Why and How Challenger Brands Succeed For Brand Leaders
The challenger brand model has four fundamental underlying principles for it to be successful. It is not just about selling, having challenger sales people, but about changing everything about the organisation.
Types of Sales StructuresFor a company to start its journey into the position of challenger brand the first principle is that whole organisation must make a step change in their attitude and approach to their customers. If the culture of a business is purely sales focused then moving it to a relationship one is a simple evolutionary step, but moving to a challenger one is not a simple next step, but a cultural shift, a huge leap of faith and complete organisational cultural shift. This step change is one reason why many companies aspire to being challengers within their market, but in reality they are still transactional relationship in nature.
Can a company move away from simply selling what they have, to identifying and developing long term customer values, what tomorrow’s customer is going to value within a brand. Can the organisation communicate its true values rather than selling what it has today. Putting it simply; can a company walk away from a short-term sales culture to challenge industry perceptions. In my background I have worked for brands that have achieved that, and seen brand’s such as Patagonia sustain the challenger market position successfully and change the market to their challenger position. Premium brands achieve the challenger positions through visionary leadership and sustain it by creating champions throughout the whole industry, not just through sales people selling differently to others.
Challenger selling: mindset shiftThe second principle of successful challenger brands is that everyone within the brand has engage in conversations with stakeholders to shift the mindset of an industry. Complete belief from within the whole team of the company culture is a must. That creates a sector tension within any market. Apple, that iconic challenger brand took on Microsoft and others, by challenging the status of computing as technical, Apple made them simple and beautiful. They work for us, not us for them. That tension with customers and the whole supply chain successfully challenged assumptions and took that challenger role from computers to phones, watches and even TV’s, redefining the markets within which it chooses to compete.
Challenger Brands Offer Enhanced ValueThird principle that makes challenger brands successful is that they are premium players within any market. That requires a complete integration of attitudes and approaches within the company and its complete supply chain. Challenger brands are always premium players, they invest in being in the space at the top of the market, and the price they charge is a result of their challenger success. It is investment into innovation in both product, service and value chain activities.
Being a challenger brand also relies on the brand investing in its customer targeting of key prospects, not just end customer segmentation but also in every step in the customer journey. That creates an targeted up-front prospecting and focused pipeline management Those investments result in higher closing ratios than industry averages.