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Don Berryman Feb 9th, 2021

What Is A Champion Challenger Strategy And How Can It Improve Your Business?


If you studied statistics then you will certainly know about A/B testing. This is where you carry out a series of experiments, or trials, and each time you just adjust one single factor. By only allowing a single variable to change, you can determine which can be used as levers to change the outcome.

 

Marketing professionals often use this type of experimentation, seeing how customers react to an ad and then changing one element to see if it works better - or not. A Champion Challenger strategy is very similar. It allows you to examine a group of decisions and to determine which ones are leading to better outcomes.

 

The financial service company Experian uses a Champion Challenger approach to help them improve their collections strategy. Experian takes a sample of their collections portfolio and experiments with the process, in parallel with the usual processes continuing on the rest of the portfolio. Several of these challenger experiments can take place simultaneously to test different ideas.

 

It is worth remembering that you should always assess your current strategy before undertaking any form of strategy experiments. You may have some very simple changes that can be quickly applied, allowing for immediate improvement. Once you are comfortable that the basic strategy has no obvious flaws then think about how to design a test plan - the rules of the challenger.

 

Your test plan will require well-defined goals, objectives, a proposed strategy, the proposed sample size, the approach to executing the test, and your success criteria. Once you have defined a plan, and your overall objectives, you can then run various “what if” scenarios on the sample - rather than affecting day-to-day operations.

 

If you determine that one of your samples has better performance than the rest of your business processes then you can promote this challenger to become the champion - the adopted strategy for your entire business. It is worth considering any operational constraints that may exist when you want to scale up - is there anything that would prevent this new strategy working when scaled up to the entire business?

 

Why is a champion challenger strategy so useful when designing a great customer experience (CX)? There are interactions between customers and brands on many channels and for many different reasons. A Champion Challenger approach allows you to think logically - and prove - which strategy works best.

 

For example, if you are trying to prevent churn then you might use an analytical algorithm to determine which customers are possibly thinking of cancelling their subscription to your service. How do you retain these clients? Every manager will be able to offer ideas such as creating a discount, locking the customer to your service in exchange for a special deal, or offering a free upgrade, but you can use a Champion Challenger approach to systematically contrast your present strategy to 3-4 alternative ideas - the challengers.

 

Any manager making operational decisions needs to reduce guesswork and gambles. A Champion Challenger strategy reduces risk, by allowing ideas to be tested on a smaller group of customers, and provides hard evidence and data that can feed into improved decision-making.

 

I’d recommend this approach to any manager. When you want to consider making strategic changes that will affect all of your customers it’s not good enough to just rely on instinct. Try this approach and create the data that can support your decisions.

 

I have been designing these experiments and helping customers to improve their CX strategy for many years so please feel free to reach out if you have any questions about how a Champion Challenger strategy works. In fact, if you haven’t done so, schedule a demo of our Champion Challenger Calculator 

 

Champion Challenger Strategies Defined

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