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Stef Hamerlinck

This episode is fiery right from the start. Chris talks with brand strategist, Stef Hamerlinck, about the nuance of branding and why it matters. Though, the two don’t necessarily agree about any of it.

Why Branding Matters
Why Branding Matters

Why Branding Matters

Ep
79
Apr
20
With
Stef Hamerlinck
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Does branding matter?

This episode is fiery right from the start. Chris talks with brand strategist, Stef Hamerlinck, about the nuance of branding and why it matters. Though, the two don’t necessarily agree about any of it.

Stef has been a fan of The Futur for quite some time and has learned plenty about branding from our content. Now, working in the field himself, he’s encountering interesting coincidences and occurrences that sort of break the status quo, per se, of branding.

Take differentiation, for example. By definition, differentiation in branding means your brand has a unique edge that makes it stand out from the crowd in a way that attracts customers. Marty Neumeier points out in his book, Zag, that brands must be different and good.

What Stef points out, though, is that not all brands necessarily have to be different, and most brands aren’t really all that different. Visual identities help us distinguish brand A versus B, but if they’re both selling lemon-lime soda, their positioning is relatively the same.

He also adds that most people often buy products based on its physical and mental availability. If brand A is more widely available in vending machines, restaurants, and venues across the globe, and you see more of A’s advertising than B’s, you’ll quickly determine brand A is better than B.

Stef also adds that while visual identity is important, it’s not what creates “brand tribes.”

Now, that’s just the first ten minutes of this conversation.

If you are interested in branding, strategy and enjoy a healthy debate then you will love this episode. Chris and Stef get deep into the weeds of brand purpose, brand differentiation and why it's important for a brand to be just as good as it is unique. It's a talk about Coke versus Pepsi and McDonald's versus In 'n Out. Which is better? Only you can decide.

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Episode Transcript

Stef:
The key factor to growing your brand, to gaining market share, if you realize that most people buying your brand are not going to be these loyal tribe members that believe in your set of values, et cetera, then, the most important part is acquiring new customers. It's investing in mental and physical availability.

Greg:
Hello, and welcome to The Futur podcast. I'm your producer Greg Gunn and I'm still at home in a bubble of self-isolation. Fortunately, for all of us though, I've got a mic and a will to continue producing this podcast. Now, today's episode is fiery right from the start. Chris talks with Brand Strategist Stef Hamerlinck about the nuance of branding and why that matters, although, the two don't necessarily agree about any of it. If you are interested in branding, strategy, and enjoy a healthy debate, then, keep listening.

Greg:
Chris and Stef get deep in the widths of brand purpose, brand differentiation, and why it's important for a brand to be just as good as it is unique. It's about Coke versus Pepsi and McDonald's versus In-N-Out, even though In-N-Out is the clear winner though. Okay, don't [inaudible 00:01:39] at me, I kind of regret saying that. Please enjoy our branding conversation with Stef Hamerlinck.

Stef:
I sent you this letter, I was planning to actually send it to you physically, but I thought this will be quicker, and I wanted quick results. So, I just sent it to you through LinkedIn. So, what the letter basically said was that it was disengaging from a recent content from The Futur and the main idea why I said that wasn't because it wasn't good or anything like that. I love The Futur and it did a lot of things for me, but growing up as a brand strategist I've seen a lot of new resources, new people, thought leaders from different industries, such as marketing science and behavioral science.

Stef:
They bring a slightly, or be it maybe a completely different perspective to what a brand is and how a brand actually grows. So, a lot of things you've been talking about with, let's say, Marty Neumeier, whom I also really admire. But still, a lot of things such brand differentiation or brand purpose that are discussed are sometimes I think presented in a way that they are a little bit overpowered, or over used, while in reality, it's not always the case for a lot of businesses. So, I would love to have this conversation with you and bring maybe, hopefully, some nuance, or maybe you can just bring me back to the group, and maybe I'll [crosstalk 00:03:13].

Chris:
Come back to the tribe. No, okay. So, this is a great jumping off point then. Maybe we can compare the differences, because I only know what it is that I believe. I don't know what it is that you believe, and so maybe we can go point by point and have a discussion about that. So, let's start. Where do you think it makes sense for us to start?

Stef:
Well, let's maybe jump in with one of the biggest things, which is differentiation. Let's take it head on. So, this idea of differentiation actually started way before Marty Neumeier idea. What Marty Neumeier says, is basically when everybody [inaudible 00:03:53] you need to be different to stand out, this idea. This actually started a long time ago with, I think their name was Keller & Kotler, who are two marketing scientists. The idea, again, was to make company stand out, to be different, and that way, you will attract customers.

Stef:
Marty Neumeier added to that idea, the fact that a brand is a customer's gut feeling. So, I think that's still one of the key strong points, and I think there's nothing wrong with that fact. But then, he makes a bridge to saying that if you are different, you will attract customers. So, that's the whole concept behind differentiation.

Chris:
Oh, okay. All right. So, I don't think he solely says being different is enough to be a brand. You have to be good and different. Because there's different, like you're crazy, your hair is hot pink and you're wearing green pants, and orange shirt. It's like, you're a hot mess.

Stef:
Absolutely. I agree-

Chris:
So, there's bad in different.

Stef:
Yeah, yeah.

Chris:
But you want to be good and different.

Stef:
Absolutely. I don't think Marty is wrong in that case. I think, again, what he said about that gut feeling is really important. But there is a leap of faith that happens there, that if we actually understand that a lot of buying is about gut feeling. That's what a lot of behavioral science agrees on. Is that the fact that gut feeling is really something that happens almost unconsciously. So, most of the buying we do, actually, and this is scientifically proven in most case, is actually done almost like we're not really thinking.

Chris:
It's emotional. It's emotional, yes it is.

Stef:
Yeah. Well, and even emotional is a tough word because emotional kind it looks like we're still thinking about it, but our emotions decide. But in reality, it's almost like we didn't even consider it. It just happened, because there's this idea of, it's called system one or system two thinking. I don't know if you know this concept.

Chris:
I'm familiar, slow thinking or fast thinking, right?

