How to Build a Challenger Disruptor Brand Strategy

We love a plucky underdog. A challenger taking on the main contender. A David vs. Goliath.

Edmund Dantès in The Count of Monte Cristo rebuilds his identity from nothing, and systematically achieves every goal he sets. He doesn't just rise, he dismantles everyone who put him down. The underdog winning against all odds.

Or the disruptor breaking the system that holds them back.

Bob Dylan singing about having a head full of ideas and being made to scrub the floor. He broke free from Maggie’s Farm to make those ideas a reality.

Challengers and Disruptors are woven into our Cultural narratives.

What this looks like for Brands

A challenger or disruptor brand strategy isn't about the size of a business. It's about a mindset. A mindset which has purpose, bravery, innovation and ultimately benefits consumers in a way that isn’t currently being met.

On one side we have - fresh thinking, consumer-centric products, personalisation, fast paced decision making without layers. On the other established thinking building decades of knowledge, distribution strength, higher awareness, existing relationships and deeper pockets.

But the challenger and disruptor has something the established brands don't. Passionate energy in abundance, newness and a youthful vigour that can't be manufactured.

The way a brand brings this to life might be in many different ways; Mission-led, Rebel, Cause-Champion, Scene-hero whatever the approach, they all share something. A mindset.

However, new businesses do have a significant chink in their armour. Often challengers and disruptors have the name badge but don't actually commit to the act. They do what the market leader does, with a smaller budget and in a more scrappy way. That isn't a challenge. That's just a newer version of the incumbent. Same looking jumper, less bobbles.

What a genuine challenge looks like

The clearest examples are the ones where the leader genuinely can't respond.

giffgaff launched into a UK mobile market dominated by enormous networks running near-identical models: long contracts, subsidised handsets, call centres, retail footprint spanning ageing high streets.

giffgaff's challenge wasn't "cheaper SIMs." It was a member-powered model, online only, no contracts, community-run customer (or as they are called, member) service, and additional benefits for those members who wanted to get more involved in how giffgaff was run.  The big four couldn't simply copy this. Their entire commercial structure depended on the thing giffgaff was rejecting.

As a CEO of a FTSE 100 company said to me, ”Tom, I know the problems we have but this juggernaut is just too big to turn around."

The Telco juggernauts were just too big to do anything other than what they had always done.

The mobile networks' reaction? To make new brands which offered something similar, but never had the authenticity or culture to pull it off. The mindset was wrong.

Beavertown Brewery, with craft beer darling Neck Oil, did something similar in beer. The big brewers had spent decades building consistency and scale as virtues. You can see the same green and red star in your local supermarket, in an Irish pub on Koh San Road and a bar on Bondi Beach.

Beavertown's challenge was built on the opposite: bold, illustrated, unmistakable branding and beer that tasted like someone with a point of view had brewed it. The traditional breweries couldn't credibly chase that territory.

The big breweries' reaction? To buy the new upstarts and force them into their same model, and hope consumers didn't care too much. ‘Bier is bier’.

The foundations - your non-negotiables.

Business, like life, is about choices. Some of them uncomfortable. When I work with founders, one of the first questions I ask is, ”What are the non-negotiables for this business?" Let's get them on the table now and look at what they could mean today and tomorrow.

Those non-negotiables are the foundations of the business. They are what is truly important to you and why.

Having foundations that the leading brands can't follow, or don't have enough guts to, means you are building a Brand on unique and solid foundations. It also means real trade-offs. Turning down customers, or taking a hit on revenue and profit when it goes against your non-negotiables.

giffgaff could have driven significant customer acquisition through a retail footprint but it was against what the brand believed in. A few years later Big Telcos started to close their high street stores and try (behind the curve) to move online. giffgaff was already there.

Challenger brands can default, often by a series of small almost subconscious decisions to a safer version of the incumbent. A slight step to the left on category conventions, with more energy, brighter colours, and a younger tone of voice. It looks different, but it isn't really challenging anything. The leader can absorb this kind of difference in the long term without changing a thing, because nothing about the challengers underlying model is actually under threat.

Sticking to your clear and unique non-negotiables gives you an advantage that can't be eaten away.

Where do you go from here?

Once you have those clear non-negotiables you need to ask your self a series of questions.

Starting with - What do you want people to feel about this business? Not think. Feel.

Interrogate the answer.

Now ask - what’s the one thing you want a customers to tell their mate about you. Put it in their language.

Interrogate the answer.

Go deeper - why are you taking this approach? Why now? What are you not? Why?

What’s the benefit to the consumer, that they aren’t getting and won’t get from anyone else?

Pressure test the thinking.

These answers with your non-negotiables are the business's oxygen. They are what you truly are and what you will never trade away. Because trading it away would mean trading away the reasons you exist.

giffgaff's non-negotiable was mutuality (in fact giffgaff is an old Scottish word for mutual giving). Everything giffgaff did had to have members at the heart of it. The route from A to B was harder because of it. But it meant that the non-negotiable always stayed. In place. It was in every decision, every meeting, every conversation.

Find your answers that are genuinely yours and build everything from there.

One more structural advantage worth naming. Be quick but don’t hurry. The incumbent takes a quarter to make a decision a challenger makes in a week. The ability to respond to a cultural moment, a consumer shift or a competitive move — while the other side are still in a meeting room not noticing what's happening, is something no budget can replicate.

The culture is your advantage

At giffgaff there was a promise - if the business is people-powered, it's not just customers who are at the heart but also the people who work here. On every board agenda, it would start with a focus on People, not the Numbers.

Everyone in your business needs to understand what you stand for and why they turn up. Not just intellectually but emotionally. They need to know the non-negotiables, understand why the business exists, why it does things the way it does, and how they personally fit into that. What they can do to drive success and be successful themselves.

This is the biggest advantage. Coming in powered up and engaged on a Monday morning, while others are standing in a coffee queue, is a benefit not to be sniffed at.

Empower people and they will care. People who care can do things that will amaze. Those who are just doing a job are..well…just doing a job.

Minimal politics, recruit slowly, and don't hire careerists, as they will corrode your business from the inside. Treat being structurally small as an asset. The bigger businesses operating model will be slow, costly, conservative on risk, and layered with complexity and sign-off, and that is precisely what makes the challenge impossible for them to absorb.

Everyone has a plan until they are punched in the face

The hardest moment for any challenger or disruptor isn't the fight on the way up. It's what happens when success arrives. When your foundations are rocked.

Both giffgaff and Beavertown faced it in different ways.

Acquisition interest, investment from the very same category giants they'd been built against. The pressure to scale, to professionalise, to sand down the edges that made them work in an Excel spreadsheet.

It's the moment the challenger has to decide whether the non-negotiables it defined at the start were genuinely non-negotiable, or just convenient when they were small.

That's the final test of a genuine challenger brand. The big baddie at the end of the level. Not whether it can disrupt the market. Whether it can hold its position when the market tries to absorb it.

The brands that win as challengers and disruptors aren't always the loudest or the most rebellious. They're the most committed — to a position, to a model, and to the discipline of not becoming the thing they set out to replace. And when the inevitable challenges come, when the market tries to absorb them and the pressure builds to dilute what made them work, they don't budge. They double down.

We Are Thought has built challenger positioning from the inside, at giffgaff and Beavertown and others. If you're working out for your brand. Get in touch. tom@wearethought.co.