How Challenger Brands Disrupt Convention to Win Customer Loyalty

Competition in the customer engagement arenaFierce competition is a natural part of life within the customer engagement arena. But these competitors do not always meet on a level playing field. Now that most brands find themselves in the middle of massive change and disruption, many “David” versus “Goliath” matchups are occurring in the fight for customer loyalty. 

These opponents are also often called “underdogs.” They find themselves outmatched, adeptly managing limited resources, but still somehow successfully turning passive customers into loyal brand advocates. And these “underdogs” are not always spirited startups. Sometimes a major player challenges established cultural norms and shakes up status quos.

Mark Barden, Partner of eatbigfish, believes these brands should be championed. These mavericks, according to Barden, are known as “challenger brands.” And their stories were at the heart of his talk in San Francisco during the recent Ad Tech Conference. The presentation titled, “Challenger Brands: Embracing Your Inner-Underdog,” offered numerous examples from upstarts to major corporations, of brands that formed bold plans to take down dominate industry standards and succeed by doing more with less.

“A challenger brand is defined by a simple equation,” said Barden. “It is when A, ambition, is significantly higher than R, which are the resources a brand has available, and you are prepared to accept the difficult implications of closing the gap between the two. Simply being the number three or four player in a category does not make you a challenger. You need to have ambition and the willingness to do much more.”

Usually this scenario conjures images of the small idealistic startup slaying a mega corporation with innovative products and new ideas on how to drive modern customer engagement. With the tremendous rise of Silicon Valley, those examples are certainly present. But Barden wants to expand this idea even further. Brands must not only consider “who” they are challenging, but “what” as well. What cultural “monster” can a brand slay to improve the lives of its customers?

Barden offers Dove as a classic example of a challenger brand who saw the beauty myth as the monster.

“Dove challenged an entire industry that hoisted unrealistic expectations of beauty onto the consumer by rejecting them,” Barden said. “It stood up for consumers by having an honest conversation about real beauty that generated over 20 million friends on Facebook. Dove is not a small brand. It is a big brand with the mindset of a challenger, because its ambition was to challenge the way the world thinks about beauty.”

The key is to avoid competing with, as Barden puts it, the “big fish” by outdoing them on their terms. Challenger brands need to introduce something new. They need to think about what they can bring to or change about each particular situation.

“It is not just about fighting Goliath head on,” Barden said. “Sometimes it is about changing the rules to challenge Goliath in a foot race or in chess. The important thing is to imagine what that ‘big guy’ cannot do.”Airbnb changing hospitality industry

Airbnb is another example of a brand that is fundamentally challenging how the hospitality industry works by engaging customers in a very different way. This also extends to other players in the airline, auto, and cleaning industries just to name a few.

So how do brands become challengers? What does it take? Barden left the audience with some key considerations.

It requires an ambition that exceeds resources because it will force brands to think uniquely and do things differently.

It requires a challenge. This challenge has, at its heart, a story that will demonstrate how it can change the way something in the world works. Introducing an entirely new category of choice will get people’s attention.  

It also requires a strong sense of belief in what is to be done.

Perhaps, when considering all the requirements needed, this last might be the most crucial of all, because it is hard to challenge the entire world unless it is coming from a place of deep conviction.

About the Author: Mark Johnson

Mark is CEO & CMO of Loyalty360. He has significant experience in selling, designing and administering prepaid, loyalty/CRM programs, as well as data-driven marketing communication programs.

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