Whenever anyone starts a business or is trying to grow a business, it’s always the same dream – visions of your logo and company name everywhere, not being able to keep your shelves stocked, not having enough manpower to keep up with demand, phones ringing off the hook, social feeds full of conversations between engaged consumers, and too many media requests and mentions to count. However, rarely does this happen. Why? Because most times, business owners do not stop to give their company’s brand serious thought. You might have a great product or service to offer, but if you don’t position your brand correctly, your business won’t achieve true success.
Think about those brands you see, hear, and read about all the time, such as Uber, Dyson, Dollar Shave Club and Airbnb. Why do you think these brands are plastered all over the place? Yes, their success has placed them in the forefront, but it’s how they achieved that great success that’s the real story. The reason these brands are booming is because each one has challenged their respective market leaders, resulting in a revolution in that market. As such, each one of these brands can be referred to as a “challenger brand.” More specifically, a challenger brand is a company or product brand that is not the category leader in a particular industry. Challenger brands play from a position behind the dominant player or leader in an industry. The process of achieving challenger brand status does not happen overnight. The aforementioned brands were and continue to be committed to their marketing strategies and did not shy away from putting a lot of time and effort into devising their marketing plans, brand identity and positioning. They carefully researched their respective industries and the key players. As a result, they didn’t jump in blindly; they knew their competition and how vital it was to have a solid marketing execution to attract customers.
Take look at Airbnb for example. For those who aren’t familiar, Airbnb is an online rental service that enables people to list, find and rent vacation homes. It is a marketplace for vacation rentals that charges a fee for connecting users with people who have property to rent. Founded just eight years ago, Airbnb already has over 1,500,000 listings in 34,000 cities and 191 countries. How does this great success happen when there are thousands of hotels and motels? It happened because Airbnb differentiated its service from the leading brand or in this instance, a category of brands in its industry, which are hotels. Instead of always needing to stay in a hotel with people all around or having to reserve several rooms next to each other if traveling with friends or family, Airbnb provides accommodations that are much more private than the typical hotel and allows groups of travelers to stay together instead of being sectioned off in separate rooms. Additionally, travelers can actually get an idea of what it’s like to live in the town or city being visited. Thus, Airbnb provides a greater cultural experience than staying in a hotel.
Differentiation is just one key characteristic of challenger brands. In sticking with the Airbnb example, not only does Airbnb differentiate itself from the average hotel, it also creates market segmentation. Early on, Airbnb identified those consumers who are under-valued or under-served by leading hotels, such as individuals who cannot afford grand hotels and/or hotels in close proximity to areas of interest for the duration of a vacation, along who those traveling in groups. With Airbnb, not only are there more desirable budget-friendly options, but groups have the option of renting a house verse being divided in a hotel.
Along with differentiation and segmentation, challenger brands also possess the following qualities:
- Out-think, rather than outspend, the competition
- Committed to being the best at what they do
- Embrace productive disruption and unconventional approaches
- Use the competition’s size against themselves
- Provoke new conversation
When you think about Airbnb, isn’t it easy to see how each of these qualities is representative of the company?
Now that we’ve established what a challenger brand needs to do, let’s break it down even further and look at the five distinct types of challenger brands. Looking at each of these will help you determine if your business or organization is or has the potential to become a challenger brand. The five distinct types of challenger brands are:
- Lightening rod: Creates attraction, does the unexpected, adds shock value. Examples: Dollar Shave Club and Lady Gaga
- Heretical: Game changer, takes ideas from other industries and improves upon them. Examples: IKEA and Silvercar
- Foster rejection: Creates a “cult-like” following, focuses only on a very specific niche audience, hyper focuses on their target. Examples: Mini-Cooper and United Colors of Benetton
- Compulsive servitude: Over delivers, superior promises and services. Examples: The Ritz-Carlton and FedEx
- Constant Evolution: Technological advancements, the product or service is always evolving and does not stay the same for an extended period of time. Examples: Google Fiber and Shinola
Going back to our Airbnb example, which type of challenger brand would you say it is? If you guessed heretical, good job. This type of challenger brand best describes Airbnb because it is a total game changer in the travel/hospitality industry. Airbnb took ideas from this industry and improved them in order to create a much better consumer experience in many different ways. Which category do you think your brand falls into? Is it the same category you would like your brand to be in? If you think your brand can fit into more than one category, be careful. Think about the granular, fundamental purpose of your company or service. To be a challenger brand, you must have a clear vision and focus of what it is you want to do or provide.
The concept of challenger brands can get you thinking differently about your company. Every business owner wants the same kind of success Airbnb has seen in just eight years, but to do so, it’s imperative to take a step back and invest in your marketing and branding efforts. It might take a lot of time and energy, but the investment will be worthwhile when the dreams you had back when starting your business become reality. Click here to take our quiz to find out if your brand is a challenger brand, and if so, which type!
Does your brand fall into one of these five categories or do you think your brand has the potential to become one of these challenger brands? Connect with us. At Ideaworks, it’s our passion to think of ideas that will make your brand, product, or service stand out and resonate with your target market regardless if it’s challenger brand material or not. Who knows, after a conversation with us, you might start to see your brand in a new light.