The Law of Double Jeopardy
Brands with smaller market share suffer twice: they have far fewer buyers, and those buyers purchase slightly less often and are slightly less loyal.
Trying to grow a brand primarily by increasing loyalty or repeat purchase frequency amongst existing customers.
Analysing decades of panel data across dozens of consumer categories and countries, Ehrenberg-Bass demonstrated that loyalty varies very little between competing brands of similar size, whereas penetration (total number of buyers) varies massively.
- Prioritise customer acquisition and broad reach over narrow loyalty schemes.
- Focus media budgets on reaching light and non-buyers of your brand within the category.
- Measure market penetration as your primary brand health KPI.