The Top 3 Marketing Strategies for Challenger Brands

Marketing Strategies

The Top 3 Marketing Strategies for Challenger Brands

In recent years, marketers have started looking to “challenger” brands for a new way of doing things. Unlike establishment brands, these newcomers aren’t worshipping the almighty dollar. In addition to sales goals, they typically have softer goals such as promoting a harmonious workplace or improving the world with their product. Challenger brands often seek to disrupt the market. Because they’re smaller, these brands must be innovative thinkers – especially when it comes to marketing.

How does a challenger brand differentiate themselves from the pack? Let’s look at some examples.

Do Something Different (Than the Leader)

If you aren’t the industry leader, then you can choose one of two paths: Either you copy the industry leader with hopes of achieving similar success, or you move in a completely different direction. The latter was exemplified by Apple’s famous “Think Different” campaign, crafted in the late 1990s by ad agency TBWA\Chiat\Day. The original one-minute commercial featured images of icons including Albert Einstein, Mahatma Gandhi and Amelia Earhart; innovators in their respective fields.

Apple’s underlying message was clear and effective: Big thinkers make history. And WE are big thinkers.

With this campaign, the company defined itself as an innovator in the computer industry. Apple paved the way for “Number Two” companies to leverage their uniqueness against the competition. In contrast, Avis rental cars took a more direct approach, using their secondary status as a humorous hook in their ads. “We’re #2, so we try harder,” their campaign asserts. Avis cleverly turned being second-best into an opportunity to showcase why they’re better than industry leader, Hertz. When marketing your challenger brand, look at what your company does better than the leading brand. Are you friendlier? More technology-savvy? Does your company help homeless puppies and give away free ice cream? Whatever you do better, tell us! 

Use Incentives to Drive Loyalty

We all love free stuff. So, it’s no surprise that “free gift” incentives increase brand loyalty up to 90%, according to Harris Interactive research. More than half of respondents said they were likely to share their buying experiences with a friend if they received a gift with purchase. From a marketing perspective, it’s not about bribing consumers – it’s about attracting them to your product or service the first time. You still must put in the work to retain their loyalty.

A gift doesn’t have to be a physical item, either. It can also be a steep discount or free first-time service. For example, rideshare giant, Uber, offered a $20 credit to first-time users who are referred by a friend. Use the credit and your thoughtful friend scores $30 in rideshare credit. It’s a win-win for both of you. Drivers can earn even more cash for referring friends – up to $2,500 with one recent promotion! The big winner here is Uber, which earns new business or has a new potential driver every time a referral is made. What kind of incentives can you offer current or potential customers? Remember, you don’t have to literally give something away. Offering free shipping on online goods, for example, nets one of the biggest loyalty payoffs.

Focus on Consumer Experience

There’s a reason why so many negative reviews appear on Yelp, Google and other consumer ranking sites. (And it’s not just because the American public loves trolling.) Consumers are fed up with industry leaders that offer poor customer service or high pricing. Challenger brands like Warby Parker, a custom eyeglass manufacturer, strive to change that dynamic. By designing frames in-house and skipping the manufacturers used by other big-name eyewear companies, this upstart can provide cute, vintage-inspired prescription glasses to consumers at a fraction of the cost. They also let consumers try on a pair at home, free of charge. Warby Parker is currently valued at $1.2B and donates a pair of glasses to those in need for every pair purchased.

The takeaway? Discover what consumers want, and find a way to provide it. Apple positioned itself as a creative innovator, while Avis focused on reputation and customer service. Uber revolutionized the transportation industry and offered incentives to both drivers and end users. Warby Parker succeeded because they filled a consumer need for affordable, yet stylish, glasses.

Read forums and review sites for your industry to find out what potential clients want. See where your competition is lacking, and focus your marketing efforts on showing how your company is better. For more information on how Gumas can take your brand to the next level, contact us at 415-621-7575. Or, connect with us online and subscribe to our Challenger Brand Marketing Newsletter.

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