Most Nigerian Businesses Cannot Say What a Customer Cost Them

Most Nigerian businesses put money into marketing every month. Very few of them have ever divided what they spent by how many customers it brought.

Take a business that spends two million Naira in a month across ads, influencer posts, and promotions. Ninety people buy something. That is roughly twenty-two thousand Naira to get one customer. If the average customer spends fifteen thousand Naira and never comes back, the business lost seven thousand naira on every single sale and recorded it as a good month.

The founder treats this as something to work out later, when the business is bigger, and somebody is paid to look at it. So he keeps spending, keeps watching customers arrive, and keeps reading arrival as proof that the money is working. He can see the customers, and he can see the revenue, and neither of them looks like a problem.

A founder who has never calculated what it costs to get a customer cannot tell a customer worth having from one that costs him money. The customer who came through a referral cost nothing to bring in and spends fifteen thousand Naira every month. The customer who came through the giveaway cost twenty-two thousand naira and spent fifteen thousand once. The business sees two customers that month. It cannot see that the referral customer is pure profit and the other one is a loss.

Twenty-two thousand Naira went out to bring that customer in. The customer spent fifteen thousand Naira and stopped. Seven thousand naira left the business on that one sale and stayed gone. Do that ninety times in a month and the business has paid six hundred and thirty thousand naira to serve people who will never come back, while every one of those sales sat in the revenue line looking like progress.

The same calculation works in any business. Add up everything spent on bringing customers in last month. Divide it by how many people actually paid. That is what one customer costs. Put it next to what a customer spends before he stops buying, and you know whether you are running a business or funding one.

Nigeria's digital economy is built by businesses that make money on the customers they serve. A business spending more to get a customer than that customer will ever pay is losing money on every sale without knowing it, and the more customers it brings in, the faster the money finishes.