Interview with Avantgarte CEO Schnaack: Agency CEO: “The German car industry has mercilessly underestimated Tesla”
Brands need to offer experiences in order to be successful – Martin Schnaack, founder and CEO of the communication agency Avantgarde, is convinced of this. For about 35 years, Avantgarde has been working on the emotional connection between brand and consumer in order to win fans. In summer also for VW. At the European Championships there will be a shirt that serves as a ticket. FOCUS Online met Martin Schnaack for an interview.
FOCUS Online: Mr. Schnaack, is it becoming increasingly important for a company not only to sell a product, but also to convey a sense of life?
Martin Schnaack: I am convinced of that. For brands, it’s more and more about building a relationship with the product through positive experiences. This will increase the value of this brand, be it Coca-Cola Apple or McDonald’s .
Starbucks is a prime example of experience purchases
FOCUS Online: Do you have an example of experience purchases?
Schnaack: Look at how coffee is sold today. In the retail business, the price no longer plays the decisive role at Nespresso, because the lifestyle is so special. And if you’re visiting a café, it’s Starbucks managed to charge completely different prices for coffee.
FOCUS Online: Isn’t the concept exhausted at Starbucks?
Schnaack: No. Starbucks is now even bringing the roastery into the cafés: there are huge shops in New York or Shanghai, around 10,000 square meters on two floors. In the middle of it is the roastery, there is an incredible variety of how the coffee is prepared and in the whole shop in Shanghai you will not find any plastic. All sustainable. You see, the world keeps spinning.
FOCUS Online: As a result, the price fades into the background if the product experience is right. So I feel better or superior when I own the product – this often works for Apple Sun.
Schnaack: Apple realized very early on that it was putting the experience first. No matter how they come into contact with an Apple product, the principle applies: simple, reduced, clean. Customers in this ecosystem know what to expect.
Strong potential for improvement in the automotive industry
FOCUS Online: Not all companies succeed in this. In which industry do you see strong potential for improvement?
Schnaack: In the automotive industry.
FOCUS Online: Why?
Schnaack: What happens if you need to change winter tyres? They are lucky to get an appointment in four weeks, in the morning at 07:30 and can be grateful if they are allowed to pick up the car again in the evening. This is a poor customer experience and provides points of attack for new vendors.
FOCUS Online: Your proposal?
Schnaack: Any car manufacturer can unlock their car. When I drive to work and park my car in the underground car park, a service representative comes, takes care of everything and when I come back to my vehicle in the evening, the tyres are changed, the car may still be cleaned and I have a nice note on the Dashboard : “Have fun in winter, drive carefully.”
FOCUS Online: The customer is therefore looked after holistically.
Schnaack: This is what we are dealing with as a brand experience agency. We see ourselves as consultants, but we are also involved in the execution. This can be the point-of-sale, events, test drive, promotions or theoretically even the hotline. The product experience is the key. Our goal is to create a consistent customer experience across all points of contact with the brand.
FOCUS Online: At the European Football Championship in the summer, you will work for Volkswagen . What are you up to?
Schnaack: We want to do more than traditional transgaming.orgs sponsorship. Our goal is to offer the fans real added value. When football fans think about mobility, they should think of Volkswagen. We have developed a EURO Fan shirt that provides access to mobility services from Volkswagen and partners in all host cities.
FOCUS Online: A shirt as a ticket.
Schnaack: Exactly. With the Volkswagen Fan-Shirt, football fans can take advantage of mobility offers at a discount in many venues of the European Championship. We also want to trantransgaming.org the emotionality of football and transfer it to the fan culture.
FOCUS Online: But there are also products in the foreground, right? The ID.3 electric car will be introduced in the summer if there are no further delays.
Schnaack: Products always play an essential role. But Volkswagen is already very far away with the e-mobility platform, so I am confident.
German car industry has “mercilessly underestimated” Tesla
FOCUS Online: Tesla is even further.
Schnaack: The German car industry made a mistake – Tesla was mercilessly underestimated. I know industry leaders who, six or seven years ago, predicted Tesla would end within two years. The automotive sector is in a bubble, even reasonable people do not see the reality. And this at a time when Tesla has already sold more cars in the US with the Model S than Mercedes or BMW . It will be exciting how the German flagship industry masters this challenge.
FOCUS Online: Let us come to avant-garde as a company. You have a financial investor on board who has taken over the majority. Why did you do that?
Schnaack: We also had an investor who held 42 percent of the shares before. EMH Partners has a financial focus and of course wants to make money. But they invest at the same time and give us the opportunity to grow faster. This can also be through acquisitions, because the experience market looks just as if valves have been released.
IPO planned for 2025
FOCUS Online: What does strong growth mean?
Schnaack: We’ve doubled sales every five years over a 35-year period. We have achieved 250 million sales in 2019 and want to be ready for the stock exchange in the next five years. That is the rough road map.
FOCUS Online: With a focus on Brand Experience?
Schnaack: Yes. We see that companies in the service sector are also moving towards experience and not just shifting marketing funds. That is the past. The companies are wondering what experience their products trigger for customers. And look for new sources of revenue.
FOCUS Online: But from your point of view, this development is only just beginning?
Schnaack: Yes. Take the magazine Auto-Motor-Sport, which currently still live on advertisements in the car industry and continue to fill the classic bubble. What happens when they start buying racetracks?
FOCUS Online: What are they supposed to do with it?
Schnaack: In ten years’ time, all or very many will probably drive autonomously. At the weekend, the car-engine transgaming.org could offer driving fun on closed tracks for those who want to take the wheel again.
“Whether It’s N26 or an established German bank, young people don’t care”
FOCUS Online: Where we are on advice for the car industry and media: What advice do you give banks?
Schnaack: At the banks, the branch network has been and is being thinned out in order to save costs. The problem is that these institutions are no longer relevant to younger people. Whether It’s N26 or an established German bank, young people don’t care. The service is identical, they are online-savvy. In addition, there are problems such as negative interest rates, which complicate the business model. The decline of the banks is unstoppable.
FOCUS Online: You see black.
Schnaack: It may be. But there are also opportunities: customer loyalty is crucial. The easiest way to achieve this is through a regional reference. As a bank, I have to finance projects, deal with cultural and leisure issues and generate added value.
FOCUS Online: The savings banks are probably still doing this best.
Schnaack: I think so too. If I finance today, then I as a bank must act socially and sustainably. The sustainability rating in particular will soon be more important than the classification of a rating agency such as Moody’s. If the bank helps the community to maintain the theatre operation or the swimming pool, this will create a reputation. The credit institution can finance and ensure that it becomes commercially successful. Then, when customers get cheaper or free access, I get into a cycle that makes sense. And with this added value, I’m pulling away from an online institute like N26.
FOCUS Online: They have many ideas. But what happens when a recession comes? Then marketing money is deleted first.
Schnaack: I see that as quite relaxed. The experience economy is a sustainable trend, not a cherry on the cake. There is a growing understanding that this is a value driver. And we are also broad-based.
FOCUS Online: How?
Schnaack: Avantgarde founded an AR and a VR company three years ago. This technology for augmented and virtual reality is coming. And we are also active in bot technology. To this end, we are growing very strongly abroad – through the World Exhibition in Dubai alone. I have been hearing the talk that the economy is collapsing for years. The car industry certainly has problems, but the labour market is close to full employment, there is a shortage of skilled workers. Our goal is to double sales again within five years. It will not be easy, but I am optimistic.
Also interesting: Fifth year in a row with red numbers – Deutsche Bank makes loss of 5.3 billion euros in 2019