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The Game w/ Alex Hormozi
The Number That Will Scale Your Business More Than Anything Else | Ep 739
Jul 19, 2024
28:25
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Learn about the key business ratio LTV:CAC and how it impacts profitability and growth. Discover strategies to improve LTV and CAC to scale effectively. Real-world examples like Starbucks are used to illustrate the importance of these metrics.
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Quick takeaways
- Maximizing LTV:CAC ratio predicts business scalability and profitability.
- Focus on increasing LTV and decreasing CAC to improve business success and growth.
Deep dives
Understanding the Key Ratio for Business Growth
To grow a successful business, understanding a critical ratio between two key metrics is essential. The first metric is the Lifetime Value (LTV), which is the actual gross profit a customer brings over time, not just revenue. The second metric is the Customer Acquisition Cost (CAC), representing how much it costs to gain a customer. By maximizing the ratio between LTV and CAC, businesses can predict scalability, profitability, and overall success.
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Discover
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Listen to the best highlights from the podcasts you love and dive into the full episode