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Having an underdog brand can sound like a tough position in a dog-eat-dog world.
But Mike Sullivan says that if you know what you’re doing, being an underdog brand has some unique advantages that let you fly under the radar and then crack open the markets the big dogs play in.
Mike Sullivan, CEO LOOMIS Agency
What You’ll Discover About an Underdog Brand:
Mike Sullivan, CEO LOOMIS Agency
* How an underdog brand uniquely positions itself to challenge market leaders,
* The 3 factors that successfully fuel an underdog brand
* Why focus is an underdog brand friend
* The underdog challenge for leadership in protecting a nimble business culture
* AND much more.
Guest: Mike Sullivan
Mike is President and CEO of LOOMIS, the country’s leading challenger brand advertising agency. For more than 30 years, he’s helped some of the country’s most successful companies build their brands and together with Michael Tuggle, an award-winning creative director and writer with more than 25 years in the ad world building brands and growing companies, he co-authored The Voice of the Underdog: How Challenger Brands Create Distinction by Thinking Culture First.
Related Resources:
If you liked this interview, you might also enjoy our other Branding episodes.
Contact Mike and connect with him on LinkedIn.
Learn more about LOOMIS
FREE DOWNLOAD: Surprising Advantages to Being an Underdog
Check out his book: The Voice of the Underdog: How Challenger Brands Create Distinction by Thinking Culture First
Also referenced by Mike: Adam Morgan’s book Eating the Big Fish: How Challenger Brands Can Compete Against Brand Leaders
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Secrets to Underdog Brand Success with Mike Sullivan
Having an underdog brand can sound like a tough position to be in a dog-eat-dog world but today’s guest says that if you know what you’re doing, being an underdog brand has some unique advantages that let you fly under the radar and then crack open markets that the big dogs play in. And when we come back, we’re going to find out more.
This is Business Confidential Now with Hanna Hasl-Kelchner helping you see business issues hiding in plain view that matter to your bottom line.
Welcome to Business Confidential Now, the weekly podcast for smart executives, managers, and entrepreneurs looking to improve business performance and their bottom line. I’m your host, Hanna Hasl-Kelchner, and I’ve got a terrific guest for you today.
He’s Mike Sullivan, the CEO of LOOMIS, the country’s leading challenger brand advertising agency, and the coauthor of The Voice of the Underdog: How Challenger Brands Create Distinction by Thinking Culture First. He also has a free download for you that I’ll tell you about towards the end of the program.
Of course, I want you to listen to this first, right, because there’s a whole lot more than what he’s going to tell you here that is in the download, but it’s valuable. So, first, let’s learn more about the leverage underdog brands have.
Welcome to Business Confidential Now, Mike.
Well, thank you, Hanna. It’s a pleasure to be here.
It’s great to have you. Now, I know people like to root for the underdog, an underdog team, the Cinderella teams and so forth, but help us understand what an underdog brand really is. How is it different from the average startup or small business? I mean, what makes it a serious contender?
Yeah. Well, I’ll tell you. Your entrepreneurial listeners will sort of understand this intuitively. A challenger brand sort of classically defined as any brand other than the category leaders. So, there’s Coca Cola and there’s everybody else. There’s, I guess, American Airlines would be the biggest air carrier in the United States, and of course, there’s everyone else.
But that’s not a real creative way to think about what a challenge of brand is. Every following brand is not necessarily a challenger brand. And my coauthor, Michael Tuggle, and I talk about the challenger brand ethos in the book, and we like to talk about it. It’s sort of constructed of three different things.
So, number one is definitely state of market. Okay? So, we’re not number one, but we’ve got a culture of ambition. Okay? So, we’re trying to become number one at something. Not everything. It’s something and that leads to state of mind. So, we are trying to be the best at something or we already are the best at something. So, that sort of speaks to a culture of commitment.
And then the third thing is what we call a state of readiness. So, it’s the willingness of the entrepreneur or the leaders inside an organization to really embrace new modes of thinking, and so that’s a culture of willingness. And this one’s really important, the willingness to zig while others are zagging, to break with category conventions, to sort of upset the apple cart, if you will. And those three things: state of market, state of mind, and state of readiness really come together to form. So that ethos of the challenge of brand mindset is what we like to call it.
I love the way you broke that down. I think that’s really helpful. In your experience, somebody who wants to be the underdog, that sort of like Rocky climbing the stairs at the art museum and knocks out the big contender. What do they need to work on the most? Where do people fall short in these three categories and states of mind that you just described?
Yeah. Well, I would say, Hanna, that it’s really state of readiness. It’s just the willingness to embrace new modes of thinking. And let me just say it to you, I’d love to take all the credit for kind of thinking up the way challenger brands come to market.
