REPORT FOR THE B2B INSTITUTE – JENNI ROMANIUK, JOHN DAWES AND SAHAR FAGHIDNO – MAY 2021
Double Jeopardy is one of the fundamental Laws of (brand) Growth. It speaks to the relationship between market share gain/loss and market penetration (the number of category buyers that buy the brand) and loyalty (behaviours such as purchase frequency, share of wallet or number of product holdings). Double Jeopardy tells us that loyalty is largely a predictable function of market share. It shows that it is normal for smaller share brands to suffer twice – to have fewer users, who are also less loyal – when compared to their larger share competitors.
Very simply this law tells us one big strategic insight: it is not possible to sustainably grow by focusing on loyalty alone. A firm with more market share will have many more buyers who are slightly more loyal. So if we want to be big, we need to get more customers in any time period. But Double Jeopardy does more than that, in giving the path to growth strategic clarity, it helps pinpoint tactics that can help or hinder growth.
In this Ehrenberg-Bass Institute report we provide evidence of Double Jeopardy in a wide range of B2B categories across different countries, category types, and loyalty metrics. We give you simple methods to test for Double Jeopardy in your own category. Then we highlight what this means for B2B marketers – what to do more of, and what to stop worrying about/wasting time on.
Double Jeopardy law holds, this means:
- There is one strategy to grow in B2B – primarily from new customer acquisition, expanding the size of your customer base
- Loyalty metrics can be easily predicted, which helps in KPI setting
- Deviations from the law can be easily identified, and can be investigated to identify barriers to growth
This highlights the importance of building mental and physical availability, to make it easier for non-customers to think of your company, and then find and buy you. Rather than obsessing about loyalty, paying attention to removing barriers to getting more customers can be the fastest way to growth.