In short: the double jeopardy law, formalised by Ehrenberg, Goodhardt and Barwise in 1990, says that brands with lower market share are punished twice. They have fewer buyers (lower penetration) and those buyers are also slightly less loyal (lower purchase frequency). The lower loyalty of small brands is a statistical regularity, not a flaw to fix with loyalty schemes (Ehrenberg-Bass). Loyalty is a consequence of penetration, so for a small brand the path to growth is acquiring new customers, not squeezing the few existing ones.
What is the double jeopardy law?
The double jeopardy law is one of the most solid regularities in scientific marketing. It describes a fact observed across hundreds of categories: small brands have fewer buyers and, on top of that, those buyers purchase a little less often and are a little less loyal than the buyers of large brands. Two disadvantages that stack, hence the name.
The term comes from Anglo-American law, where it means being tried twice for the same offence, and before that it was the name of an American game show. It is one of those borrowed labels that capture the phenomenon before even explaining it. The concept was formalised by Andrew Ehrenberg, Gerald Goodhardt and Patrick Barwise in a 1990 paper, but it has been replicated thousands of times since, and as the Ehrenberg-Bass Institute documents it holds in consumer markets and in B2B alike.
Why does loyalty depend on brand size?
The counterintuitive finding is that loyalty does not work as an independent lever. Largely it is a consequence of market share. Big brands look more loved not because they do anything special about loyalty, but simply because they are big, and small brands have lower loyalty metrics for the same structural reason.
The practical consequence overturns a lot of conventional wisdom. First penetration grows, meaning the number of customers, then loyalty rises a little as a side effect, and not the other way around. Investing heavily in retention to leap over double jeopardy, for a small brand, is swimming against the current, because loyalty differences between brands in the same category are small and largely already set by size. We say this often to clients who arrive convinced they have a loyalty problem: almost always they have a penetration problem in disguise.
Source: Ehrenberg, Goodhardt & Barwise (1990); Ehrenberg-Bass Institute.
What should a small brand do to grow?
If loyalty is an effect of size, the growth strategy becomes clear: increase penetration, meaning win new customers, especially the occasional ones. For a small brand the reservoir of growth is the category's non-buyers and light buyers, not the few loyalists to squeeze, and it is the same direction indicated by the analysis of penetration versus loyalty.
Acquiring new customers requires being seen and remembered by the whole category, not just the most affine segment, and this is where mental and physical availability and distinctive brand assets come in. The more people you reach, the more it matters to be instantly recognisable, because reach without recognisability produces wasted coverage, and colours, logo, slogan and characters are what turn that coverage into memory and memory into choice at the moment of purchase.
When does double jeopardy not hold?
There are known exceptions. Niche brands with a narrow but very dedicated base can show loyalty higher than their share would suggest, the so-called niche violation. At the opposite end, some brands have high penetration but lower loyalty than expected, the change-of-pace case. These are recognised and studied deviations, not refutations of the law, and they confirm that loyalty moves within a narrow band around what size predicts. For the vast majority of brands, planning growth around penetration remains the correct bet.
FAQ
Does the double jeopardy law make loyalty schemes useless?
It makes them impossible to use as a growth engine for a small brand. Loyalty differences between brands are small and tied to size, so betting everything on retention to grow goes against the law. Loyalty schemes can play other roles, like collecting data or improving service, but they do not overturn the double penalty.
Does it hold in B2B too?
Yes. The Ehrenberg-Bass Institute documents that the double jeopardy law holds across most B2B categories, with the same strategic implication: grow by acquisition, not by retention alone.
Who formulated the double jeopardy law?
The phenomenon was formalised by Ehrenberg, Goodhardt and Barwise in 1990, developing earlier observations. It has since been replicated in hundreds of peer-reviewed studies across different categories and countries.
If I have a small brand, should I ignore existing customers?
No, they should be served well. Growth, though, comes from widening the base, not from focusing only on the loyalists. Budget and communication priority go to acquiring new customers, with current customers retained without being chased at any cost.
Sources and references
- Ehrenberg-Bass Institute. What causes the Double Jeopardy law? Ehrenberg-Bass.
- Ehrenberg-Bass Institute. The Double Jeopardy Law in B2B shows the way to grow. Ehrenberg-Bass.
- Ehrenberg, A., Goodhardt, G. & Barwise, P. (1990). Double Jeopardy Revisited. Journal of Marketing.