But anybody listening to this is really compelled by the whole idea of challenger brands. I’d love you to read my book, definitely, but there’s a great book that was published back in – I think it was 1999 by Adam Morgan called Eating the Big Fish, and Adam does a terrific job.
Really, it’s the best work out there, laying out what it is that challenger brands, people who want to take full advantage of sort of a challenger brand mindset need to do, what they need to get their arms around, and really, it comes down to thinking. It’s thinking like a challenger.
So, we like to tell our clients, “Look, we’re here to outthink, not outspend the competition, where you can’t just simply replicate the strategies of market leaders. We’ve got to invent our own.” Every challenger has got particular circumstances that are unique to them, and it does us no good to go out and try and simply rip off a strategy of a market leader and copy that for ourselves.
We’ve got to create strategies that are uniquely ours and work for us in the marketplace. So, I put it down to state of readiness and the way we’re thinking as leaders, if we’re talking about, I’d say the primary impediment to becoming a challenger brand.
Well, that makes a lot of sense. I like to just focus on that a little bit more because it’s one thing to do something different. A challenger brand, the underdog, if you will. The underdog brand by definition is smaller. Right? And so, they’re going to have limited resources and they really don’t have the bandwidth to be trying a whole bunch of crazy stuff just to be different.
So, how would you counsel or coach them to be strategic in their state of readiness and willingness to try different things so they can try different things in a smart way so that they don’t burn through all of their cash?
Right. Well, I’d say the first thing is focus. Focus is your friend, and I think it’s very true for entrepreneurial minds. We like to think that everybody is going to be the customer for our product or our service, and that’s just not true.
So, get radically focused on who exactly your customer is and radically focused on what it is that you’re providing, what need you’re solving for them. And I think I can probably expound on this a little bit by sharing some of my favorite Challenger brands, ones that I’m watching right now, anyway. There’s a little brand called Liquid Death. Have you heard of Liquid Death, Hanna?
No. And at my age, I’m not sure I want to.
And that’s exactly the reaction that Liquid Death is trying to provoke. That’s beautiful. That’s exactly what they’re trying to provoke. They are a mountain water beverage company. You would never know it from the name, and that’s sort of the whole point of it.
So, they’re a mountain water beverage brand. They’ve got a really unconventional approach, starting with the name Liquid Death. Well, what’s that all about? Well, so instead of selling beauty, peace, and tranquility like their competitors do, Liquid Death sells an aggressive approach to saving the world from plastic. So, they sell not water in aluminum cans.
So, their taglines and there are various of them is, “Murder Your Thirst, Death to Plastic.” And if you go on their website or you look at their brand, they look like a brand that is absolutely running against the grain of the category. There’s not another beverage brand like them that is selling pure mountain water.
So, again, that goes back to mindset. They thought very differently about the category. They flipped it on its head and they said, “Hey, what if we cultivate a big following among young consumers and try to create sort of a cult like following around them, everything rooted in their brand values?”
Again, they’re celebrating absurdity, they’re being bold, they’re taking risks and doing things differently.
They’re leaning into fearlessness, irreverence, and that sort of thing, and they are crushing it. I want to say that in the first month, their social numbers exceeded Pepsi’s Aquafina on Facebook and I think on Instagram as well.
So, big marketplace success, again, running against the grain and doing something completely different, surprising consumers. So, I love that example. And of course, there’s plenty of others. I love brands like Chick-fil-A and Trader Joe’s, and I don’t know if you’re familiar with Lush, it’s a brand you’ll find in malls.
They’re a cosmetics brand that has done just a terrific job disrupting that category. So, you look at disruptors and how they show up in a category and what is it that they’re doing different? What are they focusing on very precisely, and who are they focusing on?
They’re not trying to be all things to all people. Just like Liquid Death wouldn’t be a beverage that you might pick up at the grocery store but jeez, those teenagers sure love it.
Well, it certainly provokes curiosity, you know? Is this the key to euthanasia? I know, but – [Laughter]
Right.
Yeah, I can definitely see why it has that sort of cult like appeal.
Right. You think in terms of niches? Very often I think when we’re thinking about our products or services, again, we’re thinking, “Gosh, everybody needs this.” No, the truth is not everybody needs it. So, get very specific about who it is you’re serving and what’s your specific focus is going to be about.
The more laser focused you can get in that respect, the better off you’re going to be. Start small and customers will find you, but start small.
I like the phrase you used before about radically focused. I think that’s a fascinating way to phrase it. Now, when it comes to underdog brands, are most of these deliberate or can some of it happen organically?
I would say that most of them are deliberate. They may not think of themselves classically as challengers, but certainly, it goes back to that mindset. They’re definitely understanding that they’re doing things very differently.