Stef:
Well, yeah, it's the idea that most of the thinking happens in our reptilian brain, which is just like our unconscious brain, that just picks up signals and does a lot of the processing for us. Then, it gets sent to system two, which is like where we process these things and we make it rational. So, a lot of buying decisions actually happen on the level of unconscious buying, which means that for a lot of cases, meaningful differentiation doesn't really matter because people don't really consider that.

Stef:
It's really interesting if you look at a lot of data that, for example, if they test ... Let's do a test. Like, if you would open your fridge right now and you would take out some products, would you know the positioning or the purpose of these products?

Chris:
No. Not in the fridge, I don't think so.

Stef:
Yeah, so the interesting thing is, because let me point this to a person who actually wrote the bible on the anti-differentiation bible, that's Byron Sharp. He's a Professor in Marketing Science. He says that meaningful differentiation doesn't really exist. So, he doesn't believe in the fact that people buy stuff because it has a different positioning or meaning. He says that most buying is done unconsciously and you buy mainly based on the fact that the product is mentally and physically available. I want to get into that later.

Stef:
So, to get back to that point of differentiation, I think, yes, what you said, if Marty says that a brand should be good and different, that's already an important nuance. But oftentimes, a brand doesn't even have to be different to get good sales. That's what's interesting, because I think a lot of times-

Chris:
Do you have examples?

Stef:
Yeah, for sure. I think most brands actually aren't that different. If you look at Coca-Cola versus Pepsi, or any other, there aren't really ... Well, of course, they have their visual identity, which is distinctive from each other. But in terms of positioning or differentiating themself, they aren't really all that different, would you agree?

Chris:
No, I would totally disagree. Okay, so let's get into it. Because Coca-Cola has, for a period of time, been in a cola war with Pepsi, for decades. Then, the cola wars are over, because the number one selling cola brand is Coke, and the number two selling cola brand is Diet Coke. Pepsi comes in a decent third, and there's a number of things that are at work here, because a long time ago I think Coca-Cola positioned themself as the real thing, whereas Pepsi positioned themself as the choice of new generation.

Chris:
After watching their campaigns go on for a couple of decades, you start to realize there are always Pepsi, always chasing new, while Coca-Cola is telling you that if you want the original or the authentic, it's Coca-Cola. So, we start to align ourselves with different tribes. So, they've completely slaughtered them in the market where their market share is, they're not number two, they're number three.

Stef:
Well, there's really interesting thing about this, the question is, is the success of Coca-Cola due to the fact that they are positioned differently than Pepsi, or is it something else? That's what, again, Byron Sharp in his, because he does really in-depth scientific studies, this is not just like somebody assuming something. This is studies over different markets, over different categories. So, what he says is that, for example, why Coca-Cola would be more successful than Pepsi is because of these concepts of mental and physical availability.

Stef:
What that means is Coca-Cola is more readily available as a soda drink, that's by doing a lot of advertising, by just being out there in the world, by constantly advertising. But they're also more physically available. So, Coca-Cola has been known to be really good at distribution games. For example, Coca-Cola, everywhere you go in the world, you can buy a Coca-Cola. You can see a vending machine, you can buy a Coca-Cola, but the thing is, for a lot of consumers, if for example Coca-Cola is not physically availability, they might as well buy a Pepsi Cola.

Stef:
That's where there's a bit of an issue with this concept of brand tribes, because brand tribes, again, comes from the same school of, if you are different, people will lock into your meaning. So, they will become advocates of your brands. But what the study shows is that most of the revenue doesn't come from these heavy buyers, these loyal brand people, these tribes. Actually, most of the profits or at least a huge proportion of profits or revenue comes from light buyers, people that buy your brand, let's say, one time every year.

Stef:
So, there's an issue if we tend to over focus on this idea of brand tribes and brand loyalty, because in reality a lot of the numbers showed that it's not that big of a deal. For example, 72% of Coke buyers also buys Pepsi.

Chris:
Okay, but what does that mean? So, I think it's one thing to look at what has happened in the marketplace and find causal relationships, where you say like, Coca-Cola as really good at distribution, really good at advertising, so they can occupy both the mental and physical space of people. Then, they say, "Well, we only buy Coke because it's more available." That's like after the fact reading in, like, how did Coke become the dominant player? Because it wasn't always the way.

Stef:
Mm-hmm (affirmative). Yeah, well, that's the question. I think there's two ways to answer this. I think what that data shows, for example, is that in a lot of cases it is about being physically and mentally available. You don't have to be always that different to be successful. I'm not saying that differentiation can't be a good thing. There's these beautiful brands like Nike and Apple that are really successful in doing these things. But there is also millions of companies out there that aren't differentiated but just understand really good what their category is about.

Stef:
They played that game really well, and they are successful. So, I'm not saying differentiation can't be a strategy to win, but I'm saying that differentiation isn't the only strategy to win. The danger is that if we all try to create brands that are so meaningfully different, that there's this endless storm of people trying to positioning their brands so specially, while actually people, consumers that want to buy, they have a certain expectation about a certain category. They just need the right product at the right moment.

Stef:
That's oftentimes more important. So, I think what the issue is here is I'm not trying to say that being different is bad, I think just that sometimes it's a lot more nuance. When we're trying to help brands grow, that's realizing that this is not the only factor of growth. It's not the only thing that will make your brand successful. For example, things as distribution and just mental availability are almost as crucial as differentiation. So, I don't know if you're feeling this idea where it comes from.

Chris:
Well, I don't think Marty or myself have gone out and said that differentiation is the only thing that matters.

Stef:
No, no, no.

Chris:
I don't think that's it at all. So, I think it's helpful to have a more nuance conversation but that doesn't meant that the nuance overpowers the core principles. So, let's talk a little bit more about this, because I like to talk about things in the concrete. I remain open, obviously, you sound very well read and research on this. This is wonderful to have a conversation with somebody who is so well-informed. Now, let me ask you something. Do you think when you buy something it says something about who you are or who you aspire to be?

Stef:
I used to think that.

Chris:
Not anymore?

