How much to spend testing a new city, and when to stop

Many city tests begin as a sentence over tea: put some ads in the next town and see what comes. Three months later nobody can say whether it worked, because nobody said what working meant. Spend a sum you can lose without touching the home city's money. Pair it with a count of real enquiries that must arrive from the new city before another rupee goes out. Write both down. Date it. The exact figure matters less than the fact that it was fixed first.

Why the number has to be written before the first rupee

Once money is spent, the owner reads the result to fit a hope. Two calls from a large hotel feel like a market. Twenty calls from people asking the price feel like nothing. Without a line drawn in advance, the test turns into "one more month", and then another, and the city is never closed or properly opened.

A written count also settles the argument with whoever runs the ads. The agency or the nephew will report clicks and leads. You count something else, and the sheet says what. And the home city keeps its budget, because a test with a ceiling cannot slowly eat the money that wins orders at home.

What goes into a test budget besides the ads

A separate mobile number, used for this city and nowhere else, so every call can be counted. Travel for the first meetings, because a buyer in a new city wants to see a face once before ordering from a stranger. Samples or a demo piece. And somebody's days: the person who answers the number and calls people back.

Put a rupee figure against each line, including the days. If the total frightens you, shrink the test area before you shrink the follow-up.

How many enquiries are enough to judge a city?

Work it out from your home city, where you already know the numbers. Ask two questions. Out of every ten real enquiries at home, how many become orders? And how many orders would convince you the new city is worth a person on the ground?

For example, if one in eight home enquiries becomes an order and three orders would convince you, you need about 24 real enquiries from the new city. Do not lower that bar because the city is new. An unknown name is unlikely to convert better than a known one.

Then define a real enquiry, in writing. A named business or person located in the test city, with a requirement you can supply, who answered when you called back. Job seekers, people from your home city and forms with fake numbers do not count.

The budget follows from the count. Take what an enquiry costs you at home, multiply by the count, and add a margin for being unknown. Write down the margin you chose.

The test sheet

One page, filled in before the campaign goes live and kept where the person answering the phone can see it.

• City and area: the district or the radius, named. "Tirunelveli and Palayamkottai, inside the bypass" is a test. "South Tamil Nadu" is not.
• Ceiling: the total in rupees, all lines included, and the date it runs out.
• Count: the number of real enquiries that must arrive by that date.
• Definition: what counts as a real enquiry and what does not, as above.
• Owner of the count: the one person who reads each enquiry against the definition and ticks it.

Below that, the three outcomes, decided now:

1. Count reached before the money is gone: continue, and name the next step (a person in the city two days a week, local stock, an address).
2. Money gone and count below half: stop, write one line on why, and file the sheet.
3. Anywhere in between: one extension, at the same ceiling or less, with one change named in advance. A second extension is not allowed.

For example: a Madurai solar installer tries Tirunelveli

This is an invented case. A rooftop solar installer in Madurai fits systems on houses, shops and small rice mills. The owner fills in the sheet for Tirunelveli. The ceiling is an illustrative ₹60,000 over eight weeks, for search ads, a local number and two trips. The count is 15 enquiries from owners of a house, shop or mill in Tirunelveli or Palayamkottai, with the roof and the meter in their own name.

At week six the ad account shows 31 leads. The owner starts asking about a rented office near the new bus stand.

The owner's salesperson reads the 31 against the sheet. Seven are tenants, who cannot fit anything on a roof they do not own. Five are from Thoothukudi and Nagercoil, outside the area. Four want a job. Four wanted only a price per panel, to buy elsewhere. Eleven are real. The ad account counted anyone who filled the form; the sheet counted people who could buy.

At week eight the real count is 12: short of 15, well above half, so the third outcome applies. The ads now say "for your own house, shop or mill in Tirunelveli". Searches for panel prices and jobs are excluded, and the area is pulled in to the city and Palayamkottai. That one change goes into a single four-week extension at an illustrative ₹25,000. By its end the count stands at 19. The owner takes the step the sheet named in advance: a site engineer in Tirunelveli two days a week. No office yet.

When a small test is the wrong way to judge a city

Skip the ads test if you sell capital equipment with a long buying cycle. One order may pay for the whole year, and enquiries will be too few to count in eight weeks. Judge that city on meetings with named buyers, from a list you build and visit.

Do not test where you cannot yet deliver or service, and if the home city is short of attention right now, wait. A test answered by a tired owner at nine at night measures the owner, not the city.

Before anyone opens an ad account

Fill in the sheet for the city you have in mind: the area, the ceiling, the count and the definition. If you are still choosing the city, how to choose which city to sell in next starts from your own records, and our locations pages show the channels buyers use in each. Once a test says yes, how to enter a new city covers what must be in place. If the sheet needs a budget you cannot yet defend, marketing budget optimisation is the related service. Send the sheet along with your brief, and tell us what you need.