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How Houseparty, What3words and Ugly Drinks think disruptively to challenge incumbents
October 13, 2020
Houseparty, Ugly Drinks and What3words share how challenger thinking, meeting your audience where they are, and measurable innovation will set you up to steal market share.
As Covid side-swept us, we saw a shift in how brands, both large and small, communicated and sold to their customers. Many challengers saw it as an opportunity to think differently, run creative campaigns, and gain a share of voice while established brands paused and cut budgets. Tube ads were up for grabs and startups like geo-location app What3words were able to grab a TV spot.
Whilst generally large established brands often benefit from larger budgets and historic brand equity, challenger brands can disrupt using their size, mindset, and lack of bureaucracy to their advantage.
We’ve spent a lot of time speaking to, and being inspired by challenger brands over the past six months. Here's what we learned...
“There are so many different ways to be a disruptor brand. One thing I definitely stress is there’s being a 'disruptive brand' as such and having a brand identity and brand attitude that is disruptive, but you can also be a 'disruptive business'. I think the best businesses do exactly that.” Joe Benn, Ugly Drinks Co-founder
Think: Test and learn
A brand is much more than a name and a logo. It’s an intangible feeling, like the gut response you get when you first meet someone.
Ugly chose a very ownable name that disrupts the sector. Most other fruit and water based drinks use prettier words like Innocent or Evian. For this reason their name is memorable; the word Ugly stands out and creates intrigue. Their tone of voice follows suit. Phrases like “contains no unattainable lifestyles” play on relatable social norms in our current climate.
Their Co-founder, Joe Benn, told us about the importance of proof of concept as a challenger brand saying, “Test and learn, test and learn, over and over and over again. We’ve done things at times that make no sense and that big brands definitely would not do. For example, we’ve launched a limited-edition flavour concept in the US where we will do exclusive drops of flavours like Cherry Cola, Sour Apple, there's a Marshmallow that’s launching this week. We do small runs of about one thousand cases. We sell them online and it’s like a sneaker drop. We sell out within 24 hours. People go crazy for them and we get loads of messages saying ‘I need to get my hands on Cherry Cola’. For us, this tactic is about proving our concept.”
Think: Fast and creative balanced with long term brand building
Because Challengers are often dealing with a small budget, they’re inspired to think fast and act creatively. If you can’t outspend the big brands you need to outfox them. Flexibility in production and design allow challengers to identify new trends and tap into them much quicker than a large corporation might be able to. Product launch takes four months on average for DTC companies while it can take a full 22 months for CPG companies, according to IAB and McKinsey.
That being said, building a brand takes long term commitment, not short sightedness with advertising and campaign activations. Finding the sweet spot is important. What3words CMO, Giles Rhys Jones, didn’t hide the fact that their company strikes a balance between long term strategy and short term tactics.
“You've just got to keep momentum and keep moving fast. And we do that on everything. We do that on our product development, on our marketing and advertising, and on our business development as well. We spend 80% of our time and budget working on things that we know work well. LinkedIn advertising, Facebook advertising, events, that sort of stuff. And then we spend 20% of our time looking at measurable innovation, things that might not work, but we want to give them a go.”
Think: Meet your customer where they are
Challengers build communities, not customers. Online communities are one of the major factors that set challenger brands apart.
Now more than ever, people want to engage with bigger causes. They want to feel like they are a key part of building their favourite brands. A whopping 68% of Gen-Z expect brands to contribute to society.
People want to have an authentic dialogue with brands and know that they are listening. If you’re really curious about this, read Ben Keene’s ‘Five R’s of Tribe Building’. Ben is the Co-Founder of Rebel Book Club and TribeWanted.
Houseparty is a great example of a brand that has created a loyal, engaged community. Julia Onken, Houseparty’s Product Marketing Manager shared, “We were the number one app in 82 countries this year, which is mind blowing. I think one of the reasons that Houseparty blew up during lockdown was that we had that base of highly engaged users of a certain demographic (Gen Z) that were able to introduce the app to the rest of the household.”
Julia stresses the importance of meeting your users, or customers, where they are. “Many of us will have companies, brands and products that have a subset of users that are vocal, and it's really easy to only listen to those users. These are people that will post on Reddit or Twitter, or reach out with their opinions which are often negative. And it's really easy to take those as a big representation of how your users are feeling. It’s definitely important that you do keep your eye on those, but it's not necessarily representative of the majority of your target users. Meeting your users where they are is about figuring out how to put together a well rounded user research programme, so that you can get a holistic perspective and build your roadmap around it.”
She went on to tell her stories of hanging out with throngs of teenagers at pizza restaurants across the US, sharing google docs with these groups of kids to create their game Chips And Guac, and how targeting Gen Z didn’t keep Houseparty from being popular with truckers who craved office chit chat. You can find her full talk here.
Speaking of communities, the Future Unicorns community on slack is for brand managers and marketers who value challenger thinking. You can apply to join here.
Kelly Mackenzie, Creative Director of White Bear Studio says, “Combine the scalability of an established brand with the best traits of challenger culture and you’ll be able to bring some attention grabbing ideas to market. To do this, everyone in the company, regardless of region, rank or role, needs to be inspired to innovate.”
We’re seeing a lot of innovative and creative thinking, particularly in response to Covid. Brands are being nimble, fast, more creative, innovative, and are deeply aware of their customer needs, all whilst keeping an eye on longer term brand building.
Still curious? We can help your brand think disruptively. Book in a pro-bono brand brainstorm with our team here.