Stef:
I think it's, again, it depends on, especially, the categories.

Chris:
Okay.

Stef:
So, there are some more highly emotionally involved categories, maybe cars, maybe clothing. But in a lot of cases, when I start to look at the things that are around me, for example, right now, I'm in my desk in my office space. If I look around me, the clothes I wear, the things I'm drinking, I'm eating, I'm buying, I would say 80% of them is completely not to defect that it fits my values, or anything of that matter. So, for most brands, I don't think it does matter at all. What also happens a lot is that I post rationalize. So, again, that system one, system two things. For example, Patagonia is one of my favorite brands when we talk about brand purposes.

Stef:
It's a beautiful brand, and also, what they are doing, it's amazing, I love them. But the funny thing is, I saw Patagonia pop up here and there in just probably hipsters wearing it, I was like, "Whoa, this is cool brand." I love outdoorsy stuff, so I was hooked by it, almost like unconsciously. So, I bought it and after I started reading more and learning more about this brand, so I bought into this idea. So, I fell in love after the fact, but it wasn't per se the reason I bought, it wasn't the fact that they had this strong purpose. So, even sometimes when we do believe we own this brand because we believe in it, sometimes, that happens after the fact.

Chris:
Okay, let's talk about Patagonia. This is an awesome thing. The Patagonia clothes that you buy, chances are quite more expensive and pricier than alternatives. But for whatever reason, you decided, without the rationalization in your reptilian brain, your system one thinking said like, "I want that." So, why did you buy something that is sometimes 20% to 50% more expensive than a commodity alternative, why?

Stef:
I think it definitely has to do with the power of branding. A brand sends out signals that indicates a certain price premium that might work, but I'm just saying that, was it a rational decision that I bought it? No. I think it was something that happened on a different level. So, I think this is where this concept gets confusing, because you might say, "Well, it is differentiation on the unconscious level." And I would probably tend to agree with that. But I think what Byron Sharp, for example, is referring to, is meaningful differentiation.

Stef:
So, saying we are different because we believe X, and people buy that because they also believe X. He says, "That is not really a huge factor." There's enough science to prove that. I can give you an example. I'm just working on a jewelry brand right now and I'm doing research on why do people buy jewelries. One of the questions was to rank the most, let's say, the most deciding factors on why they would buy a certain jewel. One of those factors was, for example, the purpose, or the meaning, or the story behind the jewel.

Stef:
So, if you rank out that versus, for example, the style of the ring, or just the fact that it has a certain quality, those things such as purpose, or meaning, always rank really low, which is different than what a lot of people talk about today. So, that's interesting to me, for sure.

Chris:
All right, I still want to stay on Patagonia here, okay?

Stef:
Yeah, yeah, for sure. Let's stick around.

Chris:
You're making an irrational, impulsive, emotional, or whatever gut feeling system one thinking decision to purchase, and I'm in alignment with you there, because there's not even logic to understand why you did that. But you did pay more for something. You went out of your way to do something, and there's a decision that's being made, whether you understand it or not, whether you can trace back their messaging, their marketing, or what, we don't even know. But you told yourself a story about why you want to pay more.

Chris:
You might tell yourself it's better made, or you might say that the design is nicer, but there's something much deeper than that. I think somewhere along the way in your life, you may have seen somebody wear it, or you may have heard of something, or somebody else, and you became curious about it. Maybe you didn't store it in your long term memory, but it's there, it's this feeling, and you go and then you buy it. So, here's the thing, it's like, I still want to stick on this thing, it's like, you say to yourself, you will say, 80% of the stuff you buy, you just buy randomly without a reason.

Chris:
But you're buying still into that emotional, gut feeling, system one thinking. So, Patagonia has done a decent job of telling their story, and there's a story that we tell ourselves, just because something is more expensive that it must be better, that more people must prefer that, or I can afford this, or I deserve this. So, there's a lot of stories that you're telling yourself and you're looking for meaning and for identity. So, I'm going to challenge you a little bit. I'm looking at you right now. What brand of headphones are you using?

Stef:
Let me look at the logo.

Chris:
Yeah, mm-hmm (affirmative).

Stef:
Oh, yeah, it's Phillips.

Chris:
Phillips. Now, why did you choose Phillips?

Stef:
I have no idea. I know this is going to sound like he's trying to prove a point. I actually really have no idea. I just think, I went on a certain web shop and looked for decent quality headphones, and that [crosstalk 00:20:23].

Chris:
With the highest reviews?

Stef:
No, but it's probably at that the moment in time I was looking for cheap headphones, but I have more expensive headphones as well, which I probably researched more. So, if I had worn those from Sony or something, you would probably be in the better questioning line.

Chris:
No, no. See, so the thing is, you still make a decision, one way or the other, like even when you buy something cheaper.

Stef:
Sure, sure.

Chris:
Because I had this debate with somebody recently. Well, buying something cheaper says to the world like, "I don't care. I value other things." So, everything that you buy says something about you, and I really believe this. Even in your non-participation of it is your participation in it.

Stef:
I agree in the sense that everything you buy says something about you, and that moment in time you were doing something. So, it always says something about you. But the thing is, for example, Patagonia is this great example because what is interesting is I bought, let's say, one, or two, or maybe three T-shirts, really satisfied with the quality and all of this. But now, I'm buying different clothes, and this is what, again, comes out of this science, is that people, even loyal people tend to be like the, he calls it, cognitive misers, or something. It's a scientific approach, but it's the idea that we tend to be loyal but not for so long.

Chris:
Sure.

Stef:
So, that's normal, but the problem is if we, for example, if we tend to over focus on our brand tribe, we can call it that, if we tend to focus on our loyalty, we are in a big ... there's a big risk involved here. Because as a brand, if you're only investing in your brand tribe and not in acquiring new customers, you're at the risk of just ... You know this term, the leaky bucket, where just this idea that people, even if they are loyal they tend to just skip out. Or, the idea of the sales funnel is leaking at the bottom, because people, they skip brands even if they're satisfied with it, even if there's a big story.

