One of the most rewarding experiences in the agency business is helping true challenger brands successfully punch above their weight to overcome the hurdles that make life as a challenger both daunting and exhilarating.
But before we dive into some of what it takes to succeed, let’s establish a few guidelines about what a challenger brand is and is not.
The commonly held belief is that a challenger brand starts at a disadvantage compared to larger brand rivals in its market. Typically, that disadvantage is a lack of resources enjoyed by the market leader — less finances, limited distribution, and less trade support. Sometimes the disadvantage is simply less recognition than the market leader (perhaps tied back to resource disadvantage). But it is important to understand that the disadvantage is not an Achilles heel. It can be overcome if the brand has legitimate challenger brand qualities.
In thinking about what a challenger brand is, there also are a few myths that need to be dispelled. For one, a challenger brand need not be the stereotypical edgy, disruptive, counter-culture brand that is so often put on a pedestal. Those challenger brands do exist, but they are just one type of challenger brand. A humble or understated challenger brand is not an oxymoron (consider Casper Mattress or Method Products — both have succeeded with a smart, human, and modest approach to category disruption).
Similarly, not all challenger brands are new, disadvantaged brands. In many categories, from automotive to beverages to technology, there are clear examples of older brands and category leaders that still operate as challenger brands — still underdogs in their market, challenging the status quo in their industry, tinkering with a different business model or an unconventional go-to-market strategy. It would be hard to argue that a few behemoth brands like Amazon and Apple don’t still think and behave as challenger brands.
For most challenger brands, the name of the game is to steal market share from the market leader. Some accomplish this via demonstrative changes to price and/or product — offering price discounts, introducing less expensive goods or premium goods, increasing product variety, or delivering a higher level of service. In many cases, gaining market share requires deploying several of these tactics in a well-orchestrated manner.
Looking at this situation through the lens of an agency, the truth is that most of us have limited influence on our clients’ business models, product development, pricing, or distribution strategies. However, we are well suited to deliver strategic value in several areas that have proven pivotal for helping challenger brands gain greater recognition and market share: creating distinctive branding, unearthing and conveying the brand’s “inherent drama,”* identifying or creating meaningful differentiation, and leveraging unexpected creative to bring the brand and its most meaningful points of difference to life.
But having the desire and expertise to do this work and actually delivering on it are two different things.
Building a believable and compelling challenger brand strategy starts with being honest about what makes the brand a true challenger and why. The pull to be viewed as a challenger brand can be very seductive, so much so that it blinds one (client and agency) to the reality of the brand. Who doesn’t want to help author the next Apple brand story or convey the mission of Patagonia or Casper’s reinvention of the mattress category?
But before you get too far down the path of building the strategic framework for the potential challenger brand’s story, be sure to ask: Is this challenger proposition real? Is it authentic? Is it meaningful to the end user? Or is it simply operating at a resource disadvantage which is not enough to build a challenger brand story? Many, many categories are populated with brands that are outspent and trail the market leader due to financial constraints, but few are challenger brands in the fullest sense of the phrase.
And be wary of the spurious notion in this business that clever marketing in and of itself can create (fabricate) competitive differentiation. Think disruption for disruption’s sake. Maybe this can work in the short-term, but the average consumer will see through that pretty quickly when the much-vaunted promise or claims of category disruptor status exceed the reality. This can be particularly devastating for the so-called challenger brand.
Getting to the heart of the challenger claim and testing its veracity requires open and honest collaboration between agency and client. It requires identifying and aligning on what, in fact, the brand is even challenging? Has the brand come up with a new way of thinking or operating in its industry? Has it zeroed in on a truly unmet consumer need that the market leader or the category as a whole has failed to address? Has the brand developed a product or service that changes the way consumers consider the category? Is the brand on a mission to deliver social or environmental benefits? And importantly, can the agency capture and convey this in a way that establishes meaningful competitive differentiation? If there are a few honest “yeses” along that line of questioning, then by all means, keep going.
None of this is intended to dissuade an agency from the difficult yet rewarding work of helping a brand discover and tap into what makes it a worthy challenger brand. To the contrary, the hope is that more clients and agencies are drawn to the art and science and enriching work of developing, bringing to market and celebrating true challenger brands.
In a world where attention spans are limited, we're glad you stuck with it and made it to the end of this article because we certainly think it was worth the read. If you like what you saw and want to know how you can partner with a team that's brimming with creative ideas, reach out to our CMO, Taylor Bryant (email@example.com), and get a conversation with Mythic started today.
For a deeper dive into challenger brand archetypes, Overthrow from phd and EatBigFish are wonderful and insightful reads.
*“Every brand/product has ‘inherent drama’ and we can build brand equity by unearthing it and bringing it to the fore.” ~ Leo Burnett