You look at a brand like Chick-fil-A, Truett Cathy, the founder of Chick-fil-A back in the 60s, say, “Hey, I’m going to be a challenger brand. I’m going to run against the grain.” No, he didn’t. What he likely did was he got very clear on his values, his personal values, first and foremost, and then he built a culture around his original store or stores that reflected those values.
And you know that brand is famously polite and nice. They’ve got a super strong culture that emphasizes customer service and hospitality. It’s a family friendly atmosphere that’s really positive and respectful. And that was Truett Cathy, and so that would have been his vision back in the 60s. And because it has been maintained by the family, it’s a family owned brand, I believe to this very day.
They’ve continued that to this very day. And if you look at the quick service restaurant category, Chick-fil-A on all of the measures and there are studies done in the segment that measure things like friendliness of the restaurant chain. They routinely are number one, and I mean we’re talking for decades they’ve been number one. And the second place finisher is a full 25 points below them.
Well, how do they pull that off? It was interesting. I was listening to a archived radio show with Truett being interviewed by a couple of radio show hosts. And they said, “Truett, how is it that you train people to be so polite and to say things like please and thank you?”
And he said in his slow Southern drawl, he says, “Well, gentlemen, I don’t train people to say please and thank you. I hire people who say please and thank you.” And so this is where culture becomes so important for supporting what a brand wants to do, and it’s trying to be in the marketplace.
Truett Cathy and the people at Chick-Fil-A understand who they are, what they represent in the marketplace, and then they go out and they find more people like them and they invite them into their company and then they train them certainly to execute in such a way that they are delivering on their brand promises, and that’s why we talk about in the book where it is a mouthful, the title.
It’s The Voice of the Underdog: How Challenger Brands Create Distinction by Thinking Culture First. We really believe, that is my coauthor and I, Michael Tuggle, really believe that culture becomes so critically important for helping brands create distinction. It’s when that culture is perfectly aligned with who they say they are in the marketplace, that the magic really happens. I’ll take a breath here and let you –
Because it’s a lot to digest, it really is. I’m just wondering, big companies. The Coca-Colas of the world, they’re always coming out with new products. Is it possible for them to have an underdog brand?
Well, I think it’s difficult. If you look at Red Bull, for example, who basically single handedly invented the energy drink category, Coke was very late to that game. I forget the name of the product that they just introduced maybe a year and a half ago finally to try and compete with Red Bull.
And they aren’t having the success that Red Bull has. Obviously, Red Bull is now the market leader, and this is the thing about challenger brands. They don’t start as market leaders, but often, they do become market leaders. So, I think it’s possible, Hanna, but I don’t see it happen very often in nature.
I’m a kid from Detroit, so I watched the big three automotive companies stumble along and act like category leaders for many, many, many decades, and it finally caught up to them. And now you see sort of a little evidence of challenger thinking, but honestly, I think that’s a real liability for category leaders. And that’s one of the reasons that challengers are able to succeed.
Category leaders very often don’t take them seriously. They underestimate challengers. And I think, again, it comes back to culture. If you’ve got the culture of a category leader that informs your behavior in one way, if you’ve got the culture of an aggressive following brand, we’ll that informs your behavior very differently.
Well, when an underdog brand does become a market leader, like Red Bull, what do they need to focus on in order to maintain the culture that got them there?
Well, that’s a great question. So, it really comes down to leadership and staying radically focused on the things that did get you there, what it is that’s important to your customer, staying tuned to that, offering new products, new services that are relevant for your customers.
But the truth is we see a lot of examples where challenger brands – look at Southwest Airlines, for example. They grow and maybe they grow past, maybe the founder or the original leadership group leaves and things change dramatically.
So, Herb Kelleher, who founded Southwest Airlines famously in the – I think it was the 1970s, put together this killer little regional airline brand and did things very differently from the rest of the airline industry. Well, Herb left in 2004. I think he retired at that point and has since passed on.
And the CEO who followed him was more focused on the numbers and it dramatically changed the culture. And only a month or so ago, I think it was over the holidays, you saw how that caught up to them. They’ve got apparently a scheduling system that’s severely antiquated and they’ve got a culture that’s degrading.
And Southwest Airlines is no longer the darling of the airline industry that it once was. And so that’s definitely something that leaders of challenger brands as they mature and grow really need to be watching out for. I think, though, for smaller entrepreneurs, smaller challenger brands, man, that’s just pure opportunity.
I mean, look what Tesla did. Look what Elon Musk did with Tesla coming out of relative obscurity to really upset the auto industry in a way that is pretty profound, if you think about it. What he was able to do singlehandedly, who would have ever thought that there would have even been another auto manufacturer in the United States, let alone one that’s been as successful as he has been?
