Cheat Code: Steal a playbook, own a category

In the first instalment of this fortnightly content series, Dan Monheit, CEO of Hardhat, says instead of staying put in their own category lane, brands should look toward other categories successfully reaching their target market, and borrow (or just plain steal) their playbook.

February 27, 2024 9:02
by DAN MONHEIT

Every category has a playbook. Washing powders focus on stain removal, are mainly advertised on TV, and target busy mums. Meal kit services focus on offering variety, advertising on social media and targeting SINKS and DINKS. Deodorant brands focus on long-lasting performance, advertise during sport and target young, active men.

It’s an unwritten but widely understood philosophy of ‘the way things are done around here’. Category playbooks, typically, are developed by well-established market leaders and set the tone for everything from packaging materials and pricing strategies to distribution channels, advertising messages, media splits and customer service levels.

Playbooks also shape the focus within a given category. They define, through comms, where to direct consumers’ attention and which features and benefits should take centre stage.

Remember when digital cameras focused almost exclusively on megapixels? Or perhaps you’ve bought a TV recently and found yourself appreciating the ‘depth of blackness’ like never before?

At some point, choosing a humble pot of yoghurt moved from being a choice about flavour to one of texture, then sugar content, GI rating and now protein. At the same time, choosing a (protein-rich) rotisserie chicken jumped from a question of free range to grain-fed to RSPCA-approved to free from antibiotics.

‘Who keeps doing this?’ I hear you exclaim. Market leaders and their category playbooks, that’s who!

While, as a marketer, you’re unlikely to be handed an actual, physical playbook when you start a new role, their existence and impact are very real. Playbooks also help us understand why most players in most categories behave in almost identical ways.

The category rules are set by the market leaders because, in all likelihood, they’ve been there for longer and had more success than anybody else. Over time, they’ve determined what works and deployed it at scale.

For challenger brands, who by definition have turned up late to the party, following the market leader is tempting. After all, they didn’t achieve dominance by accident; their playbooks must work. And they do, just not for us challengers.

For a start, market leaders benefit from the ‘Double Jeopardy’ rule. This empirical concept, proven by the good folks at The Ehrenberg-Bass Institute, explains how big brands not only have more customers to start with but also get better returns on every advertising dollar they spend because more people are already willing to buy them.

Unfortunately for challenger brands, the opposite is also true. And to make matters worse, when those already underperforming dollars are spent running the standard category playbook, the biggest beneficiary is the market leader.

Hungry Jacks ads sell Big Macs, Pepsi ads sell cans of Coke and Bendigo Bank ads drive CommBank mortgage applications. In this busy, ad-saturated world we live in, brand ads become category ads because consumers just aren’t paying that much attention. I want a burger, and a cola and a new home loan. And who’s best placed to capitalise on all of that demand? The market leader.

By now, it should be clear that running the established category playbook is guaranteed to end in tears for all but the market leader. But writing a new playbook from scratch is hard, expensive, time-consuming and unnecessary. So, what’s a challenger brand to do?

One option is to change the question we ask. By only examining what’s working in our category, we miss out on everything else that’s already working for our target audience. One strategy that many successful challenger brands adopt is the lifting and shifting of an entire playbook from a different category that’s already appealing to their audience.

Consider the remarkable success of the canned water brand, Liquid Death Mountain Water, which completely redefined the health and wellness category by ripping up the ‘bottled water’ playbook and borrowing from a completely different category altogether. From their quirky, rebellious messaging to their tallboy cans and the outrageous content they produce, the brand isn’t in the same universe, let alone the same aisle as Evian, Dasani or the bland ocean of branded water competitors.

Instead, using an extremely bold marketing approach, they took inspiration from heavy metal and punk rock, allowing them to successfully target an entirely different segment of the market: young men who might have only drunk water at the gym.

It got them noticed. The brand is on track for annual revenue north of $US120 million in four years. It has also amassed over 1.3 million Instagram followers and has just completed its second capital raise at a valuation of $US700 million.

Similarly, Frank Green, a reusable bottle brand, runs the ‘fashion accessory’ playbook, incorporating fashion style photography, influencer collaborations, high levels of product customisation, seasonal collections and plenty of talk about their design aesthetic (“Stark colour blocking, subtle curves and good proportions are the hallmarks of Frank Green’s multi-award-winning design philosophy.”). Bottles with a design philosophy? No wonder they’re $65.

HANKS, a female-founded sexual health brand, subverted the traditional lubricant and condom category (historically built around a ‘nightclub bathroom aesthetic’) by adopting the skincare and cosmetics playbook. The brand is built around beautifully photographed products in feminine colours, detailed ingredient and ‘free from’ lists, prominent customer reviews and even an online quiz to help find the right products – much like choosing a foundation. The once D2C brand is now stocked in major supermarkets across the UK, has been profitable since day one and is building out an ever-expanding product line.

As a challenger brand, expand your thinking beyond your own category and start to explore categories where your target audience is already being won over. From here, consider the playbook they run and how you might implement it as your own. After all, why start from scratch when somebody, somewhere, has already worked it out?

Dan Monheit is CEO of Hardhat.