When you think of challenger brands, what comes to mind? Depending on how much you know about underdog brands, there are a number of ways you could answer that question. If you’re indeed new to the idea of challenger brands, here are seven important things you should know:
In every category…
- Challenger brands are the companies chasing the category leaders
- Challenger brands lack the distribution, ubiquity, and R&D of their competitors
- Challenger brands traditionally have far fewer resources including people
- Challenger brands are tough, scrappy, resourceful, and relentless
- Challenger brands employ strategies that challenge convention, they make distinct promises only they can keep, they understand both who they are for and just as importantly, who they are not for, and they go to market with a distinctive voice
- Challenger brands always seek to disrupt consumer complacency and the status quo
- Challenger brands are never the big category leaders, but often the category thought leaders
Now that you know some of that, when you think of challenger brands, which come to mind? Apple? Tesla? How about Yeti? Patagonia? Pepsi, Dove soap? Maybe Target came to mind. Or Southwest Airlines. Or Whole Foods. Depending on your age, you may even have thought of some of the original brands that leaned into the challenger brand mindset like Avis and Volkswagen. Look at any category you can think of, and it will be dominated by challenger brands. There can only be one category leader. Every other brand is fighting like Hell to take it down.
BECOMING THE AGENCY FOR CHALLENGER BRANDS
Twenty plus years ago, The LOOMIS Agency was a small, regional agency in Dallas working hard to determine what made us special. (We were a quintessential challenger brand. We just didn’t know it yet.) That’s when Mike Sullivan, then our President and now our CEO as well, attended a marketing conference in Silicon Valley that changed everything. At that conference at the headquarters of Yahoo!, Mike heard a presentation on a concept called challenging branding by a thought leader named Mark Barden, one of the principles at a London marketing firm called Eat Big Fish. Mark’s partner Adam Morgan had written a seminal marketing book called “Eating the Big Fish: How Challenger Brands Can Compete Against Brand Leaders” and Mark was in the U.S. to help spread the Gospel. Eighteen years later, we would write our own book about challenger brands and the role culture plays in their success, but more about that later.
By the time Mike got home from the challenger brands conference in San Francisco, our direction and purpose as an agency was clear. The LOOMIS Agency would forever more be a challenger brand agency with a single mantra – “we help challenger brands win!” Admittedly, it took us another 20 years to become the country’s leading advertising agency for challenger brands, but that’s where we are today. We think like challengers. We strategize like challengers. We create like challengers.
To the uninitiated, that may seem like splitting hairs and something any agency could say. And that’s true. Any agency can say those things. Delivering on them is a whole other endeavor. At LOOMIS, from strategy and account service to media and creative, everything we do is viewed through a focused challenger lens that gives our clients the best chance to compete and win. We help underdogs punch way above their weight and find a way where there is no way. Challenger brands never give up, and neither do we.
WHY WE LOVE CHALLENGER BRANDS
From the time The LOOMIS Agency adopted the challenger brands focus for the agency, it’s been a catalyst for both our growth and that of our clients. Time and time again, we’ve seen the power of thinking differently and the results that come from a challenger brand mindset. But even more, we’ve seen the transformational effect that comes from combining the challenger mindset with an acute focus on building and nurturing a great company culture.
In 2019, after a decade of discussion, Mike Sullivan and LOOMIS’s former Co-Executive Creative Director Michael Tuggle decided to document the agency’s experiences with challenger brands and culture and published a book called, “The Voice of the Underdog: How Challenger Brands Create Distinction By Thinking Culture First.” In it, Sullivan and Tuggle discuss why it is we love challengers so much and why we are so driven to help them succeed. From chapter three, “Why Challenger Brands Are Hard To Beat:”
“Old or new, large, or small, underdogs find a way to survive. It’s part of their nature. And in way more instances than you might think, challenger brands find a way to win. That’s not to say there aren’t numerous disadvantages to being the little guy. There are. But there are also a number of surprising advantages to being an underdog. A dozen to be exact. The key is understanding what they are and leveraging them for success.
