What an enquiry should cost: work it out before launching ads, not after
Advertising "does not pay off" almost always because nobody worked out the payback in advance. Four numbers to know before the first pound of budget.
Why not just "try" some advertising?
"Let's put in five hundred and see" — that is how most stories of wasted budget begin. The problem is not the amount but the missing criterion: what counts as success? Are ten enquiries good or bad? The answer depends on four numbers every business has, even if nobody has written them down.
Number one: what you earn from one customer
Not revenue — what is left after direct costs. If you do home renovations with an average job of £20,000 and a 20% margin, one customer brings £4,000. If you sell a course for £300 with almost no direct cost, one customer brings about £300. This is the ceiling everything else is calculated from.
Number two: what share of enquiries become customers
Count last month: of everyone who wrote or called, how many paid? For most small businesses it is 10–30%. If you do not know, that is the first reason to sort out your enquiries before launching ads — otherwise you will pay for enquiries nobody handles.
Number three: what you are willing to pay for a customer
A business is usually willing to spend a quarter to a half of the first order's profit on acquisition — more if customers come back. The renovator with £4,000 of profit can afford a customer at £1,000–1,500. The course seller with £300 of profit — £75–100.
Number four: the maximum cost per enquiry
Now multiply: acceptable cost per customer × share of enquiries that become customers. Renovator: £1,200 × 20% = £240 per enquiry. Course seller: £90 × 25% ≈ £22 per enquiry. This number is the only honest criterion for any campaign. If enquiries come in cheaper — scale; if dearer — fix or switch off.
What to do with this number?
First: compare it with reality before launch. Google Ads shows bid estimates for your keywords; a typical landing-page conversion rate for services is 2–5%. If a click costs £4 and the page converts at 3%, an enquiry will cost around £130. For the renovator that works; for the course seller it is an immediate no — a different platform, a different page or a different offer is needed. This is clear before launch, not a month later.
Second: set up tracking so that after launch you see the cost not of a click but of an enquiry and a sale, by source. Without it you will be back in "something seemed to happen, but it's unclear" within a month.
And if there is no time to calculate?
The calculation takes an hour if the data is at hand and a day if it has to be collected. It is the most profitable hour in advertising. If you would like us to do it for you and show you the finished campaign set-up before you pay, see our Advertising service.