I can’t lie, this new style of video just ruined his past videos for me. These are soo much better to my ears without the unnecessary music and sound effects.
He ran a year long “study” trying different forms of video styles and ways to convey information. After all of it, he said the simplified versions of his videos were by far the most popular, so that’s what he does now. Plus, he said he enjoys doing these kinds of videos more. Win win.
0:00 - Introduction and Overview 0:21 - Achieving a $100 Million Net Worth at Age 31 0:30 - Importance of Maximizing a Key Number 0:49 - The Key Ratio: LTV to CAC 1:00 - Defining LTV: Lifetime Gross Profit 1:34 - Understanding CAC: Customer Acquisition Cost 1:56 - The Impact of LTV to CAC Ratio on Business Growth 2:32 - Case Study: Mismanagement of LTV and CAC 3:48 - Correct Calculation of Lifetime Gross Profit 4:40 - The Role of Gross Profit in Business Reinvestment 5:10 - Clear Understanding of LTV and CAC for Business Owners 6:02 - Example of Efficient LTV to CAC Ratio: Starbucks 6:42 - Marketing Efficiency and Customer Acquisition Cost 8:00 - Strategies to Improve LTV to CAC Ratio 8:46 - Ethical Competitive Advantage through Higher LTV to CAC 9:20 - Real-Life Example: Business Coach’s Misunderstanding of LTV to CAC 10:08 - Importance of Knowing Data for Business Scaling 10:31 - Breaking Down LTV and CAC Metrics 12:00 - Example: Service-Based vs. Product-Based Business 13:00 - Optimizing Business Structure Based on LTV to CAC 14:50 - The Power of Cross-Selling and Upselling 16:00 - Case Study: Glass Repair Business Optimization 17:25 - Example: Pool Design Business Optimization 18:26 - Productizing Services for Higher Efficiency 19:00 - Following Business Passion vs. Business Efficiency 20:00 - Example: Gym Launch and High LTV to CAC Ratio 20:46 - Strategies to Improve LTV and CAC 21:51 - Practical Steps to Increase LTV 22:54 - Improving CAC: Funnel Efficiency 24:54 - Front-to-Back Strategy for CAC Optimization 25:54 - Summary of Business Insights and Strategies 26:29 - The Importance of Understanding and Applying Business Ratios 27:00 - Advanced Business Metrics and Strategies
Bro I studied in finance too. The goal of these programs is to make you a corporate drone for a bank or insurance company 💀 i quit mid program when I realized they don't teach you how to make money.
@@PBurgaard that makes sense, but I feel like it would be a worthy addition to the program, as it seems to drive a lot if not most of the financial results of the business
27:30 I spent a few hours today charting and reviewing discounted cash flow projections until 2043 for an oil and natural gas company out of Alaska. When Alex said “can this apply to investing” I had the same face because I found myself finding ROI multiples for different projections 😅 lots of variables like barrel pricing, recovery rate, and regulatory factors but a base case 40x and a High side 270x are exciting projections. Thank you Alex for always bringing VALUE for FREE to everyone who is willing to listen 💪🏼
Next big channel is the guy who figures out what companies are killing it like Alex talking about Starbucks and break down each one into a case study/playbook that can be used in parallel or other industries
TL;DR wining and dining will always work. We are service based. It’s been calculated the average CAC is 4,200 USD. . We immediately realized we were penny pinching ourselves out of millions. Introduced gifts, golf meetings, or anything we know the prospect/client enjoys into the sales process Since, our leads have increased and close rate is climbing.
This whole business math talk is the real deal-LTV to CAC is seriously the holy grail! If only more business owners understood this, we'd see way more successful businesses in the world. 🙌 Who's ready to take their business to the moon?
2:00 disproportionate returns for successful business over other investments 7:45 massive businesses are created from huge discrepancy between ltv and cac 14:30 how to stack multiple products to maximize ltv to cac, and scale your business 16:50 why productive services with a narrower offering can scale so much better 19:20 wealth creation of concentrated in periods where your ltv cac ratio is extremely high, rev that engine even if the money your making is so absurd it feels illegal 20:00 for to increase ltv basics 24:30 CAC can disproportionately increased at the front end 26:20 LTV is what differentiates big businesses and small businesses. Since CAC ends up converging for the same customer avatar 28:00 if what you’re doing is not getting you more customers cheaper, or making those customers worth more to you - you’re probably wasting your time
The difference between the money-making ads that get served on this channel where someone speaks rigidly like they are reading a teleprompter, and Alex, who speaks extemporaneously, off the cuff (and yet with authority) is: experience. Amazing how he gives this content away for free!
