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Five cross-category themes we found in the latest Liquid x Avasta Challenger Index

The latest installment of the Liquid Agency x Avasta Challenger Index is out (and can be downloaded here). While our insights varied by category, the following five themes stood out as transcendent across all of them—and challengers in every B2B product market should be aware of them.

Theme 1: Evolving markets, revolutionary metrics

For years, one of the best indicators of success for B2B products was a brand’s potential for reach. Whether assessed through total addressable market (TAM) or another similar measure, the thing to look for was how much association could be amassed quickly and ideally retained.
Our studies indicate that this is no longer the case. Experts have long speculated that TAM is dead, and our research substantiates that claim by showing how even industry titans with maximum TAM are failing to adapt to ever-changing market conditions. Conversely, the best-positioned challengers today are building strong brand perception and making a beeline to profitability.

Theme 2: Brand momentum emerges as a key indicator

The elephants in the rooms (or categories) are incumbents at the top, whose historical dominance within their respective industries makes it harder for challengers to emerge. But these titans’ stranglehold on their niches is exactly the spark challengers need to redefine what the category is all about, leading with innovation and meeting unmet or marginal markets.
One pivotal finding in this vein is how buyer preferences can impact future success for both incumbents and challengers. Buyers increasingly prefer vendor consolidation. On one hand, this figures to be a benefit for incumbents with well-established platforms. But, on the other hand, it provides a unique difficulty for challengers who need to find balance between innovation, ecosystem compatibility and market responsiveness.

In that context, the report shows that brand momentum is emerging as a crucial metric, predicting future category leadership or potential decline. This new measure highlights the importance of a brand’s trajectory, providing insights into future market positioning and value.  

Theme 3: Encroachment and the need for innovation

Increasingly, challengers need to worry about other verticals. The gravity of cross-industry giants such as IBM or Google facilitates crossover from a niche they’re thoroughly enshrined in (i.e., B2B AI) into another niche, whether directly related (like business intelligence) or not (like database management).

What this means for challengers in every vertical is that they need to innovate even harder to fend off threats both from within and without. Any well-established B2B product incumbent in any category has the potential to leap into a leadership position within a challenger’s own category. The contenders best equipped to fight off these Goliaths are those with strong brand perception.

Theme 4: Convergence in and between industries

Closely related to encroachment is the potential for change and takeover within and across B2B product categories. This means that, internally, industries such as CRM are changing rapidly from more diversified in scope to more singularly focused—namely, uniformly AI-driven.

The best example of cross-industry convergence is what we’ve observed happening with business intelligence (BI) and B2B AI. In the near future, BI will almost certainly collapse or dissolve into B2B AI, meaning that more brands will compete for the same market. A similar thing is happening with marketing automation, which is increasingly integrated within CRM.

Theme 5: What “winning on product” means today

Closely related to the first theme above, the notion of what a B2B product is—and what it means to win on or because of it—is also rapidly evolving. Namely, our study found that product quality itself is not the only or best measure of success. Product exists in a dynamic symbiotic relationship with brand such that brand trust and recognition directly impact perceived quality.

Challengers looking to lead with and through product cannot ignore brand momentum. Prior studies have shown that external influences and emotional factors impact buying decisions, and brands need to take these factors seriously. They are ultimately constitutive of product success.

What every industry’s top challengers are getting right

The challengers of today that have a real shot at becoming the incumbents of tomorrow are those committed to brand perception. They’re creating strong brand trust and recognition by innovating, meeting unmet niches and changing the faces of their respective industries.

The landscape in B2B products is ever-changing, and new obstacles emerge every day. Brands that adapt to and with these changes give themselves the best chances at growth, profitability and success. Download the Liquid x Avasta Challenger Index: B2B Products 2023 to learn more.

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