What Is The Law of Inverse Profitability™?

In this episode of Perpetual Traffic, Ralph and Kasim discuss the importance of customer acquisition and how to make more money with less profit. They delve into the concept of lifetime value customer (LTV) and cost per acquisition (CAC), which are crucial data points for determining profitability ratios. They also touch on the law of inverse profitability, which states that businesses cannot scale if they still want a high net operating income. They provide examples from companies like Tesla and Apple to illustrate their points. Additionally, they share their own experiences with testing new theories on themselves and discuss the benefits of organic social media over paid traffic. Overall, this episode offers valuable insights for businesses looking to increase revenue and profitability. In This Episode, You'll Learn:00:00:00 - Live Meetings On Air: Engage With Your Audience in Real Time00:04:03 - Understanding Earnings Before Interest, Taxes, