The challenger brand model is a strategic approach to a market that
works for aspirational brands which wish 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.
What is a Challenger Brand?
A challenger brand is a business which identifies and develops a clear focus within a market. Typically challenger brands have grown into an area of specialisation within a market sector. Either by focusing on a specific subset of the market or a certain demographic requirement within a market. They by definition challenge the status quo of a market. They can be seen in virtually every market and therefore have no common identity due to very diverse nature of markets.
Challenger brands do demonstrate a clear identify within their market. That clarity of a challengers identity is a vital first step. Challengers want and must stand out from the mainstream. They must be distinctive within their market. Defining what they stand for must be clear and consistent over time. You cannot challenge if you do not stand out and stand for your identity.
Challenger Brands Challenge Perceptions
Challenger brands which are always consistent is that you are on a mission to change the industry. What you are changing and why is vital to communicate to your core target audience. That enables challenger brands to take premium positions within markets as they focus on their alternative value proposition within any market. Starling Bank and Apple for example despite being 40 years apart both successfully have created a successful premium challenger position within their markets.
Challenger brands are emotional brands. People buy the value proposition either from aspirational leaders and from bold statements about the real value they offer to people who value what they do. This emotional message is often linked to transformative message which the business will deliver to the market. Challengers focus on the future growth of the market and how the challenger today will be the dominant market player in the future. That constant message of a brighter future with the challenger is always about how the challenger brand will make change brand today will be the mainstream in tomorrow's world.
Challengers Brands Create New Value
This shift is about proactive participation in the
challenger attitude within a market by a series of partners. 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.
Its Never Just About Changing The Sales Strategy
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. Successful challenger brands do not just tell their sales people to become a challenger brand, for a successful brand to succeed as a challenger brand it must be a complete top down vision owned and delivered across the whole organisation.
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
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.