Stef:
So, for most, especially light buyers, it's actually not that important. Meaning, even if they like the story, they move on, they go to a different brand, so what is the key factor to growing your brand, to gaining market share if you realize that people, that most people buying your brand are not going to be these loyal tribe members that believe in your set of values, et cetera. Then, the most important part is acquiring new customers. It's investing in mental and physical availability.

Chris:
So, why do they need people to do branding?

Stef:
Because branding is one of the most important aspect, but what happens sometimes is we tend to ... So, we focus, let's say we as designers, we're specialists at branding. We know how a color, how typography, how all these things work on these signals, these gut feelings, and that's what we're really strong at. So, I 100% believe that, and that's what science also shows us. But what then happens is we started going into brand strategy and we start also defining brands in words, and we start positioning them.

Stef:
Sometimes, we start actually, for example, not just asking a client like what's your positioning. We start telling them, "Maybe you should be positioned differently." That's where the danger comes in, if we think that, for example, if we think about this concept as meaningful differentiation and positioning. If we think that they will automatically attract customers because we are positioned differently, in reality, science has shown us that for most brands, for most companies, differentiation won't attract customers automatically.

Stef:
Meaning, they won't flock to your brand because you're special. You need to be out there. You need to have share of voice. You know this. With The Futur I think you're building a huge brand, but it's not like you are just standing in a room and people are flocking to you. You are building a lot of efforts to build brands. I think that's, again, I think I kind of lost track here of this idea, but branding, to get back to your point, so why is branding important? Because what he says, it's not about differentiation, it's more about distinctiveness. So, distinctiveness, that's the key point of branding.

Stef:
It's how to be recognized. When people see, for example, just a 10% portion of the golden arches, they think McDonald's and they automatically probably think something like hamburgers or they associate. So, these distinctive assets are really crucial to branding, but those aren't per se on the level of meaningful differentiation. Those are more like, if you see a color, or typography, or a combination of just elements, you know that's the brand and you immediately associate the category with it. So, you feel like buying it.

Stef:
Then, of course, there is this next level again of this, you need to be physically available. So, if you can be mentally available by showing your brand and being recognized, then you need to also be able to be bought easily. So, if I want to buy a course from The Futur, I need to first recognize that The Futur is that brand. I need to be able to associate it by this mental availability. But then, also, I need to be able to buy it at the right moment, at the right place, without doing too much hassle.

Stef:
Otherwise, I will go somewhere else, and this is what he has, like Byron Sharp, has shown a lot of times, that even people that aren't loyal to let's say, Phillips, I don't like this brand particularly, why did I buy the Phillips headphone? Because I really don't like this brand. I have no preferability for this brand, whatsoever. I bought it because it was physically available, and probably, because also when I saw the name Phillips, it did ring a bell somehow, that it was an electronic brand. So, you see what I'm saying? Even Phillips could be successful without being completely different to me, by just being physically available everywhere.

Chris:
Yeah, I guess there's a lot of things to talk about. So, when you mentioned like physically available and mentally available, is there something in your life, because I'm maybe a very different kind of consumer than you, where you go out of your way, like you go to the back of the store, or you drive from store to store because what you want isn't available?

Stef:
It happens if the desire is very high, but I'm trying to think of an example, but for most cases, it's probably not going to be case. But I can imagine I probably did some more efforts for certain brands to get it, I'm sure, I'm sure.

Chris:
Right, so for example, McDonald's is pretty ubiquitous here in America, but there's a far few number of In-N-Out burgers where people will say, like they'll drive past five or six McDonald's to go to In-N-Out Burger. Maybe I'm more particular than you, but almost everything that I buy I'm very particular about what it is that I buy. So, there's a brand of sunblock that isn't available in most places, so I just don't buy even though there's 100 other alternatives out there, I just don't buy it. I either go to Amazon and buy it.

Chris:
So, I'm very specific about what it is that I buy and what I put in my body, and what companies I wish to support. Whether I have a full understanding of who they are and what they really do is irrelevant.

Stef:
No, I agree and I understand what you're saying, and I think because maybe it started sounding like I was just this person that just buys random stuff. I'm absolutely not, because I'm obsessed by brands. I'm actually really bias probably, because I pay attention to messaging. I pay attention to everything because it's my job, basically. But if you look at the big numbers of just all of these categories, how people buy, and I'm talking really about volumes here. I'm not talking about as just individuals, and why is volume important, it's because it's sales revenue.

Stef:
There's a huge difference between, for example, me and you saying, "Well, we would drive the other way." Maybe we're 00.000% percent of that brand's revenue, and if you look at all buyers of a category, of a brand, there's pattern that emerges and it's always the same. The pattern is really that most light buyers just buy different brands. For example, Coca-Cola shares 72% of its buyers with Pepsi. So, this is a scientific pattern, and that doesn't mean that the other 30%, for example, is really loyal to the brand and that they really are excited about the brand and that they go extra ways to do that.

Stef:
But that problem is, the question is really, and this is I think an important nuance to make here, I'm talking about gaining market share. Not all brands or not all companies they're only goal is to gain market share. Maybe your goal is to build the best brand and to build the best customer service. This is something completely different, but if it comes to growing your market share, becoming the market leader, you'll probably have to do a lot of these things that aren't that fun. Actually, it's interesting to me, if you look at big brands, they're usually positioned really wide.

Stef:
They target everyone, they are really brought in the sense that ... and that even happens on agency level. If you look at, for example, our industry, small boutique agencies have smaller customer bases that are more loyal. Well, not more loyal, but they have just smaller customer bases, because they are positioned more that's niching down. But if you look at huge agencies, there are almost all the time really full service because they have a bigger customer base and they tend to have more customers that way. So, can you see the pattern I'm talking about?

Chris:
Yeah, okay, so I'm going to have to ask you for a favor on a couple of different things. Because you talk for a very long period of time and you're bringing up many points and moving from one thing to the next. I like to narrow in on one or two things to see where our potential differences are, so that we can have a rational and deep conversation about it. So that we can be both better informed and the people who are listening to this episode can have the same feeling about it, okay?

Stef:
Sure.

