Challenger Conversations: The Extraordinary Cost of Dull
In this episode of Challenger Conversations, our partner Hugh Derrick and strategy director Toby Brown go deep on The Extraordinary Cost of Dull: a growing body of evidence that proves what we’ve long believed, dull communications costs real money, and dull communication starts with dull strategy. They explore why people sleepwalk into being dull, why incumbents set the conventions that others should break, why some brands - despite the evidence - might choose to be dull, and why it’s ever-harder to be interesting in today’s world. And they reflect on why challengers are the best people to learn from.
Toby Brown
So Hugh, just from a personal perspective, why are you excited about the cost of dull? Are there frustrations that you think it's going to address?
Hugh Derrick
It's a great question. So I remember, why I took this job, really. I took this job because when I read Adam's book, it laid out a kind of way of thinking about brands that I found naturally and intuitively exciting. And over the years, we've done quite a lot of qualitative research and interviews with people to prove a different way of thinking. And I think we've done a good job on that. But the reason I'm really excited by the cost of dull is, and frustrated. I'll come on to the frustration. I'm really excited by it, is because there's a huge amount of quantitative data now that shows the effect of dull thinking. Candidly, dull strategy leads to dull outputs. And the data shows how much of that is there. So I'm excited, because all of the stuff that we've qualitatively talked about, that we talk about when we work with clients, we're now being able to add reams of data and evidence to and we're bringing it right through the funnel. Showing the impact of, candidly, if you don't think like a challenger, if you don't think in an interesting way, then you'll produce dull communication. So I'm really excited by that, and I'm also incredibly frustrated to see just the scale of dullness that's out there. Funnily enough, I feel like we see that sometimes, when we go and start projects with clients. I'm amazed, you expect to walk in and see many more businesses that are intuitively exciting and interesting, but the number who are mis-, well, under-representing how interesting they could be is really frustrating, and it's also exciting for us when we get to work on a project. But the System1 data, the work that Peter's done, the work that I'm sure we will reveal over the course of this year, will show just the scale of people willing to do dull and I find that frustrating, but also it means, I'm still prepared to go into bat with a new client, because there's huge opportunity that's revealed by that.
Toby Brown
100%. So I come from a creative background. So, I don't come from a sort of classic agency pathway into this role. And the reason I first got really excited about eating the big fish, was it seemed to very closely mirror what I understood to be kind of the golden rules for creative thinking. I think that just got me incredibly excited. It's what led me to want to become a strategist. I think the frustration has been, in spite of all that really good thinking, that sort of playbook for how to be less like an incumbent, sort of less mirroring the status quo, and, in fact, more creative and inventive, is that there's so much dullness out there. So what I think is fascinating about this, is it's holding a mirror up to dullness, and it's beginning to codify what dull looks like, the dimensions of dull. I think once you have done that, that's then a huge opportunity to go back and go, 'Well, what is causing us to end up being dull, and how can we do something about it?'
Hugh Derrick
What lessons do you think our clients can take from the latest cost of dull work?
Toby Brown
I think the first one and most obvious one, is that being dull comes at a very real cost. So the data is still fresh. We are still working with partners on developing it, but it feels at this early stage still very robust. So at the very least, being dull will cost you twice as much as being interesting. Or to frame that in a more conventional way, being interesting will give you twice the bang for your buck. I think that's the first rule. I think the second one is that this isn't us admonishing anyone, telling them they've been getting it wrong. I think what's really exciting about this is dullness is everywhere. It seeps into every category. So, actually being more interesting is a huge untapped opportunity and a real competitive advantage for a brand or business that can break free of the status quo of their category and be more interesting. And I think the third thing is that, although the manifestations of dull are absolutely downstream, and the framework that we're developing has huge implications for executionally being more interesting in that downstream end of the spectrum, I think actually what we've discovered working with clients, is all of those downstream effects are predicted on upstream foundations defined by brand leaders and by the team responsible for the strategy of a business. So, I think we've seen a real excitement around the cost of dull. It's incredibly refreshing, really invigorating. We've also had some really interesting questions and challenges and pushback. I think. So, can you talk about any that you've heard?
Hugh Derrick
Yeah, I mean, I think I was surprised, because when you see the cost of dull evidence, it's so compelling. But one of the points that Adam and Peter make in it is, you can choose to be dull and just spend more. I think challengers, we hope, would actually choose to be interesting and have twice the effect. But they pose this question about, do you want to choose to be dull? And we have encountered clients, particularly market leaders, who see that the default position of incumbency and the fact that they've got quite deep pockets, they don't seem that prepared to change or to challenge their own ways of thinking. So I found that quite fascinating, which is, you'd have thought everybody wanted to be more interesting, but actually, some people are just choosing to spend more and maintain their incumbent position.
Toby Brown
It's fascinating, because I think when we talk about challenge and incumbent, an obvious misconception to make would be that we imagine incumbency to be entirely a negative thing. There is no good reason to ever be an incumbent in any aspects of your business. But of course, that isn't true, is it?