As a software developer aspiring to be fluent in product and bussiness, this video sounds like engineering to me which made it super clear where to fit the pieces.
Our company is not large enough yet to get the attention of Alex and Leila, but we are actively implementing everything Alex is sharing with the intent of earning his attention in the near future. Thank you for all the knowledge! You and Leila are total bad asses 😎
Alex, this was not too dense! It’s just like your work how Much effort are you willing to put in? not time……. Seriously, loved this video and loved the new direction of the channel. Keep it up, man you’re great.
I love this type of in depth information. It seems to me like your hesitant for whatever reasons to make more content like this. You dont want to bore and confuse people, you dont want to go to in depth on your secrets, it would be alot more effort on your end to produce the content? Whatever your reasons are im sure they are valid.
Fantastic information as always. I had to justify why I was starting with a weaker service, and the reason was that I needed to stress test the front desk/sales people at the practice. I did not want to push heavily on the most popular service and see them crash and burn.but when they asked about the next one, I was really just shooting in the dark. This video has shown me very clearly that the second or third thing that we push needs to be the service with the m highest LTV: CAC ratio
This is an unbelievable video. Incredibly clear, yet deeply explanatory. It's like a master's class in business, in less than a half hour. Thanks Alex!
Gem of a video. I just understood how to bring my business to 7:1 before the end of the summer. This is a gem of a video! We Need more like it 🙏🙏. PS: what about sorting the videos by topic, it would be amazing
This is one of the best videos for many reasons. The focus on one particular aspect of business LTV :CAC stood out because my mind stayed focused on one thing. You went more in depth and provided examples that anyone could most likely relate to. Thank you for this! I’m gonna study this one.
These not Brainrot videos are SO helpful. Keep it up brotha, just closed my first client today (organic, got two before with networking) super excited thanks brotha
Understanding this took me 3-5 times to rewatch this. But I am clear now. 😮 My mistakes are clear. And I need to truly embody this masterpiece simple principle and fundamental.
Broski, this was so value packed. Blows my mind we can get this shit for free. You're saving me so much time, $ & frustration by teaching lessons you had to go through years & pain to learn. I get to avoid all that & just implement lol. Hope you understand just how impactful you are to the younger gen of Entrepreneurs. Preciate you
I don’t understand how people don’t know this stuff already though this is basic. I know Alex teaches genius strategies but I can’t believe he had to make this video for people who don’t have common sense?!
LTV of Starbucks customer 14K plus on average. Insanity! Solid reminder to sell things that a lot of people buy a lot of and consistently. Great stuff!
1. Is LTV always a “historical metric”? I.e. how do you factor in uncertain future profits from non-churned or new customers? And if its always historical, does that mean its only calculated with churned customers? 2. How can i calculate either of these metrics with my tiny food service venue? I can’t necessarily afford a fancy tech stack, so i dont really know whose coming back and how i acquire my customers… (empirically, i mean. I do serve and talk to my regulars, but i dont have a non arbitrary way to track)
for 2. sounds like you need to start tracking data. For example, you can have an excel sheet where you store your customers history. If a customer comes back , you now update your sheet with that information so that you have actual numbers. You can say you serve your regulars but now you will know for example, that you served a particular regular 12 times in May. Overtime, you will now have data to calculate things like retention
@@wawawhayaaa that doesn’t really sound feasible. However, I have found that my POS does have a rudimentary way to track new vs return customers though
This is prob the #1 video I needed to hear this year. I've done offers that were 80:1 and now realizing the thing I'm doing now is 2:1 (lots of people)
This is exactly why I know our business model works in the long term and that’s how we attracted our investor with 100k. And still people won’t believe me 😉
I'm currently in the process of shooting video for me product and I did the math to find the ratio. It came out to 323:1, so I ran the numbers again just to check, obviously having to assume 10 sales over 1,000 calls, but that was the math that I came up with. Once it launches and I have a few dozen sales under the team's belt, I hope to see you in person one day.