Chris:
Now, one thing is, if people are indifferent about what they buy, let's just pretend because you're like, "No, I'm actually more particular than what I was saying." But let's just say like there are people out in the world and quite a few of them that are indifferent, like one brand or another doesn't matter. Like my dad, he doesn't really care. Whatever is available, whatever is cheap, that's what he wants. If that's the case, there is no point to try to market to those people.

Chris:
There is no point to build a brand because whatever is more available in the moment, they have zero brand affinity or loyalty to them. So, there's no point, can you agree on that or no?

Stef:
No.

Chris:
Okay, let's talk about why you [crosstalk 00:32:01].

Stef:
No, it's a fair point, but I think that's the thing. So, first of, nobody is really indifferent or not indifferent. I think you can be indifferent at certain points about certain categories, and it all depends on just like ... I can be really indifferent about a category at a certain point and an hour later I can't, or two days later I can't. Again, this example of the headphone is a really good example. One day, I was really, I wanted to buy this decent headphone and the brand mattered to me, and the quality mattered.

Stef:
So, I invested a lot of time on it. The other time, I just needed a headphone quickly, and so I ordered the first one that was physically available. But even then, when it is about just that physical availability, there's also, again, this concept of mental availability. So, it is important to be, as the people say, it's important to be top of mind, but what top of mind means for somebody that thinks in the differentiation mindset is different than what somebody thinks in the availability mindset.

Stef:
Availability is more about the fact that just thinking about, let's say, brand, there's a certain brand that comes to mind and that's about it. When you think about in terms of differentiation, it's almost like you think about the values and the brand that comes along with it. So, there's just this spectrum of nuance. So, being indifferent is not, I think, this idea of some customers are and others aren't. I think it's just a matter of context, and timing. So, I would say like it's hard to say that indifference is a thing for ... it's like another segment of people or anything. It's just we all are indifferent sometimes.

Greg:
We're going to take a quick break, but we'll be right back.

Ben:
Hey, Ben Burns from The Futur here. If you don't recognize my voice, you might know me from our YouTube channel as the friendly guy with a big beard. Yup, that's me. Listen, The Futur's mission is to teach a billion creatives how to make money doing what they love without feeling gross about it. Let's be honest, historically, we creative types are great at producing the work but not so great at running the business, especially when it comes to things like sales, marketing, and money. I know, personally, I used to struggle with all of those.

Ben:
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Greg:
Welcome back to our conversation with Stef Hamerlinck.

Chris:
When you're indifferent, what is the point of trying to sell to you? It doesn't matter. Only availability, according to you because if-

Stef:
Mental and physical, yes.

Chris:
Yeah, I get that. So, we'll just say availability as a shorthand, mental and physical, right? So, if there was a brand of a Sony headphones that are of the same price, that were in front of you, you would have bought that. So, we only can impact material change in people's lives or influence when they're ready for it. Whether they turn on rough, it doesn't matter. So, for example, like I said, again, my dad doesn't care about headphones. Almost everything, my dad would just prefer the cheapest thing.

Chris:
That's his own identity, okay? He's a very frugal person. So, anything that sounds expensive, it leaves a bad taste in his mouth, except for liquor. So, see? If I'm a liquor guy, I want to talk to a passionate group who really care about the kind of liquor they can sell. He doesn't drink a lot, so when he drinks, he's like, "I understand this is really good and this is not good." But it's still a story he tells himself based on the bottle, about the design, the packaging, the colors, and the graphics, and the heritage of that, or the prominence of that bottle, right?

Chris:
So, it only makes sense to signal to people who are open to signaling on our level. Now, I also feel this way. Daniel Pink writes about this in his book, he says, "We are living in an age of abundance right now where we live longer, we have more than what we need, we can eat. We have a problem with obesity, at least in this country, and there's a lot there." So, we've transcended this period, like in a very short period of time, where we have a lot of choices and we're looking for transcended experiences throughout our lives.

Chris:
We're becoming a more or a dematerialized culture where we want experiences and feelings rather than physical things. We pay more for less now, and you could argue with that if you wish.

Stef:
I don't know if we've changed all that much in the sense that ... but this is just, again, I've been reading a lot about these heuristics and these unconscious things. I think the way we buy hasn't changed significantly in let's say, ever since our economy or capitalism just started for that matter. Because most of the buying is done on that level of reptilian brain and that hasn't changed at all. So, I think the idea of not being open for signaling is not really through your unconscious brain.

Stef:
It's constantly trying to process all these signals that are out there and branding has a huge role to play in being distinctive enough to be noticed by that processing system. So, I'm not sure if it's like in a matter of being open or not open. I'm not sure it's like, if you say ... Because I feel like you're saying that if this world is true about meaningful differentiation not being that important, then, advertising doesn't matter, then branding doesn't matter. Is that what you're trying to say, if just like hypothetically?

Chris:
No, no, no, hold on. Say that one more time.

Stef:
So, if supposed this theory I'm bringing to you, this idea that meaningful differentiation doesn't exist, and your point would be that if that's true, then advertising or branding doesn't really have any use?

Chris:
Probably. I wouldn't say it the way that you said it, but if you're saying it, like you know what? We don't join tribes. We make impulsive decision based on no data, and there's no point to any of this, then why be in the branding and marketing space? Except for the fact that you could just repeat your message to have the mental availability and make sure you win the distribution war. That doesn't jive with the observations in the world that I live in. Meaning, the more you advertise to me, the more you drive me away.

Stef:
Mm-hmm (affirmative). Now, you know what's the problem with this whole, I think first time I read it, I also was really like, it doesn't sound really like, it doesn't make us humans sound really ... The whole theory doesn't sound sexy, or nice, or even from a branding standpoint, it doesn't make that sense. I think what the problem is here is that it is like it establishes a baseline for a success. But that doesn't mean we can build meaning and stories on top of that.

Stef:
But what my problem really is here is that, well, problem, I mean what frustrates me sometimes is that we tend to ignore the baseline of what's important and we just skip over that. We just talk about differentiation and brand purpose, because that's really important. But I think we tend to forget that there is this baseline of how to grow a brand that's really important. Physical and mental availability are just these two things, or availability in general, it's just this thing we need to grasp before we can start thinking about it.