Hugh Derrick
No, it's certainly not true. I mean, unfortunately, there are many more challengers in the world than there are market leader incumbents, but the benefits of market leadership and incumbent market leadership are well documented. And they are the default benefits. Every dollar you spend in that position is more efficient. You have more awareness, you're more familiar, you have more top of mind salience. All of these things are playing in your benefit. So that sense of it being necessarily negative, I think is misplaced. I think all it highlights is that if you want to knock them off their perch, you really have to think differently and work harder, and that starts right upstream. The cost of dull work shows the dangers of not thinking differently upstream. You get dull downstream work. But yeah, incumbency is a good place to be, actually, if you get there.
Toby Brown
So you've talked about being more interesting as a choice. I'd be interested to get your perspective from your experience working with clients on what might be the drivers of that choice? What are the factors, the criteria, that would lead one as a brand, as brand leader, to think, I might have to be more interesting, or I might have the opportunity to be less interesting here?
Hugh Derrick
I don't often think that clients set out to be dull. I think there are very few circumstances in which people deliberately do that. I think it's different. I think, we talk about challengers being in opposition to the notion of incumbency. And I think incumbency is sort of invisible, really. It creeps up on you. So, if you're a market leader, or you represent the tropes of the category, those become established over time. And there's a body of marketing science that would say reinforcing those tropes is fantastic for you. You're reestablishing all the things that, essentially, people recognise and are familiar with. You double down. You think about Coca Cola, for example. You know the redness of Coca Cola, the recognizability of that, the familiarity of it, the Christmas ad that they run every year. There's a benefit to reinforcing those incumbent tools that benefit those players. So, I don't think they consciously go on thinking, well, that's not interesting. But I think, when you see it in terms of the volume of people who get lulled into going, 'Well, it worked for Coke. So we should do what they do.' Or 'These are the codes of a soda category, and we should follow those.' You and I have been in many client meetings talking about, the importance of refreshment in the beer category. You can't really walk away from refreshment, but you must recognise that everybody's playing in refreshment. If you want to be the one that is interesting in that category, simply talking about refreshment won't be enough. So, I don't think people set out to be dull. I think it creeps up on them over time. And for some players, it's actually a benefit, because you're reinforcing things that are familiar. But for anybody who wants to punch above their weight, for anybody who wants to break the status quo, it's not an option.
Toby Brown
So there is essentially a context in which for some brands, for many brands perhaps, there is a competitive advantage to not thinking like the incumbent, deliberately pushing against that, pursuing a different path.
Hugh Derrick
Well, I think years ago, when we first started thinking about challenger thinking, we talked about the idea that, being number two in fast food in North America and following the playbook of McDonald's, you're probably going to have a huge business. There's very little risk in probably doing something very similar to them. But being number five in margarine in Belgium and doing the same as the market leader, don't ever expect to have a hugely successful business. So, I think there is a sense of understanding your market positioning, your ambitions. Most of the challengers that we studied, they have ambitions bigger than their resources. They recognise, they've got to do something to progress the category, and change the criteria of choice in their favour, and following the path of the incumbent is really not helpful. But I do think, it's not simply about market size. We've often said challenger isn't about market position alone. For us, as you know, Nike is still a challenger for us. AirBnB is still a challenger for us. So, I think the very best examples understand that they can be consistent, yet surprising. They can use their scale to act like a challenger and stretch their lead even further. But I do think, brands that rest on their laurels, people who think they've established the category and can't move the narrative forward, that's dangerous territory.
Toby Brown
That's interesting, and it's interesting when we look back, on how the world might have been 10 or 15 or even 20 years ago. Do you think, with the benefits of your long experience, do you think that the context has changed? I wonder if, obviously implicit in there, whether it's become more volatile, and whether, in fact, once upon a time, being number two or even maybe number three, and still acting like the incumbent might have been a safer strategy than perhaps it is now, with a lower bar to entry, a much faster pace of culture. Do you think, maybe the context for whether it's safe to be dull, and whether it's a risky thing to do, to try and be interesting, and whether that, perhaps, that relationship has changed, somewhat?
Hugh Derrick
Well, I think there's so much in that. And I mean, as you said, there are fewer barriers to entry for brands to launch, and come into the public consciousness. There's much greater awareness and desire for people to try and be distinctive. So I think one of the things that you could observe, is that the number of players in any one category who have now contributed to the sea of sameness has grown. Many more competitors, more people, contributing to that sea of sameness. So I think that it's a sea change over 20 years. You've then got the impacts of things like the algorithm and AI that reinforce these things. You've got the fragmentation of media that means that it's harder for people to break through and actually be salient, because there's so many different ways to try and drive awareness. So I think it's in that era of complexity, one is driven to thinking, well, there must be a whole set of new rules. I don't think the rules have really changed. I think you still need the very basic principles. You still need to be compellingly different. You still need to be distinctive. You still need to drive salience and awareness, and you need people to be emotionally engaged with your brands. So, those are truisms of great marketing, even beyond whether we think they are right for challengers. But I've been studying challengers for a long time, and we see them as the poster children for doing that at their best. So, I think it's got more complicated, and a greater proliferation, but I don't think that really changes the fundamentals. It's just we're able to bring to life now, some of the evidence that says, actually we're wasting our money doing it the way that we're doing it at the moment.