This is a great video, in that it shows that money is not in the sale, but in the lifetime profit of a customer. Promote that where you can get them as easy as possible and take them in to a situation where you can keep them as long as possible
@@Nottherightgoat Which isn't even inherently a bad thing, as long as the products are valuable. Things like this CAN be a net-positive for everyone involved. That's how most business is done anyways.
FACT!! The success of your business hugely depends on the decisions you make This is the sole reason you need to be well-informed about the financial health of your business
Love this a lot more with the good old in your face angle. Amazing value as always as well! (I just finished 4 hours of listening to your old podcasts it's Mozi Sunday so to speak haha)
This was fantastic information. I make Natural products. I now see some of my newer products are selling without any ads because people trust my brand which is a great way to keep CAC low. My best seller and biggest LTV product is the Natural deodorants I produce because most of the time once a customer starts using it they will continue to do so. So after watching this I’m going to do the calculations you suggest and also that will be my primary product I advertise for customer acquisition. I’ll be watching to become fluent!
The value in this video is immense (coming from someone who sees almost all of your videos) This is the kind of stuff they pay thousands of dollars in masterclasses or mentorships! Thank you Alex
No fancy edits, no sound effects, no crazy jump cuts. Just straight up GAME. Alex always delivers
I ❤ his style. Just dropping gems with no chipping away at the dirt to get to them. 😂
I can’t lie, this new style of video just ruined his past videos for me.
These are soo much better to my ears without the unnecessary music and sound effects.
Agreed.
Not everyone responds to content the same way. Alex and his team know both styles are needed
same. This is much more helpful for me
He ran a year long “study” trying different forms of video styles and ways to convey information. After all of it, he said the simplified versions of his videos were by far the most popular, so that’s what he does now. Plus, he said he enjoys doing these kinds of videos more. Win win.
This sit-down format is my favourite by far.
100000% agree. More of this please Alex!
It's almost my favourite. Only second to standing with a whiteboard!
Agreed 🔥
this
@@AlmightyChubbmy fav! ❤😊
0:00 - Introduction and Overview
0:21 - Achieving a $100 Million Net Worth at Age 31
0:30 - Importance of Maximizing a Key Number
0:49 - The Key Ratio: LTV to CAC
1:00 - Defining LTV: Lifetime Gross Profit
1:34 - Understanding CAC: Customer Acquisition Cost
1:56 - The Impact of LTV to CAC Ratio on Business Growth
2:32 - Case Study: Mismanagement of LTV and CAC
3:48 - Correct Calculation of Lifetime Gross Profit
4:40 - The Role of Gross Profit in Business Reinvestment
5:10 - Clear Understanding of LTV and CAC for Business Owners
6:02 - Example of Efficient LTV to CAC Ratio: Starbucks
6:42 - Marketing Efficiency and Customer Acquisition Cost
8:00 - Strategies to Improve LTV to CAC Ratio
8:46 - Ethical Competitive Advantage through Higher LTV to CAC
9:20 - Real-Life Example: Business Coach’s Misunderstanding of LTV to CAC
10:08 - Importance of Knowing Data for Business Scaling
10:31 - Breaking Down LTV and CAC Metrics
12:00 - Example: Service-Based vs. Product-Based Business
13:00 - Optimizing Business Structure Based on LTV to CAC
14:50 - The Power of Cross-Selling and Upselling
16:00 - Case Study: Glass Repair Business Optimization
17:25 - Example: Pool Design Business Optimization
18:26 - Productizing Services for Higher Efficiency
19:00 - Following Business Passion vs. Business Efficiency
20:00 - Example: Gym Launch and High LTV to CAC Ratio
20:46 - Strategies to Improve LTV and CAC
21:51 - Practical Steps to Increase LTV
22:54 - Improving CAC: Funnel Efficiency
24:54 - Front-to-Back Strategy for CAC Optimization
25:54 - Summary of Business Insights and Strategies
26:29 - The Importance of Understanding and Applying Business Ratios
27:00 - Advanced Business Metrics and Strategies
Thank you!!
your the goat
Some heroes don't wear capes.
