A common goal for many CPG brands is to build a loyal customer base. The thinking is that if you can get your best customers to buy from you more often, your brand will grow. It seems logical, right?
But what if that’s not the most effective strategy? What if the key to growing a brand – whether you’re just starting out or a category leader – is not about getting your best customers to buy more but about getting more customers, period?
This idea is a core principle of marketing known as Double Jeopardy.
The concept of Double Jeopardy comes from extensive research in marketing, notably by authors and academics like Byron Sharp and Jenni Romaniuk, who detailed it in the book How Brands Grow. It’s not a theory but a consistent pattern observed in consumer behavior across a wide range of CPG categories, from food and beverages to personal care products.
It can be broken down into two main points:
- Brands with lower market penetration also have lower loyalty. These brands have fewer customers, and those customers also buy the brand less frequently.
- Brands with higher market penetration also have higher loyalty. These larger brands have more customers, and those customers also buy the brand more frequently.
In other words, the more households that buy a brand (market penetration), the more loyal those households are likely to be (purchase frequency). As a brand’s penetration goes up, its loyalty, or purchase frequency among its customers, also increases.
The term “Double Jeopardy” highlights the fact that smaller brands face a double challenge: they have fewer buyers, and those buyers are also less frequent purchasers. The research shows that loyalty is a result of market penetration, not the other way around. The reason big brands have more loyal customers is simply because they have more customers overall.
Understanding Double Jeopardy can completely shift how you think about growth strategy.
For Smaller Brands: Focus on Growing Your Customer Base
It’s tempting to double down on loyalty – exclusive discounts, insider clubs, special offers for superfans. However, based on the Double Jeopardy principle, this isn’t the most efficient use of resources.
Say you have 1,000 customers. You could spend your marketing budget on a loyalty program to get each one of those customers to buy one extra time this year. Or, alternatively, you could use that budget to acquire 100 new customers.
Which drives more growth? According to Double Jeopardy, adding new customers wins every time. As penetration increases, loyalty naturally rises alongside it.
The focus isn’t to get your 1,000 customers to buy endlessly. It’s to get that 1,001st, 1,002nd, and 1,003rd customer.
For Leading Brands: Keep Driving Trial
Even the biggest brands rely heavily on “light buyers” – shoppers who only buy once or twice a year. In fact, for most brands, even the biggest ones, the majority of sales come from this group. The most loyal customers, who buy a product every week, make up a small fraction of total sales.
That means leaders can’t rest on loyalty alone. Growth still depends on capturing new customers and turning light buyers into more frequent ones.
So, how do you actually increase penetration? It comes down to two things: physical availability and mental availability.
Physical availability is about making your product easy to find and buy. This means having wider distribution: at the right retailers for your brand; being on more shelves, ideally multiple placements within these stores; and being available online, both via ecomm and Amazon.
Mental availability is making your brand memorable. This comes from consistent marketing, distinctive brand assets (colors, packaging, slogans), and being present across the channels where your shoppers spend time.
And above all, get people to try your product. Trial is the gateway to penetration. For CPG, nothing beats firsthand experience.
That’s why tactics like digital sampling and promotions matter so much. They break down the barrier to first purchase and bring new customers into the fold.
At Social Nature, we see this in action every day. Whether it’s a small emerging brand or a category leader, the objective is the same: put products in the hands of new, high-intent shoppers looking for better-for-you options. In fact, on average 79% of campaign participants are new to brand.
When brands focus on driving trial and expanding their customer base, they set off a growth cycle. More customers lead to greater visibility, which leads to higher loyalty over time. That’s the Double Jeopardy effect at work.
