

E098: The LTV Trap: Escape Your Broken Business Model
45 snips Feb 26, 2025
This discussion dives into the challenges of chargebacks in e-commerce, exposing how ‘friendly fraud’ costs merchants dearly. Strategies for preventing and managing chargebacks are explored, emphasizing the importance of robust data infrastructures. The nuances of customer lifetime value (LTV) and its role in evolving business models are addressed, alongside innovative approaches for SaaS pricing. Networking insights reveal how social connections can yield significant business value, while future consumer trends are examined for their impact on market strategies.
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Hexclad's Chargeback Woes
- Hexclad experiences significant chargeback losses, exceeding $500,000 annually.
- The issue stems from customers exploiting chargeback mechanisms despite receiving products.
Chargeback Abuse
- Chargebacks, initially meant to protect buyers from fraud, are now widely abused.
- This abuse fuels a "buy" industry, costing merchants lost revenue and employee attrition.
Chargeback Mechanics
- Chargebacks aren't always theft, they were initially a mechanism to protect buyers.
- People abuse the system by claiming stolen cards or unauthorized charges.