Bro thank you so much 💪🏾💪🏾💪🏾💪🏾
So much needed
It baffles me that I didn't learn about this in college while studying corporate finance 💀
Bro I studied in finance too. The goal of these programs is to make you a corporate drone for a bank or insurance company 💀 i quit mid program when I realized they don't teach you how to make money.
And they charged you for it! I hate that so many programs scam so many people not teaching them the real world important stuff.
You learn this in Marketing, not CF.
@@PBurgaard that makes sense, but I feel like it would be a worthy addition to the program, as it seems to drive a lot if not most of the financial results of the business
27:30 I spent a few hours today charting and reviewing discounted cash flow projections until 2043 for an oil and natural gas company out of Alaska.
When Alex said “can this apply to investing” I had the same face because I found myself finding ROI multiples for different projections 😅 lots of variables like barrel pricing, recovery rate, and regulatory factors but a base case 40x and a High side 270x are exciting projections.
Thank you Alex for always bringing VALUE for FREE to everyone who is willing to listen 💪🏼
Sorry I cant attend this meeting, Hormozi posted
real
Alex would do meeting while listening to the video bro
@@bobsimpson9228I’d hate to be partnered with you. It was a joke, develop a sense of humour.
This sit down and talk type format is just like the books. Every sentence feels packed full of content. I’m here for the long run :)
27:01 A business lesson that rolls a math class into a language class.🔥 100% invaluable and simplified. Thanks Alex, love this format.
Next big channel is the guy who figures out what companies are killing it like Alex talking about Starbucks and break down each one into a case study/playbook that can be used in parallel or other industries
PLEASE MORE OF THIS TYPE OF CONTENT!!!
TL;DR wining and dining will always work.
We are service based. It’s been calculated the average CAC is 4,200 USD.
.
We immediately realized we were penny pinching ourselves out of millions.
Introduced gifts, golf meetings, or anything we know the prospect/client enjoys into the sales process
Since, our leads have increased and close rate is climbing.
Have started doing this in my business too. Gifts for no reason! Works great especially for service businesses.
Gg dude
Thanks for Sharing!
This whole business math talk is the real deal-LTV to CAC is seriously the holy grail! If only more business owners understood this, we'd see way more successful businesses in the world. 🙌 Who's ready to take their business to the moon?
"This isn't an opinion problem it's a math problem" - Gold !!
The value of this content is crazy
2:00 disproportionate returns for successful business over other investments
7:45 massive businesses are created from huge discrepancy between ltv and cac
14:30 how to stack multiple products to maximize ltv to cac, and scale your business
16:50 why productive services with a narrower offering can scale so much better
19:20 wealth creation of concentrated in periods where your ltv cac ratio is extremely high, rev that engine even if the money your making is so absurd it feels illegal
20:00 for to increase ltv basics
24:30 CAC can disproportionately increased at the front end
26:20 LTV is what differentiates big businesses and small businesses. Since CAC ends up converging for the same customer avatar
28:00 if what you’re doing is not getting you more customers cheaper, or making those customers worth more to you - you’re probably wasting your time
The difference between the money-making ads that get served on this channel where someone speaks rigidly like they are reading a teleprompter, and Alex, who speaks extemporaneously, off the cuff (and yet with authority) is: experience. Amazing how he gives this content away for free!
As a software developer aspiring to be fluent in product and bussiness, this video sounds like engineering to me which made it super clear where to fit the pieces.
Our company is not large enough yet to get the attention of Alex and Leila, but we are actively implementing everything Alex is sharing with the intent of earning his attention in the near future. Thank you for all the knowledge! You and Leila are total bad asses 😎
Definitely watching this video 10 times a day, major value
The Fundamentals are so important
This is a serious business class, top level. Gold.
No clue how lost I would be in the world of business without Alex's videos
Alex, this was not too dense! It’s just like your work how Much effort are you willing to put in? not time……. Seriously, loved this video and loved the new direction of the channel. Keep it up, man you’re great.
I love that you're throwing in more and more examples from the ecommerce world and not just service business. Please more!
I LOVE the math oriented side(s) of these videos.
