The loyalty myth that is costing your brand growth

Ask most marketing leaders what drives brand growth, and the majority will say loyalty. Build a passionate community of devoted customers, the logic goes, and the revenue will follow. It is a compelling idea. It is also, according to decades of empirical research from the Ehrenberg-Bass Institute at the University of South Australia, largely wrong.

The Institute’s landmark body of work, most accessibly distilled in Byron Sharp’s How Brands Grow, establishes something that feels counterintuitive at first but becomes increasingly obvious on reflection: brands grow primarily by acquiring new, light buyers – not by squeezing deeper loyalty from existing customers.

The brands that grow are not the ones with the most loyal customers. They are the ones most people can recall when the moment to buy arrives.

This is not a niche academic finding. It is one of the most robustly evidenced principles in marketing science, replicated across categories, geographies, and market conditions. And yet the strategy budgets of many organisations remain disproportionately allocated to retention, advocacy programmes, and loyalty mechanics – at the direct expense of the reach and recognition work that actually moves the needle.

At Bonfire®, we encounter this misalignment regularly. One of the most consistent findings when we assess a brand against our Extraordinary Brand Framework™ is that it is speaking in depth to the people who already buy it, whilst remaining virtually invisible to the much larger audience that does not. The opportunity cost is significant. The good news is that it is entirely addressable.

What the science actually tells us

The myth of the loyalist

The idea that a highly passionate niche of devoted customers is the engine of sustainable growth has intuitive appeal. Devoted customers buy more, refer friends, post on social media, and forgive the occasional slip. They feel like the ideal foundation for a brand.

The problem is the data. Across virtually every consumer category studied, most buyers are ‘polygamously loyal’ – they shop from a repertoire of brands rather than committing exclusively to one. A cola drinker buys Coca-Cola most often but also buys Pepsi. A streaming subscriber holds both Netflix and Amazon Prime. This is not disengagement or disloyalty. It is simply how people navigate category purchasing.

True exclusivity – buying one brand and only one brand in a category – is the exception rather than the rule.

Brands that build strategy around cultivating a narrower, more devoted following are, in effect, optimising for a consumer behaviour that the majority of their potential market will never exhibit.

The Law of Double Jeopardy

The Ehrenberg-Bass Institute describes a consistent pattern it calls the Law of Double Jeopardy. Smaller brands face a double disadvantage: they have fewer buyers than larger brands, and those buyers are marginally less loyal. It is a compounding effect that makes it difficult for a smaller brand to close the gap on a market leader.

Critically, the research shows that you cannot artificially engineer your way out of this position by boosting loyalty metrics. Loyalty is a consequence of market share, not a driver of it. If you want more loyal customers, the primary lever is penetration – growing the total number of people who buy from you at all. Loyalty follows naturally as your brand becomes more present in more people’s purchasing lives.

Loyalty is a consequence of market share, not the cause of it. Grow your buyer base, and loyalty grows with it.

Distinctiveness over differentiation

The conventional brand strategy framework places enormous weight on differentiation – finding the unique, ownable attribute that sets your brand apart from competitors. A sharply defined Unique Selling Proposition that consumers understand and value.

The Ehrenberg-Bass research challenges the primacy of this approach, not because differentiation is irrelevant, but because it relies on a level of cognitive engagement that most buyers simply do not bring to most purchasing decisions. Consumers do not perform careful feature-by-feature analysis before choosing a product. They reach for what comes to mind most readily and most positively.

This is where distinctiveness becomes the more actionable strategic priority. Distinctiveness is not about being meaningfully different in ways that require explanation – it is about being instantly recognisable and easily remembered. A consistent visual identity, an ownable colour, a distinctive voice, a memorable character or phrase: these are the assets that lodge in memory and surface at the moment of purchase.

The goal, the research suggests, is not to be the ‘best’ brand in the category. It is to be the most mentally available one.

