Should an electronics store in Saudi Arabia 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 an electronics store in Saudi Arabia, the answer turns on one thing in particular: Electronics are compared before they are bought, and the comparison happens on somebody else’s site. Price is visible and margin is thin.

What is different about Saudi Arabia

Saudi Arabia is the largest ecommerce market in the region by some distance, and the most phone-dominated.

Cash on delivery remains common in Saudi Arabia, which changes the economics of every refused delivery.

What is different about an electronics store

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

Where a mobile app comes into it

Electronics buy rarely, so an app has less to do here unless accessories and consumables are a real part of the business.