Byron Sharp and How Brands Grow: The Research, the Arguments, and What They Mean for CMOs

Byron Sharp is the Professor of Marketing Science at the University of South Australia and director of the Ehrenberg-Bass Institute, the world's largest marketing research centre. His 2010 book How Brands Grow — and its 2015 sequel, How Brands Grow Part 2 — presented decades of empirical buying behaviour research in a form that practitioners could read and apply.

The book was polarising when it appeared. It challenged several of marketing's most comfortable assumptions. Some of those challenges were genuinely uncomfortable. Some were miscommunicated. And some were misread in both directions — by enthusiasts who took the findings further than they go, and by sceptics who dismissed them for the same reason.

What follows is an attempt at the accurate version: what Sharp's research actually shows, what it doesn't show, and how a CMO should use it.

Who is Byron Sharp and what is Ehrenberg-Bass?

The Ehrenberg-Bass Institute's research programme was built on the empirical work of Andrew Ehrenberg, a British statistician who spent four decades documenting statistical regularities in buyer behaviour across categories, countries, and time periods. Ehrenberg found that many of the things marketing intuitively assumed about buyer behaviour — that loyal buyers drive growth, that heavy users are strategically special, that marketing builds deep relationships — did not match what the data showed when actual buying records were analysed at scale.

Byron Sharp extended and systematised Ehrenberg's findings. How Brands Grow is Ehrenberg's body of evidence translated into practical strategy language, with the implications for brand strategy, media planning, and budget allocation made explicit. It is not a theory book. It is a data book — which is both its strength and the source of some misreadings.

The five core findings

1. Brands grow through penetration, not loyalty

The most cited finding in the book — and the most frequently oversimplified. What the data shows: in most mature consumer categories, large brands differ from small brands primarily in the number of buyers they have, not in how often or how loyally those buyers purchase. Large brands have more buyers. Those buyers purchase at roughly similar frequencies to buyers of smaller brands in the same category.

The implication: the primary mechanism for brand growth is recruiting new buyers, not increasing the frequency of existing ones. Marketing that targets existing customers with retention and loyalty objectives can have legitimate commercial value — particularly where lifetime value is high and churn is costly — but it is not, on average, the mechanism that grows market share.

What this does not say: that loyalty is worthless, that retention doesn't matter, or that heavy buyers are unimportant. It says that in most categories, the path to meaningfully larger market share runs through penetration. The population of light and non-buyers is larger, and they are the ones who have to start buying for the brand to grow.

2. Double Jeopardy

One of the most empirically solid findings in the Ehrenberg-Bass catalogue. Small brands suffer twice: they have fewer buyers than large brands (first jeopardy), and among the buyers they do have, those buyers purchase the brand less often and are more likely to defect (second jeopardy).

This is a structural feature of markets, not a management failure. It holds across categories and countries with high consistency. The small brand's lower loyalty is caused by lower mental availability — it comes to mind less often in purchase situations — not by any operational deficiency in how the brand treats its customers.

The CMO implication: a challenger brand cannot simply out-execute its way to parity with a market leader on loyalty metrics. The structural disadvantage is real. Growing requires reaching more buyers — which requires a media and communications strategy that prioritises reach over depth of relationship with existing customers.

3. Mental availability and physical availability

Sharp translates Ehrenberg's findings into two operational concepts that have become the most widely used outputs of this research programme in commercial strategy.

Mental availability is the probability that a buyer will think of a brand in a buying situation. It is built through breadth of reach — exposure across the full buying population, not just confirmed customers — and through association with the range of purchase occasions in the category. Sharp calls these occasions "category entry points": the specific situations, needs, and contexts that trigger a category purchase. A brand that comes to mind in more of these contexts for more buyers has higher mental availability.

Physical availability is the ease with which a buyer can find and purchase the brand when they want to. Distribution depth, prominence, format availability, and accessibility all contribute. The two reinforce each other: high mental availability without physical availability is lost demand; high physical availability without mental availability is a commodity.

4. Distinctiveness, not differentiation

Sharp makes an empirical case that the strategic concept the industry calls "differentiation" — building a brand around meaningful points of difference that buyers consciously value over competitors — is less commercially important than distinctiveness: the degree to which the brand is immediately recognisable and attributable in the category.

Distinctive brand assets — a specific colour, logo form, character, sonic identity, or pack shape that has been built over time and is strongly associated with one brand — allow buyers to notice, attribute, and recall the brand without consciously processing its claimed differences. Distinctiveness works through recognition, which is faster and more durable than deliberate evaluation.

The practical argument: a brand that changes its creative platform, colour treatment, or visual identity with each campaign is spending money building mental structures that it then resets. The investment in distinctiveness compounds only with consistency. The creative brief that says "we need something fresh and different" and the marketing science brief that says "we need something immediately attributable" are often in tension.

5. The Negative Binomial Distribution (NBD) and buyer behaviour laws

The most technical claim in Sharp's work — and the one that underlies all the others — is that buyer behaviour in most categories follows predictable statistical distributions that hold across time, country, and category. These distributions produce the observable patterns: Double Jeopardy, the penetration-loyalty relationship, the demographic similarity of buyer bases across competing brands.

This matters for the CMO because it means the patterns are predictable, not incidental. Double Jeopardy is not something that happens to some brands in some circumstances. It is a structural feature of how markets work that a CMO can anticipate and plan around.

What Sharp's work is frequently misread to say

Two misreadings are common enough to be worth naming directly.

Misreading 1: loyalty programmes are worthless. Sharp's evidence is that loyalty in the Ehrenberg sense — purchase frequency and share of category requirements — is broadly similar across competing brands and does not explain growth. It is not a claim that retaining customers is unimportant, that CRM has no value, or that customer experience doesn't matter. In categories with high switching costs, high lifetime value, or strong network effects, loyalty dynamics work differently. Apply the research to your category, not to a universal prescription.

Misreading 2: targeting doesn't work. Sharp's evidence argues against using precision targeting as the primary mechanism for brand building — because brand growth comes from reaching buyers who haven't bought yet, and precision targeting is best at reaching people who already look like your customers. It is not an argument that targeting has no value for activation, direct response, or retention. The research is about the brand-building layer of the marketing budget, not the whole budget.

How to use this in a board conversation

Most CMOs who cite Ehrenberg-Bass do so in marketing conversations — strategy reviews, creative briefs, agency direction. That is legitimate. The more commercially powerful application is using the research to make the case for brand investment in a CFO or board conversation.

The argument structure: "In our category, growth comes primarily from increasing the number of people who buy us, not from making existing buyers more frequent or more loyal. The mechanism for reaching those buyers is broad-reach brand communication that builds mental availability over time. That investment produces measurable effects in share of search and, with a six-to-twelve-month lag, in market share. Our current media plan runs too narrowly against confirmed buyers. Here is the reallocation proposal and the leading indicators we will track."

That is a commercial argument grounded in evidence. It is very different from "we should invest in brand because brand is important." The CFO who hears the first version can evaluate it. The CFO who hears the second version cannot — and will default to cutting the budget.

Sharp's research, combined with Les Binet's effectiveness work, gives the CMO the evidence base to make the first version of the argument credible. That is its commercial value — not as a creative brief tool, but as a budget defence instrument.