How Much Are You Willing To Pay For New Customer?

“Why is advertising so expensive?”

“I’ve been spending so much on advertisements, but I’m getting little results from it.”

I’ve been hearing this from many sources – agencies, principals, friends and colleagues. Truth to be told, I don’t think that is a right question to ask, to begin with, it wasn’t about how expensive a leaderboard is, or how high are you bidding against your keyword.

It’s a question of how much are you willing to pay to acquire new customers.


Let me put it this way – instead of viewing it as a question, it actually serves as a way to view budgeting differently before. In a sense, it’s about finding out the critical path (within your reasonable budget) to acquire new customers. It’s like I’m willing to pay RM50 for a new customer.

Out of sudden the whole marketing process made sense. I’ll need to work within that budget to find leads. But hey, how did I get that figure of RM 50? Normally you’ll be able to estimate this figure based on the growth that you’ll need, which can be translated into the following checkpoints:

  • Number of leads (retail stores / SKUs etc).
  • Number of opportunities.
  • GMV per month VS number of buyers VS cart size.

The thing is, many channels will contribute into your business growth. It’s a matter of growth rate. Some channels work better, some not. So instead of questioning the effectiveness of a single channel, as a marketer, it is crucial to find out which channel performs the best. Let’s take event marketing as an example:

  • Invited 1000 pax to event.
  • Out of 1000, only 100 responded.
  • Out of 100, only 50 attended.
  • Cost per lead = no. of attendees / (cost of venue rental + cost of collaterals + cost of telemarketing)

Technically speaking, by understanding the effectiveness of your campaigns, you’ll be able to forecast the potential returns – be it online or offline marketing. So how does it relate to the question I posed? Simple.

It’s about getting the bang out of your buck.


Few weeks ago I wrote about why it pays to understand your customer, only through understanding the buyer journey, you will have a holistic approach to your marketing journey, you’ll be able to identify several touch points that they went through – which would help you in crafting engagement strategies. You’ll be able to draw inference on marketing executions like:

  • Increase of bunting placements drives more sign-ups to my local stores.
  • By sending out X on boarding emails, my conversion rate increased by Y percentage, which lead to increase in Z sales.
  • Running 5 different Facebook campaigns on rotational basis increased my sign-ups by X percentage.
  • And many more…

This whole process forms the funnel movement. The better you understand your customer, the more accurate your funnel is. The way that funnel works is that – it feels like a storyboard where you setup engagement points on where your potential customers get to know about you, date with you, and eventually, marrying you.

How continuous engagement can accelerate sales process.
How continuous engagement can accelerate sales process.

Through different set of activities, you’ll be able to understand which media mix works best for you, and you can optimize them further for better effectiveness. For the record, GHL and their subsidiary company, e-Pay is advertising really well on Facebook with their retargeting campaign. From what I could see, they have at least 4 retargeting campaigns that come in a sequence to convert you. It’s not really hardcore advertising, but it flows like a storyboard format which encourage you to find out.

In a nutshell, the more effective your advertising mix is, the lower cost it’ll be – which means more business for you.


I own a laptop, a smartphone and a tablet, and I would believe nowadays, people would at least have a laptop and smart phone (which is the very norm).

We use laptop for heavier tasks like writing articles, doing coursework or researching on topics, but somehow, it doesn’t stop us from checking email or Facebooking. We used to Whatsapp through our smart phones until they introduced a web version / desktop app for it.

“Think about integrated marketing channels. Think about 360 campaigns. Think of what would you want your customer to experience. Think about journey.”

The thing is, we have multiple devices that make us behave and interact differently from before. It is up to us, as a marketer, to find out that mix that works best, or even situations where we could target, for example, stuck in a jam but browsing Facebook.

We live in an omni-channel world where we need to consider multitude engagement to our audience. You can’t rely on a single source to drive traffic or driving awareness towards your product. You need to have multiple placement, think about your customer experience and journey.


In the past, I’ve shared that how online marketing metric can be deceiving and the results I gotten based on different avenues. When I was planning for these campaign, I’ve always viewed them as a whole, how can one engagement point push the lead to another point, therefore, helping me in converting them.

Understanding the funnel movement will help regardless in B2C or B2B environment where you get to see micro-conversions or process of converting potential customers into your real customers. With each medium having it’s own objective, at the end of the day, all marketing dollar should contribute to one ultimate goal – increasing sales.

Here’s a question for you – how much are you willing to pay to get a new customer?

I think putting budgeting this way helps me in identifying a clear and achievable goal. Because that amount that you’re willing to pay doesn’t come from the sky, but it comes from business data – where business owners or managers will need to be familiar of.


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