I love this type of in depth information. It seems to me like your hesitant for whatever reasons to make more content like this. You dont want to bore and confuse people, you dont want to go to in depth on your secrets, it would be alot more effort on your end to produce the content? Whatever your reasons are im sure they are valid.
Fantastic information as always. I had to justify why I was starting with a weaker service, and the reason was that I needed to stress test the front desk/sales people at the practice. I did not want to push heavily on the most popular service and see them crash and burn.but when they asked about the next one, I was really just shooting in the dark. This video has shown me very clearly that the second or third thing that we push needs to be the service with the m highest LTV: CAC ratio
This is an unbelievable video. Incredibly clear, yet deeply explanatory. It's like a master's class in business, in less than a half hour.
Thanks Alex!
Everything makes so much sense now.
Please make more detailed vids like this.
On my 6th watch.
Hi Alex, I love money/business math! Please don't apologize and do more of it! Keep it up! You the GOAT
I can't thank enough, thank you Alex. This is THE GAME.
Wow the hair extensions and coaching example is exactly my business. Felt like a custom solution. Extremely insightful, as always!
Me too. But Into Hair Extensions
More of these content please!! Love getting into the hard numbers! 😆
I have seen hundreds of your videos and this one its the most impactful for me so far.
Thank you.
This is unbelievably valuable. Thank you, Alex. Appreciate you big G.
Gem of a video. I just understood how to bring my business to 7:1 before the end of the summer. This is a gem of a video! We Need more like it 🙏🙏.
PS: what about sorting the videos by topic, it would be amazing
This is one of the best videos for many reasons. The focus on one particular aspect of business LTV :CAC stood out because my mind stayed focused on one thing. You went more in depth and provided examples that anyone could most likely relate to. Thank you for this! I’m gonna study this one.
An amazing summary as always! Thank you infinite times for sharing your overviews and views! Sending you a lot love, respect and thankfullness! 🧡
These not Brainrot videos are SO helpful. Keep it up brotha, just closed my first client today (organic, got two before with networking) super excited thanks brotha
A combination of education+effective entertainment is neccessary. Reverting to linear only gets so far.
Probably one of your best videos. I couldn't agree more with what you are sharing.
These lecture/conversation style videos are amazing. Thank you for them!
Been waiting for this video 🔥🔥🔥 no one has explained it better than Alex
“I’ve already watched this 7 times. It’s business music!” - BB
The granularity of this info is insane!
So good.
Understanding this took me 3-5 times to rewatch this. But I am clear now. 😮
My mistakes are clear. And I need to truly embody this masterpiece simple principle and fundamental.
Pure gold - as usual. Thanks, Alex.
Content just got better
I think you should be more popular
Broski, this was so value packed. Blows my mind we can get this shit for free. You're saving me so much time, $ & frustration by teaching lessons you had to go through years & pain to learn. I get to avoid all that & just implement lol. Hope you understand just how impactful you are to the younger gen of Entrepreneurs. Preciate you
I don’t understand how people don’t know this stuff already though this is basic. I know Alex teaches genius strategies but I can’t believe he had to make this video for people who don’t have common sense?!
LTV of Starbucks customer 14K plus on average. Insanity! Solid reminder to sell things that a lot of people buy a lot of and consistently. Great stuff!
1. Is LTV always a “historical metric”? I.e. how do you factor in uncertain future profits from non-churned or new customers? And if its always historical, does that mean its only calculated with churned customers?
2. How can i calculate either of these metrics with my tiny food service venue? I can’t necessarily afford a fancy tech stack, so i dont really know whose coming back and how i acquire my customers… (empirically, i mean. I do serve and talk to my regulars, but i dont have a non arbitrary way to track)
He should reply to this
for 2. sounds like you need to start tracking data. For example, you can have an excel sheet where you store your customers history. If a customer comes back , you now update your sheet with that information so that you have actual numbers. You can say you serve your regulars but now you will know for example, that you served a particular regular 12 times in May. Overtime, you will now have data to calculate things like retention
@@wawawhayaaa that doesn’t really sound feasible. However, I have found that my POS does have a rudimentary way to track new vs return customers though
This is prob the #1 video I needed to hear this year.
I've done offers that were 80:1 and now realizing the thing I'm doing now is 2:1 (lots of people)
I'm curious to know wich busisness model did 80:1?
