customer acquisition cost

(Watch the YouTube video of this episode HERE)

“This becomes a business that you can scale endlessly and becomes an incredibly attractive business.” Today, Alex (@AlexHormozi) explores seven essential investing concepts that drive business growth and financial success. Through real-life examples, Alex simplifies complex financial metrics, including Lifetime Gross Profit, Customer Acquisition Cost, Return on Invested Capital, Payback Period, and Total Adjustable Market. Gain valuable insights on measuring and interpreting these indicators to make informed investment decisions, while also understanding the importance of these concepts for business scaling and risk management.

Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.

Timestamps:

(0:48) - Concept #1: LTGP:CAC

(1:47) - Concept #2: LTGP (Life Time Gross Profit)

(8:18) - Concept #3: CAC (Customer Acquisition Cost)

(11:13) - Concept #4: ROIC (Return On Invested Capital)

(15:54) - Concept #5: Payback Period

(19:03) - Concept #6: Sales Velocity x LTGP

(21:14) - Concept #7: Sales Velocity / Churn

(23:22) - Concept #8: Total Adjustable Market (TAM)

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It’s all about understanding the formulas. Today, Alex (@AlexHormozi) talks about the importance of understanding the two fundamental equations of business to make informed decisions. He also emphasizes the need to know the number of new sales per month and lifetime gross profit per customer.

Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.

Timestamps:

(1:05) - Fundamental equation: number of new sales or sales velocity

(2:38) - How to calculate lifetime gross profit per customer

(7:13) - Equilibrium point is where we level out

(9:08) - Cost to acquire a customer

(10:10) - 3:1 LTV to cap ratio or greater is necessary for growth

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(This episode is a re-run. Original airdate was November 16, 2021)

You need math people! Today, Alex (@AlexHormozi) talks about the two most valuable equations you need, why you need math when doing business, having high-quality data,  and how these will help you make important decisions for the business!

Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.

Timestamps:

(1:26) - Factors: new sales, profit per customer, max revenue

(3:04) - Explanation: profit equation, margin, buying equilibrium

(13:03) - Strategy: making money by acquiring customers

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All big businesses run off of extraordinary degrees of arbitrage. Today, Alex (@AlexHormozi) talks about what arbitrage is, how you can harness, and leverage it in your business.

Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.

Timestamps:

(0:45) - The definition of "Arbitrage" and how all businesses are arbitrage

(3:13) - The difference between economic profits and accounting profits

(6:28) - What factor is going to dictate if it's one market or another?

(7:46) - One valuable concept to understand

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Profit is what begets growth. Today, Alex (@AlexHormozi) talks about what he does on $50,000 consulting days when he’s talking to high-level business owners and walks us through one of the biggest mistakes he has made that involves the front end. Remember: Once you have a product that is a very well-oiled machine on the back end, it takes a tremendous amount of effort to change your machine.

Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.

Timestamps:

(1:39) - Decrease business complexity, improve front and backend.

(6:21) - Factors for front and backend; Alex shares scaling mistake.

(11:59) - Bigger business needs simplicity for scalability.

(15:59) - Create leverage, simplify backend for more profit.

(17:16) - Greater arbitrage = more money and profit in the end.

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"The only number that really matters in marketing from an acquisition standpoint is cost per acquisition." Today, Alex (@AlexHormozi) discusses the importance of measuring marketing success based on cost and lifetime value ratios, rather than just the cost per lead. He walks through each step of the funnel and emphasizes the need to measure as close to the sales stream as possible.

Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.

Timestamps:

(1:12) - Cost per acquisition is the only important marketing metric.

(3:58) - Aim for a 3:1 or higher LTV to cost of acquisition ratio.

(8:21) - Analyze marketing success based on cost and lifetime value ratios.

(10:38) - Lead quality can improve 3-5x based on pre-opt-in information.

(11:54) - Non-opt-ins due to program details save time and effort.

(12:51) - Measure revenue per show to evaluate campaign success.

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