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Smallvs.LargeBrands:
HowtoBecomea
MarketLeader
Marketingrequirescreativity
andthoughtfulness,butitalso
requirescertainstandards.
Insystemizingthesestandards,
marketerscanachieve

greatercreativityandfurther
reach,whilecraftingmore
impactfulmarketing.
Youcan’tachievethis
systemizationwithout
understandingthe
sciencebehindmarketing.
Check out our blog post here.
We’llusedatatoexplainwhatit
takestogrowyourbrand.
Let’sbegin.
BRAND SIZE
Whatmakessmallbrandssmall,
andlargebrandslarge?
the size of a brand’s buyer market
CUSTOMER LOYALTY MARKET PENETRATION
Theanswerliesin:
the average purchase rate per customer
“Largerbrandshaveslightlyhigher
customerloyaltyandmuchgreater
penetrationthandosmallerones.”
— Byron Sharp, How Brands Grow
Sosmallerbrandshavefar
fewerbuyerswhoareless
loyal,helpingexplaintheir
smallersize.
SMALL BRANDS LARGE BRANDS
LOYALTY slightly lower slightly higher
PENETRATION much lower much higher
The“DoubleJeopardy”Law
Thisphenomenonisknownas
the“doublejeopardy”law.
Let’sseewhatthedouble
jeopardylawlookslikein
action,usingthe2005UK
shampoomarket.
4%
8%
12%
16%
Brands
Head & Shoulders Pantene Herbal Essences L'Oreal Elvive Dove Sunsilk Vosene
Market share Annual market penetration Purchase frequency (average)
TheImpactofthe“DoubleJeopardy”Law
Shampoo Market, UK 2005
Source: TNS.
Thegraphtellsustwomajorthings
1. Loyalty doesn’t vary dramatically between brands
But it is higher for those with greater market share.
2. Annual market penetration varies with market share
Larger brands have far larger penetration than smaller ones.
CUSTOMER LOYALTY
Let’stakeacloserlookat
customerloyalty.
Arecustomersmoreloyaltosome
brandsoverothers?
Yesandno.
Customersdoadoptacertain
levelofloyaltybehaviorinthat
theydon’tswitchbetweenall
brandsavailable.
Butsomedegreeofbrand
switchingwillalways
occuracrossallkindsof
marketcategories,
consumers,andbrands.
Analyticaltime
framematters
Consumer loyalty also
starts to look different when
assessed over a shorter
time frame versus a longer-
term one.
Marketerstendtofocuson
short-termengagement
metrics,ratherthanlonger-
termones.
Thishasimportantimplications
forcustomerloyalty.
CustomerLoyaltyOverTime
Weekly Analytics Yearly Analytics
#oftimespurchased
1
2
3
4
5
Tide All Gain Arm & Hammer #oftimespurchased
1
2
3
4
5
Tide All Gain Arm & Hammer
Thegraphtellsustwomajorthings
1. A one-week time frame will show little customer disloyalty
Customers usually don’t have the time or need to buy multiple brands in just one week.
2. A year-long time frame will show far greater disloyalty.
Customers have the time and need to buy a product multiple times, making it very likely
they bought from a couple different brands.
“Sohowloyalacustomerappearsis
largelyananalyticalmisattribution,
unrelatedto‘true’loyalty.”
— Byron Sharp, How Brands Grow
THE WRAP-UP
Whathavewelearned?
1. Smaller brands have far fewer buyers who are less loyal
Brand growth lies in increasing market penetration, or buyer market
Whathavewelearned?
1. Smaller brands have far fewer buyers who are less loyal
Brand growth lies in increasing market penetration, or buyer market
2. Customer loyalty is largely out of your control: it will always occur
Most loyalty measures are skewed by the time frame, resulting in
analytical misattributions
Youcanreadthefullstoryonhowtogrow
yourbrandonthePercolateblog:
Small vs. Large Brands: How to Become
a Market Leader
Percolate is The System of Record for Marketing. 

Our technology helps the world's largest and fastest-growing
brands at every step of the marketing process.
Want to learn more?
Contact learn@percolate.com for more information
or request a demo today at percolate.com/request-demo
Kat Gebert
Kat Gebert is on the Product Marketing team
at Percolate.

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