Marketing Budget and Diminishing Returns
A short direct-to-consumer brand decision problem. Use the supplied facts, commit to one action, then check your reasoning. Fictional practice; no leaderboard score is recorded.
Direct-to-consumer brand · diminishing returns
Results as you scaled one channel over three months:
| Month 1 | Month 2 | Month 3 | |
|---|---|---|---|
| Spend | $20,000 | $40,000 | $80,000 |
| Customers acquired | 500 | 870 | 1,020 |
| Cost per customer | $40 | $46 | $78 |
Average gross profit per customer is $60.