Strategic Cost Analysis and Financial Viability Assessment of Marketing Strategies in Mental Health Startups: Evidence from Indonesia

Abstract

The growing services of mental health startups in recent years show that people are becoming more aware of mental health well-being and indicate that psychological services are shifting toward digital platforms. However, many of these startups still struggle with financial challenges and uncertainty, including high client acquisition costs, inefficient and ineffective marketing spending, limited funding options, and unclear paths to profitability. This study examines the financial viability of marketing strategies in mental health startups through a strategic cost analysis framework that integrates cost structure evaluation, breakeven analysis, and cost of equity assessment. Return on Investment (ROI) serves as the principal profitability indicator for assessing whether marketing expenditures (investments) yield returns exceeding the cost of equity. The sample consists of four ventures operating in Indonesia. We employ panel regression techniques to examine the impact of marketing efficiency and financial sustainability under marketing strategies on founders’ decisions to allocate more marketing budget from their capital in assessing financial viability. The results demonstrate that marketing efficiency and breakeven achievement positively and significantly influence ROI, while the cost of equity—as the opportunity cost of founders’ capital—negatively affects reinvestment decisions. This study contributes to the literature on startup financial management by offering an analytical framework for optimizing marketing investment decisions toward sustainable profitability, especially in the mental health sector