- Everyone Pulls For the Challenger Brand
As human beings, something deep inside us is hard-wired to root for the underdog. And when the narrative includes a notion of redemption, or overcoming overwhelming odds, we cheer even harder. Smart challenger brands understand the masses are rooting for them to succeed, and they leverage that by giving consumers an emotional reason to connect. Nobody likes a bully and we all love seeing the little guy succeed. In them, we see a little piece of ourselves, and we know that if that was our idea on the line, we’d sure want people supporting us.
- Competitors Underestimate Challenger Brands
Call it overconfidence, misinformation, or hubris on the part of those at or toward the top of the food chain, but one of the great advantages to being an underdog is that competitors, and especially category leaders, almost always underestimate you. They can’t help it. When you’re on top, it feels like the world is yours and that you get to dictate the rules of play. There’s an ever present “We’re Number One” confidence that infuses everything. But what leaders forget is that while they’re catching their breath from reaching the summit, or resting on their laurels, their challengers are doubling their efforts to figure out how to bring them down. Brand leaders often fail to acknowledge the real threats posed by their smaller competitors until those threats are knocking on the door catching them completely by surprise. Historically, it’s in that moment when companies make really bad decisions in response. (Hello “New Coke.”)
- It’s Easier for Challenger Brands to Fly under the Radar
Corollary to big brands underestimating challenger brands is the ability of smaller companies to fly under the RADAR. How many times have you discovered a “new” company, either on your own, or on someone else’s recommendation, only to find it’s a huge deal? Today, the fastest growing “cab” company in the world (Uber) doesn’t own a cab. One of the fastest growing workout brands in the country (Camp Gladiator) doesn’t own a gym. The fastest growing hospitality company on the planet (Airbnb) doesn’t own a hotel. Challenger brands often fly under the radar when their competitors aren’t looking or even paying attention
- Challenger Brands Can Be More Nimble
According to Newton’s First Law of Motion, the bigger and heavier an object is, the harder it is to move. In other words, if the Titanic had been a bass boat, the iceberg wouldn’t have been a problem. The same goes for brands. Often, the bigger they are, the more difficult they are to maneuver. More offices, more people, and more management levels require more effort, more planning, and more time. By contrast, smaller brands have less of everything and should be able to move much faster. Being small can be a big disadvantage when it comes to things like manpower and cash flow. But it can also be a huge advantage when it comes to moving quickly.
- It’s Easier for Challenger Brands to Build, Adapt, and Maintain Their Cultures
Building and maintaining an authentic, inclusive, sustainable culture is crucial to the success of your company and your brand. More often than not, uber-successful brands have and maintain a distinctive culture. They know who they are, and they live into that identity on a daily basis. Think Apple. Pixar. Chick-fil-A. Whole Foods. Those companies are four of the biggest disruptors in history, and each one has a culture that’s envied by companies everywhere. And here’s the secret: They didn’t build the company and then create the culture. It was there from the beginning. Too often, culture is an afterthought. But for those with the vision and discipline to build their culture from the beginning side-by-side with their brand, there are advantages that simply cannot be manufactured on demand.
- Challenger Brands Remember How to Hustle
There’s an old English proverb that says, “necessity is the mother of invention.” It didn’t originate with challenger brands, but it could have. One of the core tenets of challenger branding is that they find a way where there is no way. Underdogs are fighters. They’re tenacious. They don’t give up. The Greatest Generation called that “hustle” and it’s a concept most challengers are intimately familiar with. Because challenger brands don’t have the budgets and resources that category leaders do, they are forced to achieve more with less. That starts with smarter strategies and better creative work, but it also means making the most of the resources at your disposal.
- Challenger Brands Often Have More Consolidated Leadership
While not an absolute, more often than not, challengers tend to have more consolidated leadership than category leaders. When that leadership is strong, it can be a huge advantage. With every layer of leadership comes a need for more time, more communication, and more coordination to get anything done. Not only that, every layer of leadership puts employees one step further away from the brand leaders at the top.