I'll watch again when I'm not driving. This is a game changing lesson!
I love how many other "boring businesses" he talks about like glass repair/painting
This is GOLD!!!!!!!! SERIOUSLY!!
great advice, great explanation, great strategy (and great format, love no background music)
easily the best video I've watched from Alex ❤
Great stuff 👍. Thank you Alex & team for sharing that much value for free, on a recurrent basis.
This was the most info-dense video so far. Thanks man
This one is pure gold Alex, great insights
Please please please do more vids that are dense like this. Insane value and truly so helpful!
Freaking awesome!!! Alex you are solid in business!! Thanks for the inspiration!
More of this type of content please!
This is exactly why I know our business model works in the long term and that’s how we attracted our investor with 100k. And still people won’t believe me 😉
We need more of this!!!!
Thank Alex a really learn from you much then I learned from anyone else's in any industry ❤
I'm currently in the process of shooting video for me product and I did the math to find the ratio. It came out to 323:1, so I ran the numbers again just to check, obviously having to assume 10 sales over 1,000 calls, but that was the math that I came up with. Once it launches and I have a few dozen sales under the team's belt, I hope to see you in person one day.
These business videos are the best content
GOAT 🔥, Love You my Man!
Love the examples of real businesses
Pure GOLD. Thank you 🙏
11 pages of notes. Time to get to work. Thanks Alex!
Mom, wake up!! Alex posted a new video
“When you boil hot water and sell it for 6 bucks you make a lot of money“ 😂
Even better
Add some brown plant and milk with cream
Sell for 12
That's coffee
😂😂😂😂
most helpful video on growing early business on the internet right now.
Love it Mozi 🤝✊keep up the good work!
Anyone else hear this audio hiss?
Love Alex and his content!
Love it! Studying the transcript line by line
Keep up this style so good
Excellent video. Thanks Alex.
This is a great video, in that it shows that money is not in the sale, but in the lifetime profit of a customer.
Promote that where you can get them as easy as possible and take them in to a situation where you can keep them as long as possible
This style of video is fantastic.
start with the service that has the lowest LTV:Cac ratio then behind it upsell the rest..
Was waiting for someone to break this down this simply for so long ! Thank you so much Alex I got some homework to do now
Great lessons, thank you for sharing…ps, I like the delivery format too 🤙
Alex literally dropping gold bars for us
how tf is this information free
Because knowledge isn’t a fraction as valuable as applied knowledge
Because he is then going to make money off of you. You are the product.
@@Nottherightgoat well i rather be the product with Hormozi and $5M on my pocket than not be with $0... you choose.
@@Nottherightgoat Which isn't even inherently a bad thing, as long as the products are valuable. Things like this CAN be a net-positive for everyone involved. That's how most business is done anyways.
How tf did we start believing that we needed to spend thousands for such trash info. He’s going over billions. Not course sales. Different game.
FACT!!
The success of your business hugely depends on the decisions you make
This is the sole reason you need to be well-informed about the financial health of your business
this content is fire. what a good pivot.
A condensed video on all business math would be awesome
Man, Alex just keeps blowing my mind every time I watch him. Jesus, when will he stop delivering the keys to the kingdom?
Love this a lot more with the good old in your face angle. Amazing value as always as well! (I just finished 4 hours of listening to your old podcasts it's Mozi Sunday so to speak haha)
TOP TIER business video. I've watched twice today time to implement today thanks Alex
This is soo goood. I am privillegded to watch this. I kinda feel I should pay for it.
This was fantastic information. I make Natural products. I now see some of my newer products are selling without any ads because people trust my brand which is a great way to keep CAC low. My best seller and biggest LTV product is the Natural deodorants I produce because most of the time once a customer starts using it they will continue to do so. So after watching this I’m going to do the calculations you suggest and also that will be my primary product I advertise for customer acquisition. I’ll be watching to become fluent!
You are a major inspiration to me. Major game changer. Thank you so much! ❤
Thank you for all the info Alex!
Best content so far.
The value in this video is immense (coming from someone who sees almost all of your videos)
This is the kind of stuff they pay thousands of dollars in masterclasses or mentorships!
Thank you Alex
This video killed!❤