The challenges of challenger brands

by | Nov 1, 2012 | Differentiating Your Brand, How To Select An Ad Agency

We were invited to a pitch today. The potential client has grown quickly and out grown the agency they had. This is always an unfortunate situation, but, it’s always better to refocus early, before things get totally out of wack.

In a fast growth market, there are certain places a brand wants to be: first, biggest, most well known. Ideally, all three. The problem comes when you’re none of the above and searching for an added edge to continue your growth. This pitch was a bit different, in that we weren’t given much time (a week) and we weren’t given a brief, it was more of a capabilities presentation. Of course, the first question coming out of the audience (it’s a franchise organization so there were a lot of bodies in the room) was have you done work for someone like us before? The old catch 22 question which is why the old industry adage of  “it’s better to be lucky than good” often comes to play in matching agencies to clients. Or, as they also say- it’s not what you know, but who you know.

In our background research we were finding that they are in a segment experiencing phenomenal growth. They’re on the map as a one to watch. The problem is, the number one player in their field, carved a niche away from the original number one by offering a very clear point of differentiation and then proceeded to own the niche like it’s the main event. The number two and three brands have been busy trying to out niche the leader and our potential client was trying to play leapfrog on the very same platform.

Stop.

This is what challenger brands should never do. Don’t play follow the leader. Don’t assume that what works for the leader can be copied, duplicated or improved- need proof, how’s Barnes and Noble really doing vs Amazon in just the eBook reader market? Never mind the selling of books. If you are going to be a challenger brand, the most important thing that you can discover to build a strong brand DNA is your brands “unique selling proposition,” a concept developed by Rosser Reeves for the Ted Bates Agency in the fifties. Brands that find their USP find that their products and services are much easier to sell and have a conversation with their customers because there is no cloud of confusion surrounding their products. Apple is a great example of a challenger brand that still isn’t the biggest by market share, but has grown from near bankruptcy to the most valuable company in the world based on the USP of products that are beautiful and easy to use. Google has grown by proving itself useful. Neither were first to market, but both found that by sticking to simple messaging they could own a position that could be unique to them. You’d think that other computer companies would figure out that ease of use is important, but it hasn’t happened yet.

While McDonalds and Burger King and sometimes Wendy’s, Hardee’s, Jack in the Box and countless others fought to be “THE” burger chain, Subway grew to have the most outlets by focusing on a more approachable business model with easier entry for franchisees. Five Guys is making all the burger joints look twice at trying to be something for everyone, as they stick to the knitting of making a better burger. When McDonalds began, there were no chicken nuggets, salads or coffee bars, it was burgers, fries and milkshakes.

If you want to be a challenger brand, that’s fine. But, the truly great understand that to steal a phrase from designer/author Marty Neumeier,  in his book, “Zag“, “when others zig, zag.” He stresses the need for radical differentiation. It’s not just enough to talk about a strategy, you have to actually have one. Five Guys isn’t winning the burger wars because they have free peanuts, it’s because they hyper focused on a better burger and a simplified menu in a no-frills space.

Challenger brands that find their USP and convey it in a clear, differentiated voice, soon find themselves in a category all of their own. Find your USP, or find an agency that you can talk to about finding it, and you’ll be on your way to success.

The new Burger King looks more likeFive Guys

by | Apr 4, 2012 | Crispin Porter + Bogusky, Differentiating Your Brand

Driven Thru

Burger King bowing to Five Guys?

Creative Commons License Photo Credit: Chris Nixon via Compfight

Fast food is a tough category. While McDonalds obviously has the secret sauce to the number one spot, the actions of number two through five are like watching a three ring circus. Only one can be something for everyone, everyone else, needs to figure out how to be the anti-something for everyone and pick their niche.

Chipotle is the envy of the industry- with a ridiculously low ad budget (they actually dropped from $7.5 million in measured media in 2010 to $5.8 in 2011 according to Ad Age Mar 12, 2012, “Chipotle aims to buck fast-food convention- while it still can“) and a menu that doesn’t change much and a business model that doesn’t rely on “Sales” or price off promotions. Chipotle has a value proposition: a big portion of fresh locally sourced food, that’s made to order in front of you. Subway uses part of the same model and is the number two fast feeder: A custom made sandwich at a reasonable price.

Lately, Burger King has ditched one of the hottest agencies in the country, Crispin Porter + Bogusky, cut ties with CMO Russ Klein (who has bounced back at Arby’s) and gone back on the mission to out-McDonald’s McDonalds:

The restaurant’s menu will include a record 10 new items, among them, made-to-order smoothies and three new salads. Burger King also will increase its marketing efforts, featuring soccer player David Beckham, talk show host Jay Leno, actress Salma Hayek and singer Mary J. Blige in upcoming commercials. The chain plans to send out 40 food trucks across the country to hand out food at events and set up sampling inside some Burger King locations.

The chain is reportedly attempting to broaden its menu with healthier and more snack alternatives in an effort to appeal to mothers, families and Baby Boomers. Burger King and its franchisees will spend an estimated $750 million to revamp stores over the next 12 months.

via Burger King to Roll Out 40 Food Trucks Nationwide | Mobile Cuisine - Food Trucks, Carts & Street Eating.

Burger King built their business on the Whopper- a burger that used to be bigger and tastier than a Big Mac. The company hit pay dirt when they challenged market leader McDonalds with “Have it your way” as a way to differentiate their offering as made to order and fresh- utilizing “Flame broiling” instead of frying- positioning them as the burger kings- in the same way you make a great burger in your back yard. Burger King appealed to some of the same triggers that work for Chipotle and Subway- their food was made more the way you make it at home. Home cooking beats the factory- that was a message and positioning that resonated.

To be the Burger King, all they had to do was make the best burger our there. Now, they are placing bets on salads, frappes, wraps and famous faces. Compare that to upstart chain, Five Guys. The whole business is focused on making burgers and fries. When you order- the cashier calls back the number of patties that need to be on the grill- nothing else. Take out the frying surface and replace it with open flame grilling and they would be the penultimate burger kings.The oversize portions of freshly cut fries as well as the fresh meat burgers make them the new Burger Kings. Advertising is mostly accomplished by word of mouth and the reviews posted around the store remind you that this is the burger joint of old reincarnated. Note- they don’t have a dollar menu, don’t do couponing, no TV ads either. Like the Chipotle model, the entire kitchen and process is on display.

My visit yesterday to Burger King to check out the “new changes” confirmed that BK isn’t the Burger King anymore- despite having cast aluminum burger flippers for door pulls, once I got into the line and watched the digital menu screens show me salads getting the sexy dressing pour and sundaes getting drizzled with chocolate sauce - I almost forgot I was in a burger place. The menu is schizophrenic with “stackers” for a buck- and the next step up is a burger starting at $3+. To confuse matters there are a ton of chicken offerings, salads and who knows what else. No one told me it would be at least three minutes for the “Chicken snack wrap” until after I ordered and the confusion of trying to speed things up by switching, then not switching my chicken for a second stacker reminded me of a three ring circus.

The moral of the story is to be successful, a brand has to know who they are and stick to it. That’s why the new Burger King is obviously Five Guys.