Work it out backwards. Decide how many new customers you need, estimate how many enquiries it takes to win one, and multiply by what an enquiry costs. That gives the budget. Then check it against what a customer is worth to you: if winning a customer costs more than they bring in, the answer is to fix the offer or the follow-up, not to spend more.
The four numbers
- New customers you need in a month.
- Enquiries per customer. If one in four people who ask ends up buying, you need four enquiries for each customer.
- Cost per enquiry. What you spend to get one person to message or call.
- What a customer is worth. What they spend with you, less what it costs you to serve them.
A worked example
A guest house wants 20 extra bookings next month. From experience, about one enquiry in four becomes a booking. So it needs about 80 enquiries.
| Step | Sum | Result |
|---|---|---|
| Enquiries needed | 20 bookings × 4 | 80 enquiries |
| If an enquiry costs N$20 in advertising | 80 × N$20 | N$1,600 of advertising |
| If an enquiry costs N$50 in advertising | 80 × N$50 | N$4,000 of advertising |
| Advertising cost per booking | N$1,600 to N$4,000 ÷ 20 | N$80 to N$200 |
If a booking is worth N$900 to the guest house, paying N$80 to N$200 to win one makes sense. If a sale is worth N$60, it does not, and the business needs a cheaper way to reach people or a higher-value offer.
You do not know your cost per enquiry yet
Nobody does before they advertise. That is the purpose of a small first campaign: spend a limited amount for two weeks, count the enquiries, and divide. Then plan the real budget from your own number. What adverts cost gives the range to expect.
The smallest amount worth spending
Below a certain daily amount, an advert gathers too few results for anyone to tell what is working. We plan on at least N$50 of advertising a day per channel, which is why our smallest campaign budget is N$1,499.99 over two weeks. If you have less than that, spend it on nothing and do the free things first.
What the budget has to cover
- The advertising itself, paid to the platforms.
- Making the adverts: design, photos, words.
- Planning, setting up, watching and reporting, whether you pay someone or use your own time.
Three mistakes
- Spending a little on everything. One channel done properly beats five done thinly.
- Stopping after a week. The first week is when the platform is still learning.
- Spending more when enquiries do not convert. Fix the reply, the price or the follow-up first.