4 Essentials Every Challenger Brand Must Cultivate

Successful challenger brands know where they stand, who they are, and how prepared they are to go to battle. They identify disruptive strategies, make distinctive promises and statements, and create and use a voice that’s unique to them.

Today’s post is by Mike Sullivan and Michael Tuggle, authors of The Voice of the Underdog: How Challenger Brands Create Distinction by Thinking Culture First (CLICK HERE to get your copy).

For those unfamiliar, challenger brands are those brands in second place, third place, seventh place, all chasing the category leader. Challengers are smaller, scrappier, and most often are brands where ambitions run high, but resources run low. Challengers cannot outspend their competition, so they outthink them instead. They start with a focused business strategy and look for opportunities to disrupt. Challenger brands don’t win by finding ways to play the game better. They win by changing it.

For every successful challenger brand, there are great examples of how they disrupted the status quo. When airlines started charging $25 a bag, Southwest Airlines said bags fly free. When fast food restaurants struggled to get orders right in the drive-thru, Chick-Fil-A built double drive-thrus and staffed them with smiling, helpful, appreciate people who took, checked, and double checked the accuracy of your order with a “my pleasure” at the end. When Blockbuster insisted people loved their neighborhood video rental store and would never go anywhere else, Netflix said we’ll see about that.

Disruption is the calling card for successful challenger brands. Take for example Franzia wines, and their beloved Charles Shaw Chardonnay affectionately known at Trader Joe’s and beyond as “Two Buck Chuck.” At the 2007 California Fair Wine Competition, Charles Shaw’s $2 Chardonnay beat out 350 other chardonnays in a blind taste test — some priced as high as $55 a bottle. So what did Franzia do to the price after winning the most prestigious wine competition in North America? Nothing. Two Buck Chuck stayed at $2 a bottle. When asked why, Charles Shaw winemaker Fred Franzia replied, “We choose to sell good quality wine for $2 a bottle because we think it’s a fair price. We think the other people are charging too much.” Disruption epitomized.

What every challenger brand needs

For challenger brands to lean into disruption and take on their stronger competitors, here are four essentials:

1. A challenger strategy– To win, challenger brands have to devise a marketing strategy that challenges category conventions and doesn’t simply imitate the moves of the leader or other successful category competitors. Apple didn’t try to out-IBM IBM. Burger King can’t out-McDonald’s McDonald’s. Challenger brands never win by mimicking the category leaders. They win by challenging category convention and attracting the consumers drawn to that disruption.

Leadership teams for authentic challenger brands evaluate the competitive landscape with an eye toward changing something fundamental about the way they approach the business. In doing so, they create a new and distinctive competitive advantage. When this is accomplished successfully, it creates a new and clear path for a unique marketing strategy. Franzia could have marketed his Charles Shaw Chardonnay the way the category competitors did, but he would have missed a significant opportunity for category distinction.

2. Challenger promises– Challenger brands must also make brand promises that aren’t easily duplicated by competitors. The promise must be solidly grounded in realdifferences created by the company’s state of mind — something it does best or is striving earnestly to do best. The key for success is that the promise must be authentic. It can’t simply be manufactured through advertising.

The authentic difference for the Charles Shaw brand isn’t that it’s an award-winning Chardonnay. The distinction is the company’s ability to sell it profitably for $2 a bottle, and its willingness — even desire — to do so. In a category driven by price breaks and promotions, Chick-Fil-A embraces neither. It promises and delivers exceptional products and service, and believes it’s worth the cost. Its customers agree and, as a result, in 2021 its stores averaged $5.9 million in sales doing business six days a week.

3. Challenger statements– Challenger brands must be willing to make clear and compelling statements about what they are and what they’re not, who they’re for and who they’re not for. Famous challenger brands such as Red Bull, Southwest Airlines, and Motel 6 are very specific about what they have to offer and who they’re for. They’re also not afraid to position themselves clearly away from customer groups that aren’t in their crosshairs. Red Bull isn’t for ladies having a soda over lunch. Southwest Airlines isn’t for people who like to fly first class. Motel 6 most assuredly isn’t for the traveler who wants something more than a clean room at a great price.

Challenger brands aren’t afraid to limit their appeal at the expense of alienating those who will merely tolerate them. They’re laser focused on those who will love them. The benefit for the challenger brand is a fervently loyal core customer base.

4. A challenger voice– Challenger brands are willing 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 say different things, make different promises, and command a different kind of attention in the marketplace. The state of readiness present in challenger brand leadership not only paves the way for unique and unconventional marketing and advertising, it compels them to seek it out.

Successful challenger brands know where they stand, who they are, and how prepared they are to go to battle. They identify disruptive strategies, make distinctive promises and statements, and create and use a voice that’s unique to them. Just as crucially, they embrace their company culture as a distinct advantage. Changing the game isn’t an easy proposition, but when you build a team that feels empowered, supported, inspired, and even loved, there’s no limit to the havoc you can create for your competitors and the success you can achieve as a challenger hungry to change the world.

Mike Sullivan is president and CEO of LOOMIS, the country’s leading challenger brand advertising agency. For more than 30 years, he’s helped some of the country’s most successful companies build their brands. Michael Tuggle is an award-winning creative director and writer with more than 25 years in the ad world building brands and growing companies. Their new book is The Voice of the Underdog: How Challenger Brands Create Distinction by Thinking Culture First (BizComPress, Aug. 10, 2020). Learn more at theloomisagency.com.  

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