Part 6: Run Paid Ads | $100M Leads Book
The Game with Alex Hormozi
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Measuring Paid Ad Efficiency: LTGP to CAC Ratio
Measuring paid ad efficiency is important for running a successful business. It involves comparing the lifetime gross profit (ltgp) of a customer with the cost to acquire that customer (cack). By expressing this ratio as ltgp to cack, you can determine if your advertising is profitable or if you're losing money. A good ltgp to cack ratio is three to one or higher. When this ratio is achieved, businesses can scale and thrive. Remember, ltgp is the actual money used to cover expenses and run the business.
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