The Art of the Possible: If You’re Going to Win, Someone Has to Lose
We’re a nation that loves punching above its weight. We’re just sometimes a little embarrassed about throwing the punch.
There’s something slightly strange about the way we talk about growth in New Zealand. We’re perfectly comfortable saying we want more customers, more revenue and more market share. It’s when you ask where we’d quite like that market share to come from that things can get a little awkward.
Suddenly the language becomes softer. We want to “grow the category”. We want to “create new occasions”. We want to “expand the market”. Ideally, we’d like our business to get substantially bigger without anybody else’s getting any smaller. It’s an admirably polite ambition and it reflects how kiwis are as people. Unfortunately though, that’s not usually how market share works.
Every time someone switches bank, changes broadband provider, buys a different beer, chooses another insurance company or moves their weekly shop somewhere else, one company gains a customer and another one loses one. The clue, I suppose, is in the word “share”.
Of course, markets can grow. New products create new demand, innovation changes behaviours and genuinely new categories emerge. But for most challenger businesses operating in established categories, particularly in a market the size of New Zealand, growth isn’t primarily going to come from making the proverbial pie bigger. It’s going to come from taking bites of somebody else’s slice.
And some of those slices are very big indeed. You only need to walk down a supermarket aisle to see what competition really looks like. Shelf space is finite. Every extra facing one brand wins is space another brand doesn’t get. The household names sit there in blocks, often with multiple products, sizes and variants, while smaller challengers fight for whatever space they can earn around them.
But those positions aren’t permanent. Pic’s Peanut Butter started life at a Nelson market stall in 2007, taking on Sanitarium, which was then the dominant brand on supermarket shelves. Today Pic’s has around 41 percent of the New Zealand peanut butter market and is the category’s number one brand, while Sanitarium has exited peanut butter altogether.
Pic’s didn’t need New Zealanders to suddenly start eating twice as much peanut butter. It needed enough of us to reach past the brand we already bought and pick up theirs instead. That’s challenger growth in its simplest form. Your slice gets bigger because somebody else’s gets smaller.
Which is why I’ve always found our discomfort with competition slightly curious. New Zealand itself is one of the world’s great challenger brands. We love the underdog. We celebrate punching above our weight. We take enormous pride when a Kiwi athlete, sports team, business, film, technology or idea arrives on the world stage and gives somebody considerably bigger a bloody nose. It’s part of our national mythology.
Yet when it comes to our own businesses, that challenger spirit can sometimes disappear remarkably quickly. We don’t want to look too ambitious. We don’t want to upset the market leader. We certainly don’t want to name the competitor whose customers we’d quite like to acquire. So we sand the edges off the proposition, make the advertising a little more category-friendly and quietly hope people notice us anyway.
There’s a wonderful Yiddish word for the quality I think challenger brands need more of: ‘chutzpah’. It’s difficult to translate precisely, but audacity gets reasonably close. Chutzpah isn’t arrogance or aggression for aggression’s sake. It certainly isn’t permission to make false claims or take cheap shots at competitors. It’s the confidence to look at a much bigger business and say: we think there’s a better way to do this. More importantly, it’s having the courage to explain why.
Perhaps the incumbent has become expensive, slow, complicated or difficult to deal with. Perhaps they’ve stopped serving part of the market particularly well because, after years of dominance, they haven’t really needed to. Perhaps there is simply something customers have learned to tolerate because nobody has given them a credible alternative. Those aren’t things for a challenger to politely avert its eyes from. They’re the opportunity.
One of the most useful questions I think any growing business can ask itself is remarkably simple: whose customer are we trying to win? Not merely who is our target audience. Most businesses can produce a reasonably attractive PowerPoint slide explaining that. I mean whose customer are they today?
If your strategy says you’re going to take five percent of the market over the next three years, where exactly is that five percent coming from? What are those customers currently buying, who are they buying it from and why would they leave? Most importantly, what are you prepared to say or do that gives them a compelling reason to change?
Those questions tend to produce a much sharper strategy than simply deciding we need “more awareness”. Challenger businesses rarely suffer from a lack of theoretical customers. They suffer from a lack of reasons for somebody to change.
The incumbent, after all, starts with enormous advantages. Familiarity. Distribution. Mental availability. Existing relationships. Bigger budgets. Often decades of accumulated trust. A challenger doesn’t overcome those advantages by behaving like a slightly smaller version of the category leader. It has to give people a reason to reconsider the default.
We’ve seen it happen before in New Zealand. Our mobile market was once dominated by Telecom and Vodafone. The arrival and subsequent growth of 2degrees gave consumers a genuine third nationwide alternative and helped reshape the competitive landscape. That didn’t happen because a challenger respectfully waited for the incumbents to leave a little market share unattended. Somebody decided there was an opportunity and went after it.
This is where I think Kiwi modesty can occasionally become a commercial handicap. Humility is a wonderful personal quality. I’m less convinced it’s always a useful growth strategy. There is nothing inherently noble about allowing the biggest company in your category to keep a customer you could serve better.
If your product is genuinely better value, say so. If your service is faster, prove it. If the incumbent is making customers tolerate something they shouldn’t have to tolerate, point it out. If there’s an outdated convention in the category that exists largely because everybody has always done it that way, challenge it. You don’t owe the market leader deference simply because they got there first.
In fact, the bigger the incumbent, the more opportunities there can be for somebody smaller to exploit the things size makes difficult. Large organisations have legacy systems, layers of approval, established pricing models, competing internal priorities and enormous existing customer bases they often can’t afford to disrupt. Challengers have something very different: freedom.
They can move faster, speak more plainly and make choices the incumbent can’t. They can serve customers the market leader considers too small, awkward or unprofitable. They can take positions that would struggle to survive twelve rounds of internal approvals. But those advantages only matter if the challenger is actually willing to behave like one.
There is a line, obviously. Competition doesn’t require nastiness, and great challenger brands don’t need to shout, bully or manufacture outrage. In fact, the best competitive marketing often has a smile in it. It pokes, prods and occasionally takes the piss. But underneath the theatre is something strategically serious: a clear understanding of whose business they want, what they believe the incumbent is getting wrong and why they deserve the opportunity to take it.
Perhaps that’s what we need to become slightly more comfortable with. Ambition isn’t impolite and competition isn’t aggression. Wanting your business to win doesn’t make you a bad corporate citizen simply because somebody else would prefer you didn’t.
Nice guys don’t necessarily finish last. But brands that are so worried about offending the competition that they never give customers a reason to switch very often do.
So if you’re serious about growing market share, be equally serious about where it’s going to come from. Identify the customers you want, understand what their current provider isn’t giving them and find the advantage you’re uniquely capable of exploiting. Then have enough chutzpah to go after it.
Because if you’re going to win market share, someone else has to lose it.