So, again, it really comes down to maintaining that culture over time to sustain that kind of success.
And you definitely don’t want to outrun your headlights like Elon Musk is doing sometimes.
Yeah.
Or become the subject of a Saturday Night Live skits like Southwest has become.
Yeah, exactly. Exactly. Well, and that’s so with Elon Musk, too. I mean, guys, he doesn’t need my advice, but I mean, focus is your friend. If you want to build the world’s best auto manufacturer, well, just focus on that. He’s into a lot of other things, and Twitter being the latest of those things.
And certainly, I’m sure he’s got a plan, but when you get distracted, nothing good happens. Let’s just say that.
Fair enough. Fair enough. What is it about company culture that you think strengthens underdog brands more than it strengthens a big organization? Have they just lost focus?
Well, I think company culture can strengthen big organizations, just in a different way. I mean, when you break it down, so what is company culture? It communicates to your employees, to your customers, to your partners what the organization stands for.
And it can really contribute to building a positive image and create that emotional connection with them. I think that in smaller companies, very often the leadership team and the leader, whether it’s a founder or an entrepreneur, is closer to the action. The team sees that person, they’re engaged and there’s a lot of energy that comes with that and they can use that advantage.
And that is an inherent advantage being smaller and more nimble. They can use that to really fortify their culture, to really work, to communicate more clearly and regularly with their team members. I don’t know if you’re familiar with Kip Tindell, the founder of The Container Store.
He likes to say communication is leadership. Well, in smaller companies, you’ve got a great opportunity to communicate all the time, every day. I think in large organizations, leadership can often become distanced. When do you see the president of a Fortune 500 company? Maybe once a quarter, maybe once a year? I don’t know.
But in a smaller organization, you have a front row seat to the action, and that can be a tremendous advantage.
If you had to boil it down, what would you say the secrets to underdog brands’ successes?
Well, again, I would say it first, not to retread focus. I think that’s critically important but I would say the passion and the energy that these young, small, cagey brands have, that is something that is very difficult to replicate by market leaders.
There’s an enthusiasm. There is a fire in the belly of these smaller brands that I think is just – it can be really magical. And so I just think that I’d settle in around there as my answer to that question.
Wonderful. Wonderful. Now, before we run out of time, I do want to talk about your book, The Voice of the Underdog: How Challenger Brands Create Distinction by Thinking Culture First. I’m just curious, what prompted you to write it and what do you think the most important messages that you want readers to take from it?
Well, the thing that prompted my coauthor, Michael Tuggle and I to write this book was, so often we see companies show up with advertising dollars and they want to sort of spend their way to success without giving a whole lot of thought to what’s happening inside the organization.
So, they almost think about their brand and their culture as being two completely different things. I’ve got a company culture over here. We’re doing one thing and I’ve got a brand over here and I want to promote that.
And for us, the most successful clients are the ones who understand that culture and brand are first cousins. They really shouldn’t be separated. When you get your culture right, your brand has got a shot at becoming something really special, not just an average brand, but something really special.
And again, the book is full of all sorts of examples like that. So really, that’s the core message of the book. Think about your brand and your culture together. We like to say that a brand is what people think it’s like to do business with you. Well, what it’s like to do business with you is very much a reflection of your company culture.
Make no mistake about it. So, that would be, I think, my strongest sort of takeaway for the book, and certainly it’s the reason why we wrote it. It’s full of great examples of how really impressive leaders make that happen every day inside their organizations.
Wonderful. And that just ties in so beautifully to is what you said earlier about Chick-fil-A and hiring the right people from the get-go that share the values. So, even though people think about sales and marketing as sort of being first cousins, it sounds like human resources and the hiring process needs to muzzle right in there in between them.
That’s 100% right, Hanna. In fact, we’ve got a chapter in the book that says why HR and marketing should share an office. I mean, absolutely, HR and marketing need to be linked up. No doubt about it.
Fabulous. Well, thank you so much, Mike. This has been great. And as I mentioned at the top of the program, Mike has a special gift for you. He’s got a free download. It’s called, “Surprising Advantages to Being an Underdog.” It’s a no strings attached download, no email, and no password.
So, come on over to Mike’s episode page at BusinessConfidentialRadio.com and you’ll also find out more about his work at LOOMIS and his book, The Voice of the Underdog: How Challenger Brands Create Distinction By Thinking Culture First. That information, plus a transcript of this interview can be found in the show notes there. Again, that’s BusinessConfidentialRadio.com.
So, thank you so much for listening. Please be sure to tell your friends about the show and leave a positive review. We’ll be back next Thursday with another episode of Business Confidential Now. So, until then, have a great day and an even better tomorrow.
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