Brand Disruption 101: What is a Challenger Brand?

If you’ve never heard the term, or felt fuzzy about the details, a challenger brand is a new or small company trying to disrupt the status quo of an industry. 

Basically, if there’s a big-name establishment brand that everyone knows in an industry, the challenger brand is its opposite number. But a challenger brand isn’t just a challenger to a single company, but often to many. Think of “Nirvana” in the ‘90s, bringing a grungy, garage-rock aesthetic in a time of overproduced glam music, or Uber/Lyft using the rise of mobile devices to rethink transportation in a very traditional and codified industry. 

Through innovation, disruption, or radical messaging, a challenger brand goes head to head with the accepted and well-worn ideas of an entire industry.

Today we’re examining how to identify a challenger brand, the problems they often struggle with, and the strategies these brands use to find success in crowded, firmly-entrenched markets.

What is a Challenger Brand: A Checklist

“Challenger brand” isn’t a new term: it was coined Adam Morgan’s book Eating the Big Fish over twenty years ago. It’s sometimes used interchangeably with a small or startup brand, but that isn’t accurate. A challenger brand has to, well, challenge something.

There are five traits common to most challenger brands. Think of this like a checklist, and they should have more than half of the boxes ticked to apply.

✅ Innovation. Challenger brands deal in new ideas, novel technologies, or fresh business models that set them apart from the existing brands in the space.

✅ Disruption. Challenger brands aren’t here to iterate or squeak by, they’re trying to come in and flip the table. They see how the industry is and seek to break it or change it, possibly forever. They are offering something different or better.

✅ Unique Positioning. A challenger brand may not be altering the status quo, they may instead be founding an industry that doesn’t exist or targeting an underserved market. Their goal is to carve out a niche for themselves and their product, solving a problem that isn’t being addressed. They are focusing on segments and pain points that established brands haven’t noticed.

✅ Aggressive Marketing. Challenger brands use creative, bold, and even shocking strategies to stand out from their more famous or established competition. They often have less marketing firepower and have to employ it outrageously to grab attention and market share. 

✅ Customer-Focused Model. These brands can’t rely on existing knowledge, loyalty, or customer inertia. Challenger brands have to understand their target audience inside and out, they have to address their needs, and prioritize customer advocacy to win customer loyalty.

The Downsides of Being a Challenger Brand

Being a challenger brand is difficult by definition: overturning industries doesn’t come without effort. First, we’re going to cover the most common difficulties, and in the next section tackle the strategies that overcome these obstacles. 

🠋 Limited Budget. Challenger brands aren’t always swimming in cash, and usually have smaller budgets than the giants in their industry. Massive ad campaigns, prime advertising spaces, and high-profile events might be out of reach at first. 

🠋 Difficulty Building Brand Recognition. Consumers crave familiarity, and challenger brands don’t have it. Not only that, the disruptive and innovative nature of a challenger brand means the consumer needs more education to even understand what they’re trying to do. Challenger brands have to fight tooth and claw for credibility, trust, and attention. 

🠋 Powerful Competition. Sometimes challenger brands are taking on companies that have existed for decades, even a century. The companies are well-known, flush with capital, and trusted by the market. Some of these brands may even have created the industry, or been there when it was founded. 

How Challenger Brands Beat the Odds

Now we get to the fun point: these are the strategies and tools that help challenger brands not only succeed, but achieve their revolutionary goals. 

Besting the Budget

🠉 Data Collection and Targeted Marketing. Challenger brand resources can’t be wasted on broad efforts. Identify the marketing channels and audience segments that are most likely to resonate with your brand. Running A/B tests on ads, tracking data, and social media analytics can all help here. Brands are even experimenting with wearable tech to track consumer emotions during events.

🠉 Accessible Digital Marketing Channels. Challenger brands love digital marketing channels. Social media, email marketing, content marketing, and search engine optimization (SEO) help tight budgets go further. 

Revving Recognition

🠉 Strategic Partnerships and Collaborations. Partnerships with complementary brands or influencers help challenger brands boost their recognition. Co-marketing efforts and collaborations can expose the brand to new audiences.

🠉 Consistent Brand Messaging. A consistent and compelling brand message across all marketing channels builds familiarity and trust. Challenger brands often have only a single shot to reach a consumer, so wherever they find the message it should encapsulate the brand.

🠉 Agile Engagement. Challenger brands are often smaller, but they’re also more agile, with fewer layers between thought and action. They can use their flexibility and agility to respond quickly to customer feedback or market changes. When things aren’t working, challenger brands can implement changes or improvements faster.

Curbing the Competition

🠉 Engage in Storytelling. Challenger brands live and die by their story. Why are they breaking the door down, why does the industry need to change, why is this brand the one to do it? Compelling storytelling creates an emotional connection with your audience. 

Campaigns with emotional content are twice as effective as campaigns without. 

🠉 User-Generated Content (UGC). Challenger brands can offload some of their marketing juice to their audience. They encourage consumers to create content about their experiences with the brand. UGC can significantly impact brand credibility and visibility while showcasing real customer satisfaction.

Over 70% of consumers say UGC had a direct positive influence on their purchase intent. 

🠉 Highlighting Differences. The most successful challengers emphasize what makes their brand unique. It’s their primary sticking point. Whether it’s innovation, better customer service, ethical practices, or unaddressed problems, challenger brands communicate why they matter.

Product education is key here. Field teams and field marketing are invaluable to challenger brands, and show consumers in person what makes the brand matter. 

Challenging Expectations

Challenger brands are incredibly important, injecting new ideas, technology, and solutions into the world. They fundamentally change how industries function, how products are viewed, and they inspire new generations to not only build something new, but to shake up what we already have.

Whether you’re part of a challenger brand, looking to build one, or just in need of creative solutions to marketing challenges, reach out to Inspira Marketing today.