The reason brands grow, according to the Ehrenberg-Bass Institute, effectively boils down to two options: penetration or loyalty – more new customers or existing customers buying more. Over the long-term it’s always about new customers.

Why it matters

It’s not just an Ehrenberg-Bass theory: evidence from a multinational with multiple brands shows that, even when brand managers thought they were planning to grow by loyalty they grew more by penetration, and only a little bit by loyalty.

“Some of those marketers that planned to grow by loyalty accidentally stumbled across something that got them more customers,” says the Institute’s Jenni...