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.
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
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
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
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?
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 😎
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.
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.
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!
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?!
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
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.
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!
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.
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.
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 😉
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
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.
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 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 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
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!
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
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
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.
@@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.
I love love these new videos without the stupid, annoying and distracting music in the background. Alex, please NEVER DO educational videos with music in the background- thank you! I absolutely HATE educational videos with music in the background. it's hard enough that you have to focus on the lesson, concepts you re trying to learn, but to have some music in the background makes it impossible for me to focus and concentrate on the content bc i love music and I'll be distracted by it during any talk. NO MORE BACKGROUND MUSIC, PLEASE AND THANK YOU. 🙏
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!
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 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! ❤😊
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.
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. 😂
"This isn't an opinion problem it's a math problem" - Gold !!
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
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
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.
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 💪🏼
PLEASE MORE OF THIS TYPE OF CONTENT!!!
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
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.
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?
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 😎
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!
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.
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 value of this content is crazy
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!
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?!
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
Definitely watching this video 10 times a day, major value
The Fundamentals are so important
I LOVE the math oriented side(s) of these videos.
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
“I’ve already watched this 7 times. It’s business music!” - BB
I love that you're throwing in more and more examples from the ecommerce world and not just service business. Please more!
A combination of education+effective entertainment is neccessary. Reverting to linear only gets so far.
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.
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!
HELL YES!!!! HORMOZI UPLOADS I DROP EVERYTHING
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.
Everything makes so much sense now.
Please make more detailed vids like this.
On my 6th watch.
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
I can't thank enough, thank you Alex. This is THE GAME.
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.
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 love how many other "boring businesses" he talks about like glass repair/painting
Hi Alex, I love money/business math! Please don't apologize and do more of it! Keep it up! You the GOAT
I have seen hundreds of your videos and this one its the most impactful for me so far.
Thank you.
“When you boil hot water and sell it for 6 bucks you make a lot of money“ 😂
These lecture/conversation style videos are amazing. Thank you for them!
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
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.
Probably one of your best videos. I couldn't agree more with what you are sharing.
More of these content please!! Love getting into the hard numbers! 😆
An amazing summary as always! Thank you infinite times for sharing your overviews and views! Sending you a lot love, respect and thankfullness! 🧡
I'll watch again when I'm not driving. This is a game changing lesson!
Content just got better
I think you should be more popular
This is unbelievably valuable. Thank you, Alex. Appreciate you big G.
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 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?
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
The granularity of this info is insane!
So good.
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!
most helpful video on growing early business on the internet right now.
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
Please please please do more vids that are dense like this. Insane value and truly so helpful!
Anyone else hear this audio hiss?
Love Alex and his content!
A condensed video on all business math would be awesome
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
Great stuff 👍. Thank you Alex & team for sharing that much value for free, on a recurrent basis.
Man, Alex just keeps blowing my mind every time I watch him. Jesus, when will he stop delivering the keys to the kingdom?
Love the examples of real businesses
great advice, great explanation, great strategy (and great format, love no background music)
Pure gold - as usual. Thanks, Alex.
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 was the most info-dense video so far. Thanks man
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.
I love love these new videos without the stupid, annoying and distracting music in the background. Alex, please NEVER DO educational videos with music in the background- thank you! I absolutely HATE educational videos with music in the background. it's hard enough that you have to focus on the lesson, concepts you re trying to learn, but to have some music in the background makes it impossible for me to focus and concentrate on the content bc i love music and I'll be distracted by it during any talk. NO MORE BACKGROUND MUSIC, PLEASE AND THANK YOU. 🙏
Been waiting for this video 🔥🔥🔥 no one has explained it better than Alex
Thank Alex a really learn from you much then I learned from anyone else's in any industry ❤
More of this type of content please!
11 pages of notes. Time to get to work. Thanks Alex!
This one is pure gold Alex, great insights
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
start with the service that has the lowest LTV:Cac ratio then behind it upsell the rest..
TOP TIER business video. I've watched twice today time to implement today thanks Alex
i cant believe this information is free
we have no excuse
Love it! Studying the transcript line by line
Keep up this style so good
Alex literally dropping gold bars for us
this content is fire. what a good pivot.
Freaking awesome!!! Alex you are solid in business!! Thanks for the inspiration!
I watched the first vid where you spoke about this ratio a week ago. So this reminder was nice
I don't run a business, but people out there thinking LTV can be a valid metric without first removing costs, is pretty wild.
These business videos are the best content
We need more of this!!!!
Eddie Maalouf and Ashton Shanks drilled this at there mastermind recently.
Mom, wake up!! Alex posted a new video
This is GOLD!!!!!!!! SERIOUSLY!!
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!
If there was a Hormozi comedy clip collection this would have to go into it: 4:08 - 4:19
You are a major inspiration to me. Major game changer. Thank you so much! ❤
Pure GOLD. Thank you 🙏
Amazing video, wish he would talk about the more common 2:1 or 4:1 ecom or lower tier businesses not just the insane revenue businesses
I know realized everything revolves around LTV:CAC even brand, product, and offer.
Hormozi math is what we should have learned in school.
Great lessons, thank you for sharing…ps, I like the delivery format too 🤙
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)