This is a guest post by Dan Salkey, Co-Founder of °Small World and a Brand Strategist focused on challenger brand theory. He’s guided the brands of famous companies like adidas and Nissan but set up °Small World to help startups & scaleups challenge the big incumbents. Here’s his guide to becoming a Challenger Brand.
A challenger brand is defined, primarily, by a mindset – it has business ambitions bigger than its conventional resources, and is prepared to do something bold, usually against the existing conventions or codes of the category, to break through.
Here are the 8 steps you need to take in order to adopt and implement Challenger Brand theory.
Practice Intelligent Naivety
The best challenger thinkers today are those who came fresh to their category. Elon Musk had no experience in automotive before starting Tesla and Jeff Bezos came to the world of books, as well as marketplaces, from the world of finance.
This meant they practiced what we call ‘Intelligent Naivety’. That’s a willingness to ask questions of the category you’re in that would otherwise seem ridiculous or naive: ‘Why can’t you sell books online?’, ‘Why aren’t electric cars more exciting?’.
Practicing ‘Intelligent Naivety’ will get your head outside of the category you’re in and allow you to look outwardly for opportunities to innovate.
Build a Lighthouse Identity
All challengers have a crystal clear sense of who or what they are as a business. Most importantly they know why they exist and they project this identity intensely and consistently outward to consumers.
Much like a lighthouse they guide people what to think about their brand rather than following competitors or consumer trends.
Being a challenger often means taking an unpopular or less thought of stance on the world. You need to define yours before putting any communications out into the world.
Take Thought Leadership of the Category
Marketers often think there’s only one leader in their category; Coca-Cola in soft drinks, McDonalds in quick service restaurants. This isn’t the case however.
There’s the Market Leader, the business with the biggest share and distribution. But there’s also the Thought Leader, the brand that everyone is talking about with a sense of momentum with consumers.
Look at Thursday in dating apps at the moment, by far the smallest player next to Bumble, Tinder and Hinge but making massive waves due to their fresh perspective on the category.
To be a successful challenger you need to carve out your thoughts on the category and deliver them to consumers in fresh, consistent, inspiring ways.
Create Challenger Symbols
Challenger brands are often brands in a hurry. No wonder so many startups & scaleups naturally adopt challenger brand thinking.
They need to snap consumers out of autopilot and in doing so create big impactful marketing ideas that capture people’s imagination more so than a TV ad or poster campaign.
This can be anything from Swatch draping a skyscraper sized watch over the Commerzbank HQ to launch their watches in Germany to Brewdog parading a tank down Central London streets to raise awareness of their crowdfund while stamping their punk attitude on the city.
You need to create powerful symbols which cause consumers to rapidly re-evaluate your brand rather than fighting a war of attrition over decades like bigger incumbents with big media spends.
The next two steps are probably the most important when it comes to putting challenger thinking into action.
The first is sacrifice. As a challenger you’ll have fewer resources than the Market Leader in almost every category of business and marketing.
Therefore laying out your marketing tactics and brutally cutting anything that doesn’t communicate your Lighthouse Identity in the most impactful cost effective way is a core tenet of being a challenger.
A sacrifice could be made in anything from the number of social channels you commit too, the amount you invest in promoting within retailers or investing in traditional media channels like TV.
Once you’ve decided what you’re going to sacrifice, the next obvious step is choosing which two or three tactics you’re going to fiercely overcommit to doing.
Overcommitting could mean putting your whole media spend behind one channel to reach the maximum number of consumers, going big on the production for one particular marketing stunt or even just overcommitting manpower to customer success to increase word of mouth.
Enter Social Culture
Every brand dreams of being so culturally relevant they enter popular culture; brands like Nike, Apple and Netflix (all once challengers) have managed to succeed in doing so.
Challengers don’t dream about this happening; they actively try to manufacture it with punchy initiatives which the Market Leader isn’t quick or brave enough to emulate.
Constantly keep an eye on current events and news both within your category or adjacent to it to see if your unique point of view allows you to enter the debate or make a dull news story more exciting.
Oatly, Brewdog and Epic Games are recent masters at this. Oatly successfully lobbied the Swedish government in the so called ‘Milk Wars’ fuelled by a punchy PR campaign, Brewdog got people to vote by offering free pints during the UK elections and Epic Games mimicked a classic Apple ad from 1984 to raise awareness of the impending law case they’d filed against the tech giant.
All relatively mundane but newsworthy events that they spun into cultural moments.
Be Idea-Centered, Not Consumer-Centered
Lastly but certainly not least, challengers need to come full circle and remember how they achieved their initial success. By being idea centred, not consumer centred.
When challengers become successful they have a tendency to protect what they have and act like the Market Leader which in many cases they become.
The main way in which they do so is by turning their back on their clear Lighthouse Identity and instead becoming consumer and category dependent. This leads to inward thinking which we all know leads to copycat same brands which don’t progress the category or culture.
Ultimately the last step is just a continuous mindset to review your brand by. Are you maintaining a culture of Intelligent Naivety that leads to your business being ideas centred. This in turn will constantly refresh and renew your relationship with your customer.
These are the 8 thing you should take into consideration when looking to behave like a challenger brand. It’s by no means an exhaustive list or a checklist. Many of these things will be attitudes you need to instill in your business; intensely at the beginning and then consistently as time goes on. The process requires strong leadership and dedication but is undoubtedly the most exciting, and I would argue most fruitful, strategy for any ambitious brand to follow. We’re of course passionate about helping the next wave of challenger brands find their way in the world so we’re always happy to give advice if you need it outside of this article.