It’s not that smaller works and bigger fails. It’s simply a different dynamic requiring a different kind of leadership. Where the advantage lies for challenger brands is that smaller makes it easier to engage your people on a personal level. To help them see and understand the vision for your brand. To make them feel part of something special and bigger than themselves. The challengers who fly are the ones with smart, humble, passionate leaders who take advantage of their size by engaging their people as often as they can to inspire, motivate, and calibrate their cultural alignment.
- Challenger Brands Can Go Where Big Brands Can’t, or Won’t
One of the most fascinating aspects about challenger brands is that they often go where big brands either can’t or won’t. Part of that is due to the sheer size of category leaders. Some of it is due to their mindsets, a reduced appetite for risk, or the fear of what taking chances might do to the stock price on Wall Street. Truthfully, there are dozens of reasons why big companies tend to be safe, stodgy, and sedentary. And while you can justify all of them, those rationales also open the door for underdogs who are willing to take a chance. Anybody remember Blockbuster?
- Challenger Brands Attract Talent Who Want to Make a Difference
Challenger brands are all about questioning the status quo, thinking differently, and changing the world. Which do you think sounds more appealing to great thinkers, innovative leaders, and people with the kinds of mindsets you need to go after the category leaders? The disruptive upstart company looking for innovative thinking and new paths, or the established leader who’s just fine doing things the way they’ve always been done. Challenger brands attract people who want to make a difference, who want to make an impact, but only if that’s the kind of company you are authentically from your core through to your culture.
- Challenger Brands Have a “Change the Game” Mindset
One of the greatest commercials that has ever run (from one of the greatest campaigns) was a 1997 Apple commercial created by TBWA\Chiat\Day called “Think Different.” In it, over a montage of the world’s most innovative thinkers and artists from Einstein to Gandhi to MLK to Picasso to Jim Henson, a voiceover says:
Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules and have no respect for the status quo. You can quote them, disagree with them, glorify, or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
It’s no shock that this spot came from one of the great challenger brands of all time, or that it was Apple (and their agency’s brilliant creative team) who so beautifully articulated what it is that sets underdogs apart from the rest of the pack. Great challenger brands don’t sit around thinking of ways to win the game. They think about ways to change it. David didn’t look for a better way to grapple with Goliath or for a sneakier way to fight up close. He examined his opponent’s strengths and found a way to use his gifts that was so lethal and unexpected that the Philistine never saw it coming until it smacked him between the eyes.
- For Challenger Brands, Time Is of the Essence
When you lack unlimited resources, you can’t afford to sit around and take your time with things. Challengers have to lean into a mindset of commitment. A mindset to make a decision and see it through, whatever the result. They can’t afford not to. Andy Andrews, renowned speaker and best-selling author of The Seven Decisions and The Traveler’s Gift addresses this very thing. He says, “intention without action is an insult to those who expect the best from you.” For challenger brands, time is of the essence. Underdogs that really want to go after the leaders have to stop dreaming and start disrupting. And if they fail? They have to get back up and swing harder.
- No One Expects Challenger Brands to Win
Let’s be honest. Nobody expects the underdog to win. As spectators, we hope for it, we root for it, and we cheer for it. But in our hearts, we know it’s probably not going to happen. The same is true when our competitors look at us. They’ll pat us on the head. They’ll acknowledge we’re in the game. They might even pay attention to what we’re doing from time to time. But they’re not sweating a hostile takeover. And that’s right where we want them. As an underdog, one of your greatest advantages is being underestimated. Ask the 1980 U.S. Men’s Olympic Hockey Team. Ask Buster Douglas. Ask Rulon Gardner. In sports, we talk about teams “playing loose,” or “not playing tight.” In essence, playing like they cannot fail. When they so choose, challenger brands can take advantage of the same energy.
Work hard. Be smart. Leave it all on the court and be good with whatever happens. When we saddle up beside the challenger brands we’re proud to serve, that’s the mindset we take into battle. It’s served the agency and the multiple brands we’ve fought with for more than two decades well. We’re confident it will do the same for you.