Stef:
I can give you an example of an industry that's really hurting right now because they ignored it, and that's the whole D to C industry. You know this industry, I suppose?

Chris:
Is this direct to consumer?

Stef:
Yeah, so D to C, let me get, for example, Casper or Dollar Shave Club.

Chris:
Okay, okay, sure, Dollar Shave. Let's focus on Dollar Shave, that's what I recognize. Go ahead.

Stef:
Yeah, so Dollar Shave Club, they have this idea of like, "Well, okay, we're going to create this cool brand that doesn't have the typical distribution channels, that ignores the whole typical retailer like Gillette, for example, that are in all the big stores." They cut the middle man sort of speaking, and so they go direct to consumer. This all sounds really good. I was a huge fan of this idea, but now, it seems that a lot of the D to C brands are actually failing. They were hugely over valued, for example, Casper.

Stef:
There's a lot of D to C brands, there are some articles about this, that are failing because they actually ignored the fact that a lot of these distribution models and this whole fact about how mental and physical availability works was ignored, for example. If the idea is, you need to target the whole category instead of, for example, a niche, what I think is typical in this idea of differentiation, find your niche. Sorry, I'm also, again, making a lot of words, so stop me if I'm going too far.

Chris:
But can you just say it shorter because I'm following you. Yes.

Stef:
Okay, D to C, the problem was, they thought, let's ignore traditional brands with their distribution channels, with their big advertising budget. Let's target millennials through digital media and let's ignore this whole model. It seems that it's not working because the fact is that they didn't have enough sales volume. They tried to focus too much on loyal customers. They try to differentiate them in a way, and they ignored the fact that just these, again, that baseline that I said about physical and mental availability, they ignored it.

Stef:
What's happening now is that a lot of these D to C brands, such as Casper, such as Harry's, such as Dollar Shave Club, they are advertising on television in subways. They are being in retail stores, they are trying to open up, they are trying to target more people with a broader message, and they are trying to be, well, let's say, less maybe differentiated. So, it is an issue. You see, if you ignore that baseline, it can be a problem. It's not a problem to be different if you didn't ignore the baseline, let's say Apple or Nike.

Chris:
Yeah, so I think there's a lot of things that you're talking about there, and I don't want to get into their business model because there's more to it than just that. Dollar Shave Club basically came out of nowhere, right? So, say, there's a market share of 100% for razor blades and Gillette probably owns all of that for a long time, I don't know any other brand besides Gillette. Then, all of the sudden, these guys come in and they start to carve out market share from zero. How do they do that? They do that through differentiation.

Chris:
If they were to try to compete against Gillette on the shelves with their advertising, they don't have the budget, they don't have the distribution, they can't buy the shelf space. They have no start. So, they have to create this story, and the story is this young, hip CEO, says, F this, F that, and we just make a really good blade and this is what you need, and we'll cut out the middle man. They made an outrageous campaign. That message either resonated or did not resonate with its audience. But enough people apparently signed up to get their blades.

Chris:
Later on, we have to make sure that the quality of the blades lives up to the promise. Then, they're going to have growing pains that you can't sustain yourself just doing the same thing because it's relatively small. But in the relatively short period of time, in the last five years, a company like Harry's and Dollar Shave Club are now next to Gillette. I'm pretty sure Gillette is not happy the fact that whatever market share they had, they have to now give up some of it to these other upstarts.

Stef:
Mm-hmm (affirmative). Well, yeah, there's just the fact that Unilever, who owns Gillette also, bought million Dollar Shave Clubs, but it's true, that the fact that they were ... They had two options. We need to buy this, because they are probably afraid, or we need to just let it go and let it grow. So, they bought it for a completely crazy over valuation. A lot of people say that, but I don't know if that's true, but at least they did something. Actually, I agree, they entered the market, they used differentiation, they were really aggressively, and they scared some people, and they did that really successfully.

Stef:
But there is an order here to things, and I think that's where maybe a lot of nuance in this discussion is from. Probably, when you are entering the market, it's smart to be niched, to be differentiated, to have a certain audience to focus on. But once you start growing, once you start becoming big, you need to be more open, you need to target everyone in the category. You need to acquire new customers. So, you see where this is going? It's almost like it's a chronological thing. It's not differentiation doesn't matter.

Stef:
It's more like differentiation matters, but the bigger you want to become, the more market share you want to gain, the less it matters. I think that's what the book is really talking about, is only if you really want to achieve that huge market share, then differentiation isn't the strategy to go for.

Chris:
Okay, let's talk about that. So, I think most of the brands that we work with are not going to be the 800-pound gorilla. They're not going to be the market leader. They're not going to have the lion share of the market. Now, maybe your client base is different. I'm not working with Unilab, or I'm working with the upstarts. So, the only viable strategy is to find your tribe, find your audience, create a message that's authentic to who you are, that might resonate with them, and that's your best strategy moving forward.

Chris:
Of course, as you scale, your strategies change, and then, you have to continue to think about growth. Now, let's talk about Tesla, because Tesla was this nothing company with a big audacious idea and dream. They started to appeal to a very small segment of the market, and they realized too that in order for them to compete and survive, they have to make a vehicle that a mass audience can buy. They have to be able to change the narrative, right? They have to change the story so that they can do this. Of course, Tesla is making some in-roads, and we'll see where they go.

Chris:
The story is not done yet, but if over time they start making gasoline or petrol-based vehicles, they start to lose who they are in the pursuit of a bigger market. At which point, the next Tesla will come in and replace them. So, Tesla has been able to innovate. Now, I recently came back from Europe, and they were telling me about how the big auto manufacturers in Germany are freaking out over Tesla. They're all trying to get their electronic cars and platforms up online because they were asleep. They didn't serve an audience that was changing.

Chris:
So, of course, over time, you need to evolve and change. But when you start to dilute yourself to become all things to all people, you're opening yourself up to a new person that's going to come into the market, a brand that's going to then speak very passionately about something that they feel in their heart, and they're going to be able supplant you over time.

