Wanna grow market share?
There are two ways to do it:
Get more buyers
Get your buyers to buy more
Which matters more? Interestingly, the research points to two things — and fairly definitively.
Jung, Zhu & Gruca did a great study of some IRI panel data. It covered the recorded (not recalled) grocery buying behavior of 50,000 US households over an entire year.
They tracked 4,573 brands in 427 categories. A very bigly big sample of grocery shopping.
Their research confirmed two brand laws.
First, the most important thing is to GET MORE BUYERS.
The average correlation between market share and penetration was 97%. Ninety-seven percent! That’s crazy.
Second, they found that share of wallet and purchase frequency ALSO rose with market share. Median correlation for SOW was 71% & for frequency was 62%.
And while those metrics aren’t as highly correlated as penetration (there’s more “wiggle”), they’re still both consistently positive. Which is to say that all these metrics mostly rise & fall together.
This is more evidence for the “Double Jeopardy” law described by Andrew Ehrenberg decades ago: small brands have fewer buyers, who buy less often. (And large brands have more buyers who buy more often.)
It’s still not well known in the halls of business or MBA programs. Crazy.
SO, some lessons:
1. If you want to grow share, focus on getting more customers.
2. Frequency and Share of Wallet also increase with market share, tho with more wiggle.
3. Learn the rest of the laws of brand science. They apply to your business too.