What you will learn
- Select channels based on audience, offer, and buying behaviour
- Calculate a budget from a target cost per lead and conversion rate
- Explain why customer lifetime value changes how much a business can spend
No business needs every channel. Choose based on how customers buy. If people search for the product when they need it, such as a plumber or a dentist, Google Search and local SEO usually come first. If the product sells on looks or impulse, such as clothing or home decor, Instagram and Facebook are a better fit. Start with two or three channels and do them well.
Set the budget by working backwards. Suppose, as an example, a clinic wants 20 new patients a month and one in four enquiries books an appointment. It needs 80 enquiries. If test campaigns suggest each enquiry costs around PKR 500, the media budget is about PKR 40,000 a month. These are illustrative figures; your own test results will replace them quickly.
How much a business can afford per customer depends on what that customer is worth over time. A gym member who stays for two years is worth far more than one month's fee, so the gym can pay more to win them. Compare customer acquisition cost with customer lifetime value. If acquiring a customer costs more than they will ever spend, the plan needs rethinking.