Stef:
I think this is a great point that you're bringing up. I think what's the difference here, again, is this idea that Tesla is really about technological innovation. They created practically a new category. Well, it existed, but was really small. They created a new category. So, the fact that people were buying electric cars from Tesla makes sense because they just created this whole new idea. But on the level of meaningful differentiation, again, I think it's a lot in the words, as you could see, like disruptive innovation can surely bring you forward and become a successful company.

Stef:
Although, there's also a lot of disruptive innovation that leads to nowhere, or a lot of startups that fail, but Tesla didn't. So, I think, again, there is this idea like, let's suppose all cars now are electric, and then, we can start comparing them on meaningful differentiation. Then, you would probably see that, again, there are these other forces of being as much available and being advertising as much as possible, being louder than the rest would probably gain you more market share than just having a different meaning, or a different concept.

Stef:
So, can you see what I mean? The difference between like this technological disruption or differentiation, versus this meaningful differentiation?

Chris:
Yeah, well, you talked about that. So, Tesla did not invent the category, not even by a long shot. Electric cars were available at the beginning, it just was the idea that was killed by a better marketing probably. Then, we went with the way of petrol, right? But General Motors, I believe, had a vehicle called the EV1, Nissan has a Leaf, but these things did not sell in volume. Why is that? There's a lot of different reasons. I think what Elon Musk did is a pretty brilliant stroke of positioning, because we're talking about positioning doesn't matter.

Chris:
Well, he goes on stage and he's talking about the Model 3 I think, or something like that, or the Model X, I can't remember. But he's on stage and he's like, "I want to introduce you the new model that we're building, but before I do I want to remind everybody why we're here." So, then he reframes the conversation. He says to the audience in attendance and where it's broadcasted worldwide, he says that, "We're facing the greatest threat to humankind on a scale that we can't even understand. Here's what's happening in the environment. To reduce our carbon emissions, we need to do X, Y, and Z."

Chris:
So, he goes into this whole thing, and he says, "Everybody that bought the original Model T Roadster, thank you for doing that, because you made it possible for us to launch the Model S. Everybody that bought the Model S, we thank you for that because then it allows us to launch the Model X." So, they're moving more and more towards mass appeal and consumer cars and vehicles that the general audience can buy. So, he's reminding people not that you're buying a car, but you're helping to fight global warming, to reduce our carbon footprint.

Chris:
So, here's the thing, soon, we're going to associate all of this out with him, and the batteries, and the solar panels. He's building a whole ecosystem around this idea. So, when Porsche comes out with an electric car, Mercedes, and BMW, they're all coming online with electronic cars. I'm curious as to how well those will perform relative to Tesla. Because whoever dominates the market share, whoever is first or the biggest gobbles up more than 60% of the market.

Stef:
Well, I think I agree in the fact that I'm curious as well. I think if I would place my bets, I would put my bets on the brand that has the loudest share of voice. Meaning, the brand that can make more noise in these categories than others, and noise that can be, for example, Elon Musk, he's a genius at making noise because his personal brand, the way he interacts media, they love it and they buy it. So, he creates almost, I think more earned media than a lot of other car brands have to pay for in ads. So, I think that's a really strong positioning, a strong, yes, positioning.

Chris:
See?

Stef:
See? Well, I think, again, this is where I still, I'm doing brand strategy from day to day, positioning is a huge part of what I do. So, I'm not trying to say to anyone listening like stop doing this whole positioning thing, it's useless. I'm just trying to say like, your positioning won't automatically attract customers.

Chris:
Of course.

Stef:
If Elon Musk didn't have the muscle to create all the noise, the personality, if people wouldn't have talked about Tesla that way because of the press would have talked, all the other media, that brand wouldn't be as big. If they wouldn't be able to be bought anywhere in the world, if they wouldn't have big facilities and car dealerships, and distribution, you wouldn't buy it. So, I think I agree that having this brand and the strong personality is amazing. That's what we do as a job, but again, understanding what lies below that is important, because there are a lot of brands that just said, "Well, let's skip the other things.

Stef:
Because for example, if we have a strong purpose, or if we have a strong positioning, then, we won't need all of this stuff." I've had a lot of clients, I have a lot of discussions that they say, "Well, we need a brand purpose, for example, because now everybody has a purpose and it's really important that we have our own purpose because that will make us a more attractive brand." I don't think that's always the case. Do you buy from Amazon?

Chris:
I do.

Stef:
Do you know what the purpose is from Amazon?

Chris:
No.

Stef:
No? So, Amazon is the biggest retailer in the world.

Chris:
Yes.

Stef:
Do people know why Amazon does what it does? No.

Chris:
No.

Stef:
It's convenience, it's mental and physical availability. Is that the company I want to run, is that the brand I want to create? Absolutely not. I'm disgusted by it but I still go and buy on it because that's how harsh this baseline can be. So, it's the same with ... there's this other, I don't know if you know Ryanair, for example.

Chris:
No.

Stef:
It's an airline, it's a low cost airline here in Europe. It's really like, it's so shabby, but they have a brand. They have a huge brand. All the people know them, and I've flown so many times with Ryanair. Despite the fact that I hate all the stupid things, the way they cut costs, but sometimes, I just want to fly really cheaply to Barcelona and have a cool weekend. They're mentally available because I know Ryanair cheap airline, and they're physically available because I can do it immediately. So, you can see these things are as important. That's what I'm trying to say.

Chris:
Right, so Ryanair, I'm not familiar with the brand and they're positioned as cheap, but not great. For anybody who wants a cheap but not great experience, that's the airline for you, and that's their positioning. Now, you had said something which I've never said the opposite, so I don't think we disagree here, which is you're saying differentiation and positioning do not automatically equal something tangible result. Nothing is automatic.

Chris:
Nothing is guaranteed, but basically, if you don't understand positioning, putting your product in the right place or the right price in the person's mind and in a physical way, you probably don't have a great shot at success. Almost every company that we can talk about started as a little tiny disruptive company. They didn't do everything that the big companies did, but they did something really well, and they had a story that people like us would share with each other.

