02/03/2015

By Sarah Jane Stratford, Executive Strategy Director, ais London


Who are you calling ‘Challenger Brand’?

The concept of the Challenger Brand was born at a time when market leadership, in terms of sales volumes and market share were the metrics that really mattered. Those that led were able to command better distribution, better commercial conditions and generally muscle their way in front of more consumers on their own terms, through advertising and other brand activity.

Businesses worried more about their competitors and their position relative to them, than they did about their customers. And so the role of the Challenger Brand was established in opposition of the market leader, overturning and undermining the status quo to stand out. In many cases this resulted in brands that acted as the consumer champion. They were nimble and energetic, righting category wrongs perpetuated by the market leader and creating an alternative, more customer-friendly option. No bad thing, particularly for consumers.

But, the world has changed, whilst the way most businesses operate has not.

People are inherently lazy

Getting people to do something different is hard. We are creatures of habit, we love a path of least resistance and we stick to what we know. So, if you’re a new ‘Challenger’ to a market and you want to grow quickly, you need to offer people something that’s not just good, but better. And unlike the days when the concept of a Challenger Brand was born, that’s not simply about being better than your competition.

People’s expectations aren’t set by category or market, but by the best brand experiences they have. So, fixating on what’s going on within your own market and limiting yourself to being better than your competition is short-sighted, distracting and largely pointless. It will actively curtail your thinking and hold you back.

The truth is, bigger is not always better. Better is better. Brands that want to succeed long-term need to be challenging themselves and the very core of their market to constantly improve the customer experience. Tweaking mediocrity is not a long-term plan.

The rise of the new Challenger Brand

There’s a tendency for businesses that are making money to assume they’ve got everything right, or to at least think that tweaking what they have already will be enough to keep them ahead. Brands simply can’t rest on their laurels. They should, of course, be aiming higher.

We’ve seen the rise of a new style of ‘Challenger Brand’, predominantly digitally-led businesses that have used their digital expertise to challenge accepted norms and in many cases gone on to dominate markets through unprecedented levels of growth.

It has taught us there is always a better way of doing business.

From Netflix to Amazon, Facebook to Ocado this new wave of Challenger Brands hasn’t developed to simply right the wrongs of a category. They’re totally reinventing categories all the time. Whilst also changing the way all brands need to behave to keep their customers satisfied.

Crucially what these businesses tend to have in common is that they are designed to use data and technology to create an experience that constantly evolves in their customers’ interests. These brands understand that being a leader isn’t an end destination but an opportunity to keep evolving.

All brands need to act like a ‘Challenger’

It’s not as simple as employing a Head of Innovation and hoping for the best. The new breed of Challenger Brands has innovation in their DNA and behaves in a way that ensures the experience they offer is always in line with customers’ expectations.

If you want to keep up you need to behave like they do:

1. Make understanding your customers a priority

Businesses are often a wash with data, but have very little insight. Getting to grips with what really makes your customers tick is how you’ll build an experience that keeps people actively choosing you.

2. Make technology work for you

Making it easy for people is the answer to getting them to do almost anything. And technology is a business’s biggest asset when it comes to doing it. It’s also the biggest excuse businesses use for doing nothing. Find a way around your technical restraints and make your customer experience friction-free.

3. Never stop striving for better

Better is not a destination, it’s an ongoing journey. The last few years have given us plenty of examples of what happens when businesses think they’re as good as they can be. So, make sure you don’t follow them, constantly challenge yourselves to be better.

The competition isn’t the enemy, you are.

For any business to succeed in the long-term, it needs to think like a Challenger, regardless of size, tenure or market position. And the enemy they need to oppose is themselves.