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The beauty of being a challenger brand

Nick Reynolds
Nick ReynoldsChief Marketing Officer Asia Pacific
As Chief Marketing Officer for Asia-Pacific at Lenovo, I am responsible for marketing PCs, tablets, smartphones, enterprise servers and storage, in a diverse and fast growing region. I’m an energetic and highly driven marketing leader who embraces innovation and has a deep understanding of the customer-led, digital transformation happening in the current market. I joined Lenovo in 2007, bringing with me a wealth of expertise from both sales and marketing roles built at several FORTUNE 500 companies including Dell, Apple, Gateway and SABRE.

Follow me on Twitter @nickonthemove

What does it mean to be a challenger brand?

You would think all brands and businesses want to be number one and rule their category globally. This is true to a certain extent – ambition, success, profit, and strong continuing returns to shareholders are all commonly found aspirations at the top of global organisations.

But there is a certain advantage inherent in being a challenger, and it carries with it a whole different set of brand strategies. Sometimes, at its essence, being a challenger brand is a mindset as much as anything. And it’s a powerful mindset at that.

Category-leading brands must always stay aware of the challengers nipping at their heels.

I’ve touched on some of these brand strategy approaches in an article about marketing in the digital age. At Lenovo, we like to think of ourselves as a challenger brand. Even though we’ve had some amazing success, rising to the top of certain categories in certain markets (although not all of them) – we recognise there is power in being a challenger brand, so we seek to capitalise on this.

Category-leading brands must always stay aware of the challengers nipping at their heels. Complacency doesn’t cut it in business, as examples of fallen heroes such as Kodak or Blockbuster might demonstrate.

That is a reality challenger brands can take advantage of. There is less to lose, and naturally more to gain. Risks can be more easily and readily taken. Attention can be more aggressively sought. Tone can be amped up. Creative approaches can be designed and rolled out to shake up the norms. (All of which is useless – of course – without a great set of products and services). The importance of product innovation for challenger brands cannot be overstated, and I’ll get into that more in a minute.

The toolkit of a challenger brand

Challenger brands are up against dominant players – so they must think and act differently. Can you be first to market with a product or service, even just in a specific location? Can you own a product attribute that consumers will readily associate with your brand? Can you specialise in a target or niche market that is not serviced by the leading brands in your category? Ask these questions and the answers will influence not just your brand strategy, but your overall business strategy.

Following his influential book Eating the Big Fish, author Adam Morgan founded a brand strategy firm, which publishes some interesting ideas. I like the idea of differentiating from the same story everyone else in your category is telling. Morgan points to techniques like The People’s Champion (think Virgin), The Missionary (think TOMS shoes), and The Next Generation (think PayPal and any blockchain related business). Morgan’s concepts are well worth a read.

At Lenovo, we’d like to think we are in ‘The Next Generation’ grouping of challenger brands. This group delivers product innovation to established categories. For us in PC & SmartPhones this kind of thinking led to innovations such as YOGA → We listened to feedback from customers saying they wanted a PC that could ‘fit their lifestyle’ such as on a communal work table to show and share ideas & on airplanes to consume multimedia without getting their screen crushed….so the result was the YOGA multimode PC here.

A challenger can be a past leader, or it can be an incumbent trying out a new business model.

Taking advantage of digital and social media is an essential concept for challenger brands. Not only are the cost efficiencies substantial compared to using traditional media, we know that our audiences reside in the online arena in massive numbers. My own strategy across the Lenovo brand since becoming CMO has been to prioritise digital and social in our media spend. We now spend more than 70% in that space versus less than 30% three years ago before I took my current role.

How Moto embodies a challenger brand ethos

This article is not an ad, but in making my point, our sub-brand Moto is a great example of a smartphone challenger brand. The youngest of consumers out there might not realise this, but Moto (then known as Motorola of course) was once THE world leader, they basically invented the cell phone category. Over time, the brand lost its way, was eventually purchased by Lenovo, and now is effectively a challenger brand: In its new guise, Moto does not yet hold the market share of competitors like Apple and Samsung.

To reiterate, the point is that being a challenger brand is as much a state of mind as anything else, and Moto embodies this ethos. A challenger can be a past leader, or it can be an incumbent trying out a new business model, or an established company which leads in one sector and challenges in another.

So what then is the challenger brand strategy for Moto?

There are a couple of approaches I’d point to here, and as alluded to, product design and innovation is definitely one of the big factors. Earlier in 2017, the Moto team was thrilled to take down a couple of Red Dot Product Design awards. Red Dot is a prestigious, German-based international design competition, often attracting in excess of 15,000 submissions per year.

So this was a big deal for Moto, and we caught the industry’s attention through true design innovation. From out of nowhere a challenger brand turned heads through the engineering and design of a series of consumer research-driven modules – called MODS. These are click-on mods that essentially augment or turn the smartphone into everything from a true zoom camera and stereo speaker, to a projector and gamepad.

Beyond product design, the brand has taken a cheeky approach to marketing campaigns, encouraging consumers to look past our competitors. Campaigns like Skip the Sevensreferenced here drove close to 20 million social media engagements following full-page ads in broadsheet media.

Leading the field is a great position to occupy, but life can be pretty exciting as a challenger brand too.

Moto has also continued to capitalise on the original ‘Hello Moto’ mods viral video, where a focus group panel of people, first exposed to the Mods believed them to be a competitor development – only to realise they were a new Moto innovation. As you can see, the ‘Hello Moto’ challenger brand creative continues well into 2017. Moto also works with different influencers in different regions to drive engagement and share stories, all selected based on the passions they bring to the table.

All of these strategies represent a challenger brand at work, changing the game and the marketing stakes because it has to, and because it has chosen to. Not all of them will be right for every brand, but you can see how the right mix can be applied. Leading the field is a great position to occupy, but life can be pretty exciting as a challenger brand too. Take advantage of your position and make it happen!

Thanks for reading – let me know your challenger brand strategies in the comments below, or reach out to me on Twitter!

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