Mental availability: the growth lever most brands underinvest in

Mental availability is the probability that a buyer thinks of your brand in a buying situation. It is shaped by the number and quality of memory structures your brand has built over time – the associations, cues, and distinctive assets that connect your brand to the moments when purchase decisions are made.

High mental availability does not come from brand love or emotional connection alone, though those are valuable. It comes from consistent, broad-reach communication that reinforces distinctive brand assets across a wide variety of contexts and buying situations. A brand that is consistently seen by many people, across many moments, builds the memory structures that make it easy to recall. A brand that communicates deeply and intensively to a small, committed audience does not.

This has direct implications for how brands allocate creative and media investment – a conversation the Bonfire® team has repeatedly with clients who are questioning whether their current mix is genuinely building reach or simply recycling existing audience engagement.

What this means in practice

The Ehrenberg-Bass findings are not an argument against loyalty programmes or retention activity. There is real value in keeping existing customers engaged and reducing churn. The point is one of balance and prioritisation.

Brands that grow do not do so by going deeper with the people who already love them. They grow by becoming more available – cognitively and physically – to the much larger pool of potential buyers who are currently buying from someone else, or not buying in the category at all.

In practice, this translates to a set of strategic questions that any brand leader would do well to interrogate honestly.

How broad is your current reach? If your communications are primarily reaching people who already buy from you, you are not building the mental availability that drives penetration growth.

How consistent and distinctive are your brand assets? The distinctive assets that drive mental availability – colour, logo, visual style, tone of voice – only work if they are applied consistently and recognisably over time. Frequent refreshes and campaign-by-campaign reinventions erode the memory structures you have built.

Where are you investing your creative effort? High-quality, emotionally resonant creative has a disproportionate effect on mental availability because it is more memorable. The evidence from System1, Binet and Field, and others consistently shows that emotionally led brand advertising builds the long-term memory structures that drive penetration – but only when it reaches enough people.

Are you measuring what matters? Many brands track loyalty metrics carefully but have limited visibility into mental availability. Measuring prompted and unprompted brand recall across a broad sample – not just among existing customers – gives a more honest picture of where a brand actually stands.

How Bonfire® approaches this challenge

These are precisely the questions our Extraordinary Brand Framework™ is designed to surface. The EBF™ is a 12-pillar brand diagnostic that examines the full health of a brand, from proposition and identity through to consistency, reach, and cultural relevance. It is built to give brand leaders an honest picture of where their brand is genuinely performing and where the gaps are.

The Extraordinary Brand Framework™ examines mental availability and distinctive asset strength as core pillars of brand health. But it goes further. Exospection® – Bonfire®’s 12th and final pillar – adds a dimension that the Ehrenberg-Bass research implicitly demands but rarely names: the brand’s responsibility to consider the human cost of how it seeks attention.

In a world where 73% of customers feel overwhelmed by the volume of content they encounter, the brands that build genuine, lasting mental availability are not the ones that shout loudest. They are the ones that earn attention by making their communications genuinely valuable – reducing cognitive noise rather than adding to it. Distinctiveness and Exospection® are not competing principles. They are complementary ones. A brand that is instantly recognisable and consistently respectful of its audience’s attention is a brand built for sustainable growth.

The Ehrenberg-Bass research reinforces something the Bonfire® team has observed across 25 years of client work: that extraordinary brand results come not from speaking more intensively to fewer people, but from being unmistakably, memorably present for the many. Distinctiveness is not a creative nice-to-have. It is a commercial imperative.

Extraordinary brand results come not from speaking more intensively to fewer people, but from being unmistakably, memorably present for the many.

The brands that win are the ones that are easy to buy. Easy to recall. Easy to recognise. The ones that have built the memory structures – through consistent, creative, broad-reach communication – that surface naturally in the moment that matters.

Stop chasing loyalty. Start building distinctiveness. The growth will follow.

To find out how the Extraordinary Brand Framework™ can help your brand build distinctiveness and accelerate growth, visit bonfireci.com or contact the Bonfire® team at [email protected]