Fighting challenger brands—6 ways to prevent upstarts from stealing your market share

Nigel Farage’s shock decision to take leadership of the Reform Party partway through the United Kingdom’s general election campaign was a thorn in the side of Conservatives, who ultimately lost to Labour in a landslide. Though Reform won only five seats in Parliament, Farage’s bold tactics helped him win more than four million votes (14% of national voters). Loathe him or love him, Farage and Reform’s success is the latest example of a classic challenger brand strategy. As Labour and the Conservatives now prepare to grapple with Farage's populist insurgency, brand strategists can see how this disruptive playbook has upended industry after industry. The plucky David-vs.-the-tired-and-dull-Goliath story is a familiar one. An upstart brand, laser-focused on an underserved audience, takes on sleepy industry giants. Whether it's Brewdog (now 25% of U.K. craft beer sales) vs. brewing titans; Aldi and Lidl (a combined 16% of the cutthroat U.K. grocery market) vs. the big four supermarkets; or EasyJet (19% U.K. airline market share) vs. flag carriers such as British Airways, the pattern repeats. Ad Age Leading Women Luncheon Join us Aug. 7 in New York as we recognize this year’s honorees Buy your ticket today The incumbents’ first mistake is to underestimate the newcomers, seeing them as a niche player. But by the time they wake up to the threat, the challenger has captured the imagination of a core base and redefined category expectations—much as Reform did with the Conservative Party. Some 52% of shoppers now visit Aldi or Lidl every 12 weeks. “Honest pricing” is the new ante in air travel. And “craft” is an essential beer segment. Farage is following this classic disruptor playbook. Despite Farage being a privately educated, former banker who enjoyed the creature comforts of the European Parliament for decades, he has managed to build his “man of the people” schtick with aplomb. Reform UK's—and by that Farage’s—positioning is crystal clear: It is anti-establishment and anti-immigration. It appeals to people who feel insecure about their role in society, whose ambitions are unfulfilled, who feel ignored by politicians and who are looking for someone to blame for their discontent. Ten out of 10 for brand clarity. So, what can market leaders do to stave off hungry challenger brands? Reconnect with your core Stay attuned to your customers' evolving needs and keep stroking their loyalty. Check your complacency and avoid chasing every competitor's move. Reassert your leadership and purpose. Innovate to disrupt yourself Don't just wait for challengers to dictate your innovation agenda. Listen to your customers' pain points and use your scale and capabilities to proactively solve them in novel ways. Cannibalize your own legacy cash cows if needed. Selectively attack challengers' vulnerabilities Resist the temptation to match upstarts tit-for-tat. Lean into your particular strengths to expose their weak points. 40 under 40 entries are open The final deadline for nominations is Aug. 2 Enter here Counteroffer rather than counterattack Work on making your pitch as compelling as possible in a way that makes choosing you so much more attractive. As time passes, you can reshape your positioning to make you less vulnerable. Don’t be tempted into copycat tactics Every challenger needs an adversary. If you copy its approach your position will be weakened. The Conservatives slipped up here with a sudden rash of copycat tactics and election pledges on national service, pensions and stamping out so-called Mickey Mouse university degrees. Show another side to your character If you’ve always been a serious brand, do something or reveal something unexpected that shows a different side to the brand personality. But take care not to over-repeat. The unexpected laughter in the election debate when Keir Starmer—now prime minister—said “My father was a tool maker and my mother a nurse” is a case in point. It was an incredibly useful tactic when people thought he was “posh” but not great when repeated ad nauseam. Retain that element of surprise and delight. We can all make our own minds up about whether the establishment parties were ambitious or aggressive enough in their response to Farage and Reform U.K. But for anyone invested in fighting off challenger brands, there are some useful conclusions to be drawn. Check out the latest Ad Age events and award programs

Fighting challenger brands—6 ways to prevent upstarts from stealing your market share

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