Double Jeopardy

The empirical regularity that brands with smaller market share have both fewer buyers and slightly lower loyalty among the buyers they have.

Coined by William McPhee (1963); generalised to brands by Andrew Ehrenberg (1969)

What it does

Small brands are punished twice: fewer buyers, and those buyers are also less loyal. The practical consequence is blunt — most loyalty spending is treating a penetration problem with the wrong instrument.

When it breaks

Weakens where switching is contractually locked (telco, insurance) and in heavy B2B where the buyer universe is structurally small.

Case

Habel and Lockshin replicated Double Jeopardy across 37 cross-sectional categories plus a 40-quarter panel of physicians' prescribing. It held — but as an upward-sloping curve rather than a straight line, with NBD-Dirichlet fitting better than linear or exponential models.

Habel & Lockshin — extensive replication ↗

Diagram — not yet drawn

Scatter of brands, penetration on x and loyalty on y, with the curve drawn through them and one over-performing brand circled as the exception worth investigating.

In the wild

Unvetted · not part of the tier assessment

What has been written about this tool in the last twelve months. Machine-retrieved and unchecked — everything above this line was checked.

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