What does that mean specifically?
Hans-Christian Schwingen: I think there's no stopping Magenta's momentum now, when I look at the future and our company overall. However, in addition to emotional aspects, such as the ways we have rejuvenated and revitalized our brand, we have to consider some very straightforward and rational factors. For example, Magenta, an abstract color brand, is increasingly being targeted in trademark disputes, such as the current case involving the American firm Lemonade Insurance Company. This is significant in that the Deutsche Telekom brand and the "T" are difficult to protect outside of our own footprint. All of this has negative consequences for other acquisitions, for harmonizations such as that achieved with Cosmote and for possible consolidation scenarios in Europe. We also see that T-Mobile, a one-dimensional brand, is no longer appropriate whenever an integrating fixed-network component is added – as in the case of Austria. A combined word-image Magenta brand, however, is useful in such situations, in several regards. And there's more: "Magenta," unlike "Deutsche Telekom," is something we can license, and earn money with, even outside of our original footprint.
In 2019, you were nominated, for the second time, for the "CMO of the Year" award. You won the award in 2016. In spite of the recognition and esteem you have received – also outside the company – you have decided to leave the company. Why is that?
Hans-Christian Schwingen: From my very subjective perspective, I have achieved everything I wanted to achieve and could have achieved. I now no longer see a really substantive role for myself, also as far as important impetus for the future is concerned, such as impetus for best practice relative to Magenta in Austria and for our increasingly value-oriented public positioning of our brand. What's left now is a matter of consistent, continuous brand penetration, of discipline and of persistence and endurance. I think that now is the best time for me to go, even though, emotionally, my departure will surely be painful. At the same time, I am confident that in Ulrich Klenke we have found the right successor. I hold Uli in very high regard, and I wish him every success.
When will the baton changeover be official?
Hans-Christian Schwingen: It will be March 31. Until then, we’ll work together to ensure an orderly transition.
Looking back on your time at Deutsche Telekom, what are you especially proud of, and what will you especially remember?
Hans-Christian Schwingen: There has been so much in the past 12 years that if I tried to list it all I'd probably forget someone or something. What immediately comes to mind is my team, my colleagues, the many encounters I've had, the many new experiences, all the projects, the many great events, all the campaigns, the awards, and so on and so forth. However, I guess two things really stand out. First, that the core idea behind our brand is based on an undisputable truth, namely that it is in our nature to need to interact and connect with other people, in order to develop and grow. In short, life is truly for sharing. And, second, that a sense of pride has become established at the company over all those years. We see that, for example, in the way more and more members of our workforce like to wear and use magenta-colored accessories in order to announce their affiliation with Deutsche Telekom. That fact that 80 percent of our employees say they are proud of our brand makes me very happy indeed.
What are your plans for the future?
Hans-Christian Schwingen: I'm keeping all my options open. I strongly believe that you have to close a chapter properly before your spirit can be ready for a new one. What's more, my work has left me with little opportunity to daydream about any new ideas along those lines. But I am sure I'll find something exciting to do.
Mr. Schwingen, many thanks for this interview!