Should a grocery or food store in Qatar spend on ads or retention?

Compare cost per new customer against cost per repeat order. If the first is more than three times the second — and it usually is — the next unit of budget belongs in retention, whatever the growth plan says.

Ads or retention, decided with a number

This is not an argument against advertising. It is an argument for advertising to fill a bucket that holds water, because acquisition into a store nobody returns to is a subscription to a treadmill.

Winning a customer costs money and selling to them again costs almost nothing, and most budgets are spent as though the reverse were true. For a grocery or food store in Qatar, the answer turns on one thing in particular: Grocery margins are thin and baskets are large, so the whole model lives or dies on delivery cost per order.

What is different about Qatar

Small, wealthy and concentrated — a store can reach most of the addressable market without a large budget.

Card payment dominates and delivery distances are short.

What is different about a grocery or food store

Discounting to grow trains people to wait for the discount. It works once.

Where a mobile app comes into it

Weekly reordering is the behaviour, and an app that remembers the last basket removes most of the work.