Challenger brands win crowded markets by naming a gap in the leader's offer, proving a specific claim against it and repeating that claim everywhere a buyer looks. Avis did it in 1962 by admitting it was number two, and Dollar Shave Club did it in 2012 with a video that cost $4,500, according to Entrepreneur, and drew 12,000 orders in two days, according to BrainStation.
Last updated: October 31, 2026
Summary: This guide defines a challenger brand, walks through two documented cases, Avis in 1962 and Dollar Shave Club in 2012, compares what they share, gives a four-step plan to follow, and explains why the plan also matters for AI-generated answers. Where sources disagree on a figure, the guide says so.
Contents
- What a challenger brand is
- How Avis turned second place into an advantage
- What Dollar Shave Club did in 2012
- What the two cases share
- A four-step plan for a challenger brand
- How AI answers treat challengers
- What can go wrong
- Frequently asked questions
What is a challenger brand?
A challenger brand is a company with a smaller share of a market that competes directly against an established leader, usually by choosing one dimension to fight on instead of matching the leader across the board. The leader defines the category, and the challenger defines a reason to choose something else.
This guide uses a simple test: a challenger can finish this sentence in one line for a buyer. "Choose us instead of the leader when you care about this specific thing, because we can prove it." If the sentence needs two reasons or cannot be proved, the brand has not yet picked its fight.
How did Avis turn second place into an advantage?
Avis turned second place into an advantage by saying so in public and tying it to service. In 1962, the agency Doyle Dane Bernbach built the "We Try Harder" print campaign around the line "When you're only No. 2, you try harder. Or else."
According to Jalopnik's account, citing Slate, Avis went from a $3.2 million loss to a $1.2 million profit within a year, its first profit in more than a decade. The same account says the market share gap between Hertz and Avis shrank from 61 to 29 percent to 49 to 36 percent between 1963 and 1966. Hertz did not respond until 1966, when it began to fight back, according to the Star Tribune's history of the slogan.
Different accounts give different starting shares for Avis, with 11 percent and 29 percent both appearing, so this guide relies on the Jalopnik and Slate gap figures above. The consistent point is the mechanism: Avis named the leader, accepted the gap and turned it into a promise customers could test at the counter.
What did Dollar Shave Club do in 2012?
Dollar Shave Club launched on March 6, 2012 with a YouTube video starring its chief executive, Michael Dubin, that mocked overpriced razors. Entrepreneur reported that the video cost $4,500 to make, and a BrainStation report on the Unilever deal said it prompted 12,000 orders in a two-day span.
The company gave buyers a clear reason to switch: a low monthly price for razors delivered by subscription, in the voice of a founder who made fun of the category. Unilever announced the purchase on July 19, 2016, and Fortune reported the price as $1 billion in cash, as relayed by BrainStation. Entrepreneur's profile of Dubin gives the story from the founder's side.
Order counts and the sale price are the documented facts. Claims that one video alone produced the sale are interpretations, not findings, because the company also built a product, a supply chain and a subscription model.
What do the Avis and Dollar Shave Club cases share?
Both cases share four moves: a named gap in the leader's offer, one provable claim, a single channel where the audience already was and constant repetition. This guide calls the pattern Gap, Proof, Channel, Repetition.
| Move | Avis, 1962 | Dollar Shave Club, 2012 |
|---|---|---|
| Leader | Hertz | Established razor brands |
| Gap named | The leader is complacent, the challenger tries harder | Razors are overpriced and a trip to the store is a hassle |
| Proof | Shorter lines and better service at the counter | A low monthly price and a working subscription |
| Channel | Print advertising | A YouTube video |
| Result, per the sources above | First profit in a decade, share gap narrowed | 12,000 orders in two days, $1 billion sale in 2016 |
Neither brand tried to beat the leader at everything. Each picked one point where a buyer could judge the difference without a spreadsheet.
What is a four-step plan for a challenger brand?
A challenger brand can follow four steps: name the leader's accepted weakness, make one claim with documented proof, choose one channel and repeat the claim in every touchpoint. The order matters because each step limits the next.
- Name the weakness in the buyer's words, using sales calls and customer reviews, not internal language.
- Make one claim and attach a document that proves it, such as a price list, a test result or a named customer.
- Pick the channel where the audience already pays attention, and make one piece that fits it.
- Repeat the claim in the website headline, press pitch, sales deck and support scripts until they match.
If no leader's weakness is open, a company can define a new category instead, as the create a category guide explains. A company that has already changed its name or look should confirm the claim survives the change, as the repositioning after a rebrand guide shows. For press, the startup press coverage guide covers tactics for companies with small budgets, and the launch PR guide lays out a twelve-week plan.
How do AI answers treat challenger brands?
AI answers often favor the brand that most pages describe for a given qualifier, so a challenger can win a narrower question even when the leader wins the broad one. The site's own analysis, The Qualifier Just Rewrote a $30 Billion Category, reports that Optimum Nutrition wins the broad protein query, while adding a qualifier such as "clean" or "transparent" hands the answer to a much smaller brand.
That finding is first-party analysis, and readers should treat the method as the site's own. The practical reading is straightforward. A challenger should publish clear, dated pages that state the specific qualifier it owns, support them with evidence and keep the wording consistent across its site and press. AI assistants that answer from retrieved pages can only repeat what those pages say.
The related guide on best-known brands and AI answers covers the mechanism in more detail.
What can go wrong with a challenger strategy?
A challenger strategy fails when the claim cannot be proved, when the gap is not real to buyers or when the company changes the message too early. A comparative claim also needs evidence, because a false claim about a named competitor is a legal and reputation risk.
- A claim with no document behind it, which a reporter or buyer can test and disprove
- A gap that matters to the company but not to the buyer
- A new slogan every quarter, so repetition never builds
- A comparison with a named competitor that the company cannot substantiate
- A product that cannot deliver the promise at scale
Counsel should review any comparative advertising before it runs. The best test is the one-sentence version of the claim: if the sales team cannot say it the same way the ad does, the message is not ready.
Frequently asked questions
What makes a brand a challenger brand?
A smaller share of the market, a direct fight with a leader and one clear reason to switch. A challenger competes on one point, not on everything.
Do challenger brands need a big budget?
No. Entrepreneur reported that Dollar Shave Club's launch video cost $4,500. The cost of proof and consistency still matters, because the claim must hold up.
Is admitting weakness a good strategy?
Sometimes. Avis admitted it was number two and tied it to service, which gave buyers a reason to test it. The admission worked because the promise was specific.
How does a challenger get press coverage?
By giving reporters a clear gap, a checkable claim and a named customer or data point. The product pitch guide on this site covers the steps.
Can a challenger brand win in AI answers?
It can win narrower questions by publishing consistent pages about the qualifier it owns. The site's analysis of protein brands shows a smaller brand taking an answer once a qualifier is added.