In today’s competitive landscape, buyers often gravitate toward established, familiar brands. This can make it challenging for smaller, up-and-coming brands to break through. But being a challenger brand offers its own unique advantages, especially if you can find innovative ways to differentiate yourself and build stronger relationships with customers.

When talking with revenue leaders in a buyer panel, this was one of the biggest and most recent issues facing smaller brands. In fact, in our 2024 B2B Buying Disconnect Report, 66% of buyers mention that they opted for a familiar or more established brand during the buying process instead of going with a potentially more cutting-edge, niche brand, or new software. Of buyers creating short lists, 78% reported selecting products they had heard of before even starting the research process. That number was even higher for enterprise buyers, at 86%.

To listen to the entire discussion, check out our Revenue Leaders Tell All recording.

So, how can your brand stand out when bigger names dominate the market? Here are some proven strategies to help you compete and thrive.

1. Understand your market and focus on your niche.

As a challenger brand, the key to success is understanding your market and honing in on a niche where you can excel. Instead of trying to be everything to everyone, focus on what you do best and the specific problems you can solve for customers. This is where ideal customer profile (ICP) work comes in, and it’s mission critical. Think about who is most likely to buy your product and why—start there and smart small. Once you gain traction and start to find product market fit, you can expand your ICP.  

John Eitel, Chief Sales Officer at Demandbase, captured this sentiment perfectly: “The world is in such a changing state that I think actually challengers and disruptors can stand out more … some of these older, bigger brands have a legacy debt challenge that they’re going to have to work through.”

This means challenger brands can leverage their agility and innovative solutions to carve out a competitive advantage, especially when larger brands are bogged down by legacy systems or outdated approaches. You don’t need to compete on scale, you can compete on specialization and relevance. By zeroing in on underserved segments or solving specific pain points, you create a unique value proposition that resonates with buyers.

2. Build strong and strategic customer relationships and advocacy.

One of the most powerful tools smaller brands have is the ability to foster deep, meaningful relationships with customers. Personal connections can turn early customers into brand advocates who help spread the word and build your reputation organically.

Cuyler Owen, Chief Revenue Officer at TrustRadius, emphasized the importance of being selective in customer relationships: “If you are a challenger brand, your message matters a lot. … Invest more time and energy with your most important customers; bring them close because they will carry you on.”

This approach is about cultivating long-term relationships and building advocacy. When customers feel like they’re not just buying a product, but joining a movement or vision, they’re more likely to champion your brand within their own networks. This kind of organic word-of-mouth can be a powerful driver of growth, especially when competing against brands with larger marketing budgets.

Similarly, in our Demand Generation Leaders Tell All panel, Candace Gregg, Senior Director of Demand Generation, Americas, at Bloomreach mentioned that when she was planning to drop a software from their tech stack because of lack of use, the software brought them into the fold, involved them in their road-map building, and turned things around just by cultivating that customer relationship. They are now in year three or four with the software and use it as a main part of their tech stack.

In the early stages of growing your brand, not all customer relationships will be equally valuable. It’s important to be selective about where you invest your time and resources. Focus on strategic partnerships with customers who share your vision and can help amplify your message.

Cuyler highlighted this strategy: “Be really picky about who you’re going to invest your time in … you’re building a brand advocate who is going to carry your message to multiple companies in multiple places.”

By treating your early customers as partners rather than just clients, you create strong advocates for your brand. These customers will not only help you refine your product or service, but will also become vocal supporters who can help introduce you to new opportunities, whether through referrals or speaking on your behalf at industry events.

3. Differentiate through innovation and agility.

In a market where big brands often dominate through sheer size, smaller companies can stand out by being more agile and innovative. You’re not tied down by bureaucratic processes or slow decision-making, allowing you to respond to customer needs faster and more creatively.

As John noted, “I think very similarly when these shifts happen, born in the internet and cloud kind of movements … that really busted up the IBM advantage.” He goes on to say that a similar disruption is happening now, with smaller brands using AI and other technologies to level the playing field.

By staying on top of new technologies like AI, you can deliver more personalized, efficient customer experiences—something larger brands may struggle to implement quickly. Lily Youn Jaroszewski, Head of Growth at Gradient Works, echoed this sentiment: “I’ve personally already started this journey, really diving into generative AI to help my sales organization. I think there’s a lot of concern that came up, especially around, ‘is this going to take SDRs jobs away’ and whatnot? But I really think of it as, how do we actually help our teams become more efficient or support them in areas where they’re not the strongest—each person has their own skill set.”

Incorporating cutting-edge technologies allows you to offer something different—whether that’s faster service, better personalization, or innovative solutions—to solve your customers’ problems.

4. Overcome brand bias by emphasizing value and trust.

There’s a common saying in sales: “Nobody ever got fired for choosing IBM.” It reflects the reality that buyers often default to big, established brands because they feel it’s a safer choice. To overcome this bias, smaller brands need to emphasize their commitment to customer success, reliability, and personalized support.

Cuyler captured this perfectly: “You have to let somebody know that you, as a partner, are as invested in them as just a software company.” Challenger brands can’t rely on name recognition; instead, you must build trust by showing that you genuinely care about your customers’ success.

Lily echoed this approach, explaining how her team focuses on creating consultative relationships: “We try to really solution in a consultative way … providing a lot of great customer experiences for our clients.” When you take the time to understand a buyer’s broader challenges and offer tailored solutions, you can demonstrate value that goes beyond the product itself.

5. Leverage reviews and testimonials to build trust.

Positive customer reviews and testimonials can be a powerful way to build credibility and trust—especially when you’re competing against larger, well-known brands. When buyers see real-world examples of how your product or service helped others, they’re more likely to give you a chance.

As Lily shared, “A lot of times our clients will write a review about us and mention, ‘We decided to go with Gradient Works after using X, Y, and Z.’” These testimonials not only highlight your success, but also serve as a comparison to the bigger players in the market, showing how you can outperform even well-established competitors.

Encourage your satisfied customers to share their stories and leverage these testimonials across your marketing channels to build trust with prospective buyers. After all, user reviews are a top-three resource used by buyers to make a technology decision, according to thousands of buyers in our 2024 B2B Buying Disconnect Report.

6. Don’t compete on resources—compete on creativity.

Challenger brands rarely have the same resources as industry giants, but they often have something even more valuable: the ability to innovate, move quickly, and take risks that larger companies can’t. This agility allows you to experiment with new ideas and pivot in response to customer feedback, giving you a competitive edge.

John pointed out that smaller brands can actually thrive during times of market disruption. Use this time to think creatively and experiment with new approaches that can make a lasting impact.

In a marketplace dominated by big names and familiar brands, being a challenger can feel like an uphill battle—but it doesn’t have to be. By focusing on your unique strengths, building strong customer relationships, embracing innovation, and leveraging strategic partnerships, you can carve out a space for your brand and thrive.

As John said, “Don’t be scared. Use this as a badge of honor and make it your way to change the dynamic.”

Now is the time for challenger brands to rise, offering buyers fresh perspectives, personalized experiences, and innovative solutions that the bigger players can’t match. With the right strategies, you can not only compete—but win.