Sunday, 18 March 2018

Why and How Challenger Brands Succeed For Brand Leaders

The challenger brand model is a strategic approach to a market that works for aspirational brand leaders to take ownership and consolidate a particular position for their unique offering within a market. The challenger brand model is business strategy that changes the landscape of a market, by shifting the entire premises of a market's assumptions about its underlying structure.  Changing the premises of the market's structure is how disruptive technologies are brought to market by challenger brands.

The fundamental premise of challenger brand model is that it is a whole business strategy for the business, not just the marketing and sales functions. The challenger brand model success relies upon it being a clear strategically focused in carrying the whole business into a new place within its market sector(s), not just routes to market into a true partnership throughout the entire value pipeline.

This shift is about partnership proactive participation in the challenger attitude within a market. The challenger model creates a new value stream ultimately to customers, but actually to all stakeholders involved in creating the challenger position within a market. Challenger brand models are actually not just about sales people selling in a different way, but far more; they are about businesses identifying that in maturing markets defining their premium and sustainable position within that market is more than just desirable but an essential suitable position to own.

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 Structures

For 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.

The debate is one of nature versus nurture. 

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 shift

The 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.   

For challenger brands to succeed they must challenge with a uniquely defined position within a market.  Belief and education are central to challenger brands success. Everyone must believe, not just the sale person, but the whole organisation must have a unified cultural belief in the challenger position.

Engagement and communication must be clear and demonstrate the innovation which the challenger brand operates.  Simon Sinek talks about the power of WHY, when describing Apple’s approach to the market. The brand’s ability to communicate at all levels creates interest and desire within target audiences. Target audiences, those who just get it, become converts to the way in which a challenge brand operates creates people with a passion, converts who believe and can communicate that belief clearly. 

Education is at the heart of successful challenger brands. While they create factual and emotional arguments which people buy into, they can sustain and develop their challenger position. Education is not just talking to passionate followers or clever innovations, it is far more. It is the continued striving to re-enforce that challenger position, what it is why it matters to all stakeholders and how it differentiates the brand from other and form other potential new entrants or alternative options. These are most effectively delivered through insights into customer behavior inextricably linked to core causes and themes, which that challenger brand espouses.  This continued consistent communication re-enforces the challenger brand’s position and moves the brand from innovator market positions into aspiring early majority markets of both intermediate channels to market and audiences.  

Successful challenger brands, defend their market position, not through hostile language, ‘we are better than you because….’ But through resonance with audience types personalities.  Each challenger brand’s communication sounds like ‘people who value XYZ value us because we resonate with their values’.

That resonance is not designed to appeal to everyone, in fact successful challenger brands focus on key target segment consumer motivations. They sacrifice the majority status quo and look to occupy premium places within markets which are defensible and sustainable. They look at tomorrow’s market needs and drive behavioural shifts in customers attitude to brand engagement. Apple’s drive into apps, live streaming, integrated products and services, all move audiences into engagement with the brand in a different way than any other ‘computer’ company.     

Control, and taking control is therefore at the heart of a challenger brand’s success. Communication is only relevant if it engages with those who can influence decision-making. Effective communication by challenger brands is about controlling the communication where and when it matters.  Challenger brands focus on communication only where they can successfully challenge, they converse on their ground and in their language. They create a new language of products and services not to differentiate but to identify the value they deliver in their unique language, so conversing inside the brand becomes an integral part of buying into the brand.

Challenger brands only talk about value, challenging the customer’s thinking and pre-conceived perceptions in their decision-making process.  It is never negative, always a positive solution being provided by challenger brands. The irony being that they most successfully challenge when they do it non-aggressively and non-directly. They don’t look to compete in the same way as the industry norms, but through looking at challenging the status quo in every way. That approach creates positive tension, the implied question is why would you not buy this brand, this way of life, rather than buy us over them.

Challenger Brands Offer Enhanced Value 

Third 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.

Challenger Brand Leadership Skills

Becoming a challenger brand within a market requires the right type of people, and this is the fourth principle behind a successful challenger brand. Traditional order takers and short-term management and leadership people will not ideally fit with a challenger sales brand. So moving a brand, or creating a challenger sales brand requires an organizational shift in behaviours, competencies and capabilities across the whole company.  Changing behaviours of all employees takes time and leadership, it does not happen over night and measuring the results is not easy.  Rather than just measuring the sales, the leadership need to measure the quality of the customers and the engagements that occur. 

At the heart of becoming a challenger brand is to understand the unique position which that position within the market it delivers.  Brands such as Apple, Patagonia and Tesla have all successfully taken clear positions within their respective markets’ by being challenger brands. By changing the established perception of a market, challenger brands succeed because they deliver more value at every point of the relationship. It takes a strategic long-term approach for a challenger brand to achieve that success, and that takes leadership with vision.

Learn more about how to develop successful business strategy click the link to buy the book:- Strategy: The Leader's Role by Richard Gourlay

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