Cheat Code: Why challenger brands should target the untargeted

Instead of targeting the same old (young) audiences, go loud and proud after the forgotten segments, which market leaders consciously or subconsciously neglect, says Dan Monheit, CEO of Hardhat, the agency built for challenger brands.

You’re an ambitious challenger brand in the hotly contested craft beer category. When you first launched, growth was explosive, but things have started to slow. You’ve been diligently following ‘best practices, ’ but your ‘6040’ ads don’t seem to be converting the way they used to. If anything, they may be doing the dreaded ‘category job’, which we all know only serves the market leader.

As you sit down to map out how to get back in the fast lane, you know there’s only one place for a marketer’s marketer like you to start: Segment, Target, Position – or, as the locals call it, STP.

STP is step one for any modern, five-star marketing plan. Unfortunately, like so much of today’s ‘best practice marketing,’ STP works particularly well for one very specific type of brand; the type that already dominates a category and can continue to do so by spending more than anyone else.

It’s not the process, but the outcomes it invariably leads to. Let me explain.

Segmentation is a logical starting point. Of course, marketers should review all buyers and potential buyers for the category and divide them into meaningful groups. When done correctly, this step focuses entirely on the market and has nothing to do with the brand itself (hence the term market segmentation).

This disciplined approach means that hypothetically, if five competing brewers undertook a segmentation project, all five would produce the same result: a list of segments that their brewery – or any other brewery – can size up, target and position an offer around.

While this seems reasonable in theory, watching it play out in practice has shown me three critical issues that consistently plague STP.

Preconceived ideas

As much as marketers try to go into this process objectively, I have yet to meet a CMO who doesn’t have at least some preconceived idea of who they’d ultimately like their brand to target.

Whatever the research turns up, our inherent confirmation bias dictates that often, there is a good chance we’ll keep doing or interpreting the research until we land somewhere close to our original hypothesis.

The same ideas

Five CMOs looking at the same data about the same audience groups could be forgiven for devising five versions of the same strategy. In fact, there’s a good chance that the preconceived idea you have about wrho you’d like to target is the same preconceived idea that your (better-funded) competitors have about who they’d like to target. How else can we explain ‘females aged 18-34’, ‘young professional singles and couples’ and ‘established families’ turning up on 98% of all briefs ever written?

Expensive ideas

Prevailing wisdom from academic institutes, including Ehrenberg-Bass, teaches us that brand growth is primarily achieved by targeting all of the segments, or at least all of the biggest segments, all of the time. If this is achievable within your budget, congratulations! There’s no need to read on. If, however, you’re working within the confines of most marketers’ realities, you’ll know that no matter how prevalent the advice or how safe the ‘target everybody’ approach feels, this strategy is a complete non-starter, especially if you’re not leading the category and enjoying the disproportionate return on marketing spend that market leadership brings (thanks Double Jeopardy).

As challenger brands, we must face reality and accept that targeting the same audience as our better-resourced competitors will only build their brand at the expense of ours. Instead, we must ask ourselves if we’d be better off taking a different, less worn path and instead, target the untargeted.

To begin, start with some clarifying questions:

  • Who’s hiding in plain sight, shopping the category but not represented in any of the comms?
  • Which groups are considered lessdesirablethan the groups every other marketer is targeting?
  • Have lazy competitors, category biases, or historical beliefs caused the exclusion of people of certain ages, genders, occupations, appearances or reputations?
  • Who already shops here and would most appreciate feeling seen?
  • Who doesn’t shop in this category but absolutely should?

Then, ask what it would mean for your brand to make a serious, unabashed play for one of these audiences. Audiences who, unlike ‘Busy Corporate Cathy’, may indeed notice and perhaps even relish the attention you’ve lavished upon them by shaping your marketing, messaging, product and offering in their direction.

Like Wild Secrets, Australia’s ‘premium online retailer for fun-loving adults’ did by going hard at the oft-ignored ‘adults 65+’ audience. Their “Better With Age” campaign (tagline: “Desire never retires”) was aimed squarely at a demographic more sexually active than we realised, more tech-savvy than we appreciated, and more cashed up than the younger audience that’s traditionally targeted.

The campaign went deep, launching with a 16-page mail-order catalogue distributed through lifestyle villages, RSLs, golf clubs, and bowling clubs. From there, the brand chose to take its campaign to traditional print media, which is now comparatively cheap because nobody, well, nobody young and cool, is reading it.

As if that wasn’t enough, Wild Secrets offered up a sitewide 20 per cent discount for anyone with a seniors’ card, as well as commissioning a large-scale study into sex toy attitudes and behaviours of senior Australians that fed the national PR machine for months. The results spoke for themselves: a 10% lift in website visits from customers aged 65+, a 19% lift in transactions from customers aged 65+ and critically, a 32% lift in revenue from customers aged 65+.

The Lord Nelson Brewery Hotel offered a similar lesson in differentiation in the crowded craft beer category. The brand focused on beer-drinking over 35-year-olds for its flagship beer, Three Sheets Pale Ale. It’s narrative being that young people aren’t mature enough to appreciate the greatness of their beer.

They cheekily raised the drinking age to 35+ targeting journalists and influencers over 35 to spread the message and designing their beer to stand out at the point of purchase with 35+ classification labels placed on their products in pubs and bottle shops.

While the product appealed to more mature drinkers, it also made younger drinkers curious to try it because they were ‘banned’ from doing so. This brilliant campaign resulted in a startling 67 per cent lift in tap sales and a 15 per cent increase in bottle shop sales.

The success of the Women’s World Cup and the spectacular growth of the WNBA demonstrated the rising popularity of women’s sports. In the $3 billion US sports bar sector, the Sports Bra split the category entirely by introducing sports bars that exclusively played women’s sports.

Opened by 43-year-old Jenny Nguyen, a former college athlete and fan of women’s elite sports in Portland, Oregon, Nguyen couldn’t find a bar that would put women’s basketball on for her and her friends to watch, even during the WNBA playoffs or the elite college basketball tournaments. So she opened The Sports

Bra, which became an instant Portland icon and turned over more than seven figures in its first year of operations.

ANZ proudly states, “Our goal is to be the bank of choice for LGBTIQ+ employees and customers”, and their all-out commitment goes back to 2007. The bank has gone beyond just comms in making the LGBTIQ+ community feel welcome: they were the first major bank in Australia to introduce non-binary gender options and gender-neutral titles when applying to retail banking products, among a raft of other inclusive initiatives.

While other banks get accused of ‘Pinkwashing,’ with token gestures at Pride, ANZ has been quietly embedding itself into the segment by targeting the ‘previously’ untargeted.

Focusing on these untapped segments can be a game-changer for challenger brands pursuing market share. Rather than scrapping it out with the rest of the category, zero in on those hiding in plain sight, create for them, embrace them, and, in doing so, pave a unique, defensible path to sustainable long-term growth.

Experience shows that if your laser-focused efforts are on point, you will not just appeal to a new audience, but create talkability in the broader market as the good word spreads. Sure, you may never quite snare that elusive ‘female aged 18-34’, but I have it on good authority that she was never that into you anyway.


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