Leakiness less when large

Posted by Oliver Koll on May 13, 2015

leakyTo maintain a brand’s sales level it needs to continuously attract new buyers. Why? Because for the average brand more than half its buyers in one year are not buying it in the next year. However, the 50% leakiness rule needs to be adjusted: Larger brands are less leaky, and so are brands in frequently bought categories. An analysis of 4344 brands in seven markets provides some benchmarks:

The least leaky combination is a large brand in a frequently purchased category which on average keeps 75% of its buyers.

The most leaky combination is a small brand in an infrequently purchased category:  It loses 2 out of 3 buyers from year 1 to year 2.

The fact that brands lose a large percentage of their buyers from period to period has been established in marketing academia, for example in Byron Sharp’s seminal book How Brands Grow (2010, p.48).