Chris:
They eventually would enter into the market place, to a certain point that they become then the market leader. This is just about growth and change. So, it's easy for us to say like, what does Amazon stand for? Well, I don't know what they stand for. But at the beginning, they did have a focus and a niche. They sold books, all kinds of books at a pretty good price. So, that was their positioning. They've expanded way beyond that. Now, here's the thing.

Chris:
I don't think I need to understand their purpose or their mission, but I do understand something about the company, in that Jeff Bezos is a radical visionary and disruptor himself. What he does, I do believe him. You think it's a horrible company, I don't. Because he's trying to do this very inclusive thing, where because I'm a Prime member, he's giving me music and he's giving me books on access, and he's also giving me videos that I can watch, it's just all part of my membership.

Chris:
So, he's not trying to nickel and dime me for every little thing, and I appreciate that as a consumer, even though I don't watch a lot of Amazon Prime content.

Stef:
Sure, but do you think that most of the customers that aren't in our field would really care about what Jeff Bezos is about?

Chris:
I can't speak for anybody else except for myself, right?

Stef:
Yeah. No, I think that's where ... I'm the same. I look at these companies, I look at how their brands are on, and I admire them, or I don't. I think we are in this industry, so it is different for us, and that's okay. That's fine. We can admire a company for what they do or how they do it. But I think it's just sometimes if we take a step back and we just look at, let's say, the numbers, then, there is this thing that if we tend to forget ... Like, let's say, I've studied this idea of brand tribes. I love the idea, I'm in love with it.

Stef:
So, I advise to my client who has like let's say, because we said companies of scale, but a scale in your markets can be really ... That can be a small market. See what I'm saying?

Chris:
Yeah.

Stef:
So, let's say I advise this company, "Well, you need to focus on building a brand tribe, because that's the way you're going to win. That's the way going to be ... " Then, you give these examples of Apple and all of this. The problem is, it might be that actually for them to grow they need to focus on acquiring new customers more than they need to focus on loyalty. Because it might be the fact that there are already maybe, let's say, a medium player in that market. To grow, they don't need to focus on their smaller tribe.

Stef:
So, it really depends not only on if you're working for, let's say, Amazon, or Unilever, but it also depends on what is your position in a smaller market. I think even from a starting point, you could work with this idea of, how can we get as much physical and mental availability without being completely different and still be successful. I think that's possible.

Stef:
I think there is a lot of brands that actually do that, but they're not talked about as much because they don't stand out in the market place. So, maybe we're biased as industry people because we only see what sticks out, but we don't always relate it to the money. That's just a thought.

Chris:
Yeah, I think it would be irresponsible for anybody that wants to legitimately call themselves a brand strategist to focus on only the things that we care about and not to be concerned about the bottom line. The bottom line is what keeps them in business, which allows them to further their mission and their cause. So, I'm not an advocate for that, okay? So, let's just be clear about that. So, when you say that a brand, maybe they have got good penetration on a very small market, or a medium sized market, it doesn't really matter, their whole point is to grow their customers.

Chris:
You can grow your customers by attracting a different kind of customer, or doing a better job of telling the story about why people buy what you do. So, I think Tesla has done a great job of just telling their story over and over again, so that more and more people become aware of their story. Not necessarily going after a totally different customer who's never going to buy an electric car, because that's chasing, I think, a whole different market.

Chris:
When you do that, you alienate the market that you're in, because they're like, "You have a split personality. I don't know what you stand for anymore." Then, that could become very problematic. So, I think you, because you are living and working as a brand strategist, where I'm not, I'm just making observations here, okay? You owe it to your client to look at the problem in the most unbiased way that you can as a human being, and try to understand their goals and align that with a strategy that is going to get them there.

Chris:
That could look very different. It could be like, "Let's run promotions, or let's run a blitz marketing campaign because we think you're great and everything but nobody knows who you are." Or, it could be a repositioning, a rebranding, or a whole number of things. So, you arrive, open to what the problem is going to be, and what the solution could look like, and that's what you're supposed to do.

Stef:
Absolutely. You know what? I think because this has created a lot of friction within myself as well, because I learned all this stuff about Marty's books, and I still love this whole idea. I think still if you read them, it's good as a designer to learn this stuff because actually you learn about this idea of what is the customer's gut feelings? I absolutely think that's crucial, but I think what happens is at a certain point, when you're consulted as a brand strategist, not to just, for example, let's do a workshop or get out some information, or facilitate, extract information, but you're also expected to, for example, give advice on the company's heading for the future.

Stef:
That oftentimes, just like basing it on, for example, the client's assumptions, or let's say, what we know from differentiation and branding, is also not enough. That's why I started digging into this behavioral science, economics, marketing science. I think that's the only thing. That's why, again, that's why I contacted you, is I think if we could all, especially when we're in brand strategy, if we could learn more from these different perspectives, we could see maybe a little bit more nuance.

Stef:
Maybe some other patterns that we didn't thought, think about before, just this one idea. Because I do see, it's a lot of the same message about zigging and zagging, and that's okay for me. But I think there's a lot of other things such as distinctiveness, which I've mentioned, and for example, salience, just being available mentally. Those are concept that are maybe as important if you are stirring a business, because you're not just stirring a brand.

Stef:
You're stirring a whole company into a direction. So, that's, I think, the most important thing I wanted to add to this conversation. This is Stef and you're listening to The Futur.

Greg:
Thanks so much for joining us in this episode. If you're new to The Futur and want to know more about our educational mission, visit thefutur.com to find more podcast episodes, hundreds of YouTube videos, and a growing collection of online courses and products covering design and business. Oh, and we spelled The Futur with no E. The Futur podcast is hosted by Chris Do and produced by me, Greg Gunn. This episode was mixed and edited by Anthony Barro, with intro music by Adam Sanborne. If you enjoy this episode, then do us a favor and rate and review us on iTunes.

Greg:
It's a tremendous help in getting our message out there and let's just know what you like. Thanks again for listening and we will see you next time.

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