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It’s a simple rule with huge implications: small brands don’t just suffer from having fewer customers, those customers are also less loyal.

This idea originated with Andrew Ehrenberg (a statistician and marketing scientist) in the 1960s–70s. Later, Byron Sharp and the gang at the Ehrenberg-Bass Institute built on this work. Sharp popularised it through How Brands Grow, showing that this Double Jeopardy rule holds true across categories, countries, and decades of data.

Frankly, it’s an absolute head-scratcher to get your noggin around. But unfortunately… it is true. And we all need a reminder of it sometimes.

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Now, for some reason, Elon is feeding me a lot of tweets from people who seem to all be building B2B SaaS. They are utterly, utterly focused on monthly recurring revenue (MRR).

But, in some ways, monthly recurring revenue is a loyalty metric — how many people pay for your service every month. And Double Jeopardy shows us that if you are a small brand, you should expect to see little loyalty with your product.

I bet this is your experience with marketing: you keep pumping money into Meta, chasing MRR, but it feels like you’re wringing the same few customers dry while growth stubbornly stalls. The harder you optimise, the smaller the returns. Because without building penetration and brand, Double Jeopardy keeps you trapped in a cycle of frustration.

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Escaping Double Jeopardy

The answer is not more optimisation.
The answer is not over-segmentation (“let’s own this tiny niche, over-deliver, and they’ll be loyal forever”).

The answer, for marketing at least, is clearly laid out in How Brands Grow. (Which, if you are a start-up struggling with marketing, you should probably read.)

Here’s what you’ve gotta do:

1. Grow penetration: focus on more people buying you, rather than the same people either buying more, or continuing to buy. (Even your biggest fans at this stage will still buy from competitors.)
2. Build mental availability: make sure people think of you in buying situations.
3. Build physical availability: make sure people can find your product easily — distribution, accessibility, ease of buying.

As penetration grows, loyalty will naturally start wriggling upwards.