Opinion

Why 2016 will be the year of the challenger brand

10 min read

07 January 2016

With 5.2m SMEs in the UK making up 99 per cent of British business, there is a wealth of brands looking to challenge the market leaders and make their way to the top of their respective sectors. But what makes a successful challenger brand and how can your brand stand out from the crowd?

Of course, challenger brands are nothing new in business. There have always been battles for competition from Virgin Atlantic taking on the might of British Airways when they only had one plane, to Brewdog taking on established pub chains and bringing microbrews to the masses.

However, being a challenger doesn’t necessarily mean it’s all about the size of your business. Today, more so than ever, to be a challenger is a state of mind. To be deemed a challenger brand you chose to consciously adopt a certain company culture that runs through the core of who you are and why you exist.

Typically, challenger brands have a key focus of doing one thing exceptionally well. Any given market place can be crowded, with hundreds of operators but a true challenger will simplify the process to make the lives of their customers easier and then exploit this to full effect in order to claim a market share.

Businesses that fit the mould will spot a discrepancy in their sector and aim to eradicate it. This doesn’t always have to be something consumers are already aware of, as the nature of a challenger brand culture is to question, innovate and improve.

Let’s take Uber as an example. There are hundreds of taxi and mini cab companies operating in any given city, all with their own self-proclaimed levels of “exceptional customer service” and “competitive prices.” 

What makes Uber stand out, and why they have been so successful, is the simplicity of booking a taxi at the tap of a button and not having to handle a cash transaction. Uber makes consumers lives easier. More than this, they also reward customers by incentivising cash rewards through their referral system, giving consumers an extra impetus to use their service over and above other taxi companies.

Though the benefits are clearly recognisable to consumers, disruption has been caused within the industry with vocal protests from the black cab community in particular, having caused problems for the taxi app, mainly in the press.

But to a challenger brand, conflict is all part of progression and if the status quo wasn’t being questioned then they wouldn’t really be a challenger.

GoPro is another a brand that has clearly carved out its own niche in the market and stuck to it.

In an age where everyone and their mum owns a smartphone with an inbuilt camera that’s great quality, a tiny camera with limited functions should be obsolete, but a GoPro is an incredibly desirable item, because it does what it says on the tin and excels at it.

It’s portable, durable, high quality and the team haven’t wasted their efforts on trying to expand into other markets, they’ve just continued to do what they have always done, but better.

Essentially, a challenger brand looks to capitalise on gaps in the market through disruption, positively questioning the status quo and introducing new ways of thinking

Any business can seek to provide competition but that will quickly fall away unless your product offering, service and business model holds up, so having a core philosophy and moral fibre is essential.

Green and Blacks Organic chocolate are a good example of this, with all products subscribing to fair trade and their packaging made from 100% recycled materials – giving them a real point of difference in a competitive market.

Once a niche has been carved out and exploited it can be easy to rest on your laurels but by the nature of challenging, these brands are continually looking to innovate and be better, almost competing against themselves to stay ahead of the curve.

Uber recently introduced a mechanism to split fares amongst friends, another way to make life easier but also another shrewd move through which to encourage more referrals; whilst GoPro have introduced a range of HD cameras specific for every sport from skiing to surfing. In order to continually challenge, there is no rest. 

Of course, with most people carrying their lives in their pocket, technology plays a significant role in innovation and creates a more accessible platform through which to reach an almost infinite audience. 

Another example of a challenger business is Cake, an app which allows people to pay their restaurant or bar bill at the tap of a button. Like Uber, the app makes life simple, giving customers the opportunity to close their tab and pay their bill when they want and split the bill amongst friends.

The fact your friends need the app to pay their share encourages more downloads, particularly when everyone receives £10 off their first bill each, making for a cheap night out and helping to build consumer loyalty.

Whilst many challenger are purely tech based, others are harnessing technology to help more traditional businesses flourish.

Take Fantastic Services – a business which offers everything from cleaning and gardening help to pest control and pet care support.

Their services are typically old fashioned trades that are not new to the service industry, but with the introduction of a slick iPhone app, the business has created a one stop shop for all service needs, removing the need to individually source a handyman, or a removal van etc.

With a couple of swipes up to eight different types of service can be booked for the same day, if you so wish – again making the consumer life much easier.

Once you have your brand USP and know who you are and why you exist, the next step to being successful is cohesive communication.  All communication should have the same tone of voice that’s intrinsically linked to your product or service.

You need to effectively articulate your core beliefs and company culture in everything you do from the product/service itself to your customer service team, website, social media channels and press coverage. As challenger brands intrinsically know who they are, this can make the delivery of communication a whole lot easier, compared to a competitor who is having an identity crisis.

For instance Marks and Spencer are viewed by some as a food store and others as a fashion outlet. Who they really are is difficult to define, yet competitors in both sectors like Waitrose or John Lewis have a much easier time in defining their story.

If you are a business who is unsure of how to tell your story, speak to a specialist team who can help you or risk being overtaken by a challenger with distinct clarity over who they are.

So why will 2016 be the year of the challenger brand?

Challenger brands are the zeitgeist. The platforms and communication channels exist in abundance and the inspiration from brands like Spotify, Innocent, Dyson, Primark, Nails Inc and so on are the testimonials to prove that success can be achieved.

At the same time we have seen the failures of those who are unable to keep up and have stopped challenging, most notably Kodak and HMV, who have allowed for disruptive brands to dislodge their place as market leaders. In a recovering economy, confidence is high and opportunity to challenge is rife.
 
Cameron Hall is an account director at PHA Media, within the entrepreneur and business department