Key Characteristics of Challenger Brands That Allow Them to Punch Above Their Weight
cHALLENGER BRANDS know what it means to fight their way to success. As true underdogs, this is their only option. Challenger brands can’t spend their way to success with big ad campaigns like category leaders. Instead, they start with a strong business strategy and a keen understanding of who they are as a brand. Then, they identify opportunities to use that identity for disruption.
When challenger brands surprise consumers and competitors, that collision has a double effect because it is unexpected. That punch is what gives brands what they want from their branding, marketing, and advertising – an answer. That alchemy starts with anchoring the brand to a real consumer insight that differentiates the brand from everyone else.
An Underdog Nightmare for Category Leaders
Real challengers don’t follow convention. Underdogs don’t succeed by trying to do what the category leaders do, but better. Instead, they found and exposed the weakness of the category criteria and filled the gaps with a unique solution.
Years ago, we sat down with a CEO in the mattress industry who wanted to know how he could create real brand differentiation and drive more retail traffic in such a high-selling category. His mattress chain was struggling with traffic, and with the Great Recession around the corner, sales were going from slow to slow. He needed an idea to turn up the volume, and he needed it fast.
In an industry where mattresses are always sold, we knew the brand needed to do something to disrupt the market. It must be rooted in a point of difference that customers find relevant and compelling, especially given the context of a sluggish economy and frugal spending on discretionary products like mattresses. The answer to our new client’s problem is hidden in his company’s extraordinary commitment to the sales process and training.
The mattress CEO is relentless in doing right by customers, and this makes him very particular about who he hires and how they are trained. The company’s extensive sales training exceeds that of competitors. As a result, he provides an excellent customer experience as evidenced by the insignificant number of returns – especially compared to the category leader, who is known for his tough ending coverage marketing method. That makes us beautiful to offer the mattress industry’s first (and so far, only) One Year Love Your Mattress Guarantee. While the rest of the industry offers 30-day return policies, our client gives customers a full year to love their mattress, and if not, they can return it.
It was a revolutionary challenge that turned category convention on its ear. In the first month, sales rose 30 percent, followed by year-over-year double-digit increases that topped 50 percent. Our favorite part of this challenger success story is when category killer Mattress Firm tried to match our client’s one-year offer only to quickly retract it after being swamped with returns.
4 Key Traits of Every Underdog
As nice as it is, the success of the challenger brand doesn’t come with the flip of a switch. This requires a solid foundation based on the four core characteristics that every challenger brand needs. If you are a challenger brand that is ready to fight and compete, here are four important characteristics that you need to address first:
1. A challenge strategy. Challenger brands require a marketing strategy that challenges category convention and does not simply copy the actions of the leader or other successful competitors in the category. Leadership teams for true challenger brands assess the competitive landscape with an eye toward changing something fundamental about the way they approach business. In doing so, they create a new and distinct competitive advantage – a clear path for a unique marketing strategy that only their brand can use.
2. Challenger promises. Challenger brands must also create brand promises that cannot be easily duplicated by competitors. The promise must be firmly based on real differences created by the state of mind of the company – something that is done best or is earnestly trying to do best. Critically, this promise must be true. It can’t just be done through advertising.
3. Challenger statements. Challenger brands must be prepared to make clear and compelling statements about what they are and what they are not; who they are for and who they are not for. Popular challenger brands like Red Bull, Southwest Airlines, and Motel 6 are very specific about what they have to offer and who their products or services are for. They also aren’t afraid to distance themselves from customer groups that aren’t in their crosshairs. Challenger brands aren’t afraid to limit their appeal at the expense of alienating those who simply allow them. They are laser-focused on those who love them – their passionately loyal customer base.
4. A challenging voice. Challenger brands are ready to amplify their strategies, brand promises, and statements through a unique voice. Their advertising and marketing communications look and sound different from their competitors. They talk differently, they promise differently, and they treat the market differently. The state of readiness that exists in the leadership of the challenging brand not only paves the way for unique and unconventional marketing and advertising, it forces customers to seek them out.
Challenger brands can’t cheat on the basics. But if they build a solid foundation of the challenger’s strategy, promises, statements, and voice, they will discover insights and be able to apply the truth. Then they have to fight like Hell without stopping. That’s how underdogs win.
Mike Sullivan is the president and CEO of LOOMIS, the leading challenger brand advertising agency in the country. For over 30 years, he has helped some of the country’s most successful companies build their brands. Michael Tuggle is an award-winning creative director and writer with over 25 years in the ad world building brands and growing companies. Their book is The Voice of the Underdog: How Challenger Brands Are Making a Difference by Thinking Culture First (BizComPress, Aug. 10, 2020). Learn more at theloomisagency.com.
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