One of the most consistent findings in marketing science is that brand growth comes primarily from acquiring new and light buyers, not from increasing loyalty among existing customers. This finding has been replicated across categories, countries, and decades of research.
The Double Jeopardy Law
Smaller brands suffer doubly. They have fewer buyers, and those buyers are slightly less loyal. Larger brands benefit doubly. They have more buyers, and those buyers are slightly more loyal. This is not because larger brands have better loyalty programs. It is a mathematical property of how markets work.
The implication is counterintuitive: trying to increase loyalty among your existing customers will not close the gap with larger competitors. The only path to growth is acquiring more customers, which automatically brings slightly higher loyalty as a side effect.
What the Research Shows
Byron Sharp and the Ehrenberg-Bass Institute have documented these patterns across hundreds of brands and dozens of categories. The findings are remarkably consistent:
- Brands grow primarily by increasing penetration, not loyalty
- Loyalty metrics are largely a function of market share
- Light buyers, not heavy buyers, drive brand growth
- Most brand buyers are light buyers who buy the brand occasionally
- Loyalty programs rarely deliver the growth they promise
Implications for Operators
If growth comes from penetration, then the marketing task changes fundamentally. Instead of focusing on your best customers, you should focus on reaching and converting people who are not currently buying from you, or who buy from you rarely.
This connects directly to mental availability. To acquire more buyers, you need to be the brand that comes to mind in more buying situations. You need broader reach, not deeper engagement with a narrow base.
It also explains why demand capture is so important. The buyers you need to acquire are already in the market, already searching, already considering options. The question is whether you are present when they look.
The Loyalty Trap
None of this means customer experience does not matter. Terrible service will erode your customer base. But the idea that you can loyalty your way to growth, that focusing on existing customers will drive sustainable business growth, is not supported by the evidence.
Understanding why loyalty is misunderstood is essential for making sound marketing investments. The budget you spend trying to increase loyalty would often be better spent on reaching light and non-buyers.