The idea
Customers do not care what you paid for spectrum or a campaign. Only future revenue and future costs should decide whether to continue. Opportunity cost works the other way: it adds a real cost that accounts often miss, such as the paid capacity that free bonus data uses up on a busy site.
Use it thoughtfully
- Remove past spending from decision papers.
- Compare only future revenue and future costs.
- Name what each option gives up.
An example
ILLUSTRATIVE EXAMPLE: A campaign is underperforming after spending most of its budget. The team stops it and moves the remaining money to a channel with better results.
A question to try
Which current project would you stop today if you ignored what has already been spent on it?
A useful framework is a starting point, not a guarantee. Effects vary with the audience, product and situation. Use truthful evidence, respect customer choice, and test the result.