What are challenger brands and why do we need them?

25 June 2019 4 min read

Brand Strategist Katie Sandell looks at what makes a challenger brand and why they’re so important in today’s marketplace.

In industries from banks to travel, from cars to smoothies, challenger brands are taking an increasingly prominent position in their markets and can take many forms. We hear people referring to them and how they’re changing the marketplace, but what I’m interested to explore is whether or not they need to follow a set criteria in order to be labelled a ‘challenger’ and also why it’s important that we have them in today’s society.

What is a challenger brand?

“A challenger brand is defined, primarily, by a mindset — it has business ambitions bigger than its conventional resources, and is prepared to do something bold, usually against the existing conventions or codes of the category, to break through.” — The Challenger Project, by eatbigfish

Ultimately, being a ‘challenger’ brand is not about who they’re challenging – for example their competitors in the marketplace – it’s much more about what they’re challenging that’s important; it’s more about the marketplace and what expectations they’re trying to shift. 

These companies by their very nature tend to be hungry, ambitious and entrepreneurial. It also helps if they’re a bit nimble in their approach as it helps them to feel fresh – this is why it’s often difficult for larger established brands to become challenger brands. Being a ‘challenger’ is often routed in a company’s DNA which is why it’s often not something that comes from an already big corporate.

Why do we need them?

What would a marketplace be like without challenger brands? The answer: it would be a bit dull and probably quite predictable. Companies would say that they know who their audience are and how to sell to them, but what the marketplace would lack would be the sparky ‘outside the box’ brand who focused on a single goal and has the ability to turn everyday customers into brand ambassadors. By presenting a new mindset and proposition to the audience, a brand has the ability to create a real movement in the marketplace.

Not only this, but challenger brands have an ability to unlock their marketplace and create a new avenue to market to customers, by encouraging their audience to change their expectations.

What makes a good challenger brand?

The culture and mindset of a company are the things that allow a company to be a challenger brand, but it has to be something that the whole company can get behind and believe in. For example, if you’re a challenger brand in the banking sector, for example the likes of Monzo and Revolut, you may want to change the way people currently think of banks – stuffy and corporate – and change this expectation to be something different – understanding you and how to keep banking in tune with your busy life. 

Also, f you’re ‘the bank of the future’ like Monzo, but you have a heavy-weight phone system for your customer services enquiries, this clearly doesn’t fit with your brand. Being a challenger brand – or any brand for that matter – should be something that you live and breathe as a company and should be something that manifests itself at every touchpoint.

Challenger brands are crucial in today’s society, where the consumer not only has a huge amount of choice at their fingertips, but also have the ability to choose a brand based on their actions and what they stand for, rather than purchasing purely by product. We know that the millennial audience is much more likely to purchase from a brand who has a cause and so this naturally gives challenger brands an advantage in the marketplace.

At Mobas, we live and breathe brands and we love getting under the skin of what makes them tick. By understanding a brand’s point of difference in the marketplace, we can really bring this to the fore through their marketing communications and give them standout in the market to resonate with their audience.