Successful Challenger Brands Embrace Discrimination

Here’s a news flash: We like people who are like us. More to the point, we favor people who look like we do, act like we do, and think like we do. This innate bias has been slow-baked into our genetic code down through the ages. Hanging with one’s own crew increased the odds of survival considerably for our ancient ancestors. It’s a notion that befuddles the best intentions of today’s enlightened urban planners who aspire to create socially cohesive communities populated by diverse groups of people. Unfortunately, social cohesion and diversity just don’t get along very well.

The noble goal of diversity notwithstanding, marketers can’t afford to ignore our tribal behavior. People look to others who are like themselves for behavioral cues about what’s acceptable and what’s not. Social psychologists call this tendency homophily, and it has been observed in more than 100 studies, including a shocker conducted by the University of Washington. The results of that research are summed up in the provocatively titled Time magazine article, “Your Baby Is a Racist—and Why You Can Live With That.”

Homophily is the reason no single brand will ever appeal to everyone, although plenty of marketing money is wasted every day in the hapless pursuit of broad brand appeal. Of course, challenger brands can’t afford to throw away money chasing phantoms like broad brand appeal. Instead, successful marketers discriminate. They find their tribe and stick with it, because they know, just as our ancestors did, that this strategy offers the best chance for survival. The more precisely a brand can define its people, the better its chances for success.

Red Bull, Virgin America, Whole Foods, and Audi are just a handful of my favorite challenger brands. Each has a clear understanding of its customer base and is precisely and exclusively focused on just those people.

If you don’t like Red Bull, for example, there’s a very good chance you’ll never encounter any marketing for the brand even though they spend roughly $70 million a year on it. Red Bull’s youthful following is into adventurous living with a special affinity for expressing themselves through extreme sports. I’m no longer a young adventurer, but the residue of my youth has left me with a lingering affinity for watching the original extreme sport of motocross. At 50-years-old, I’m an outlier in the audience, but my interest in the sport has afforded me the opportunity to observe Red Bull’s truly brilliant marketing evolution over the years. Red Bull dominates in all the right places and in all the right ways for its tribe.

Audi is another of my favorite challenger brands—or at least it was until they began positioning themselves more directly alongside BMW and Mercedes. Audi appealed to me precisely because it wasn’t one of the German highbrow brands. I liked the fact that the luxury sport line was every bit the engineering marvel of its peers, but was understated in a way that suited my personal tastes. The 2008 commercial for the Audi A5 summed up the appeal perfectly. In fact, the brand hit its mark so precisely that in recent years, it’s begun to capture a great deal more market share.

It’s a bit of a paradox that the process of discriminating among customer groups and focusing on just one actually enhances a brand’s appeal and builds its following. For discriminating marketers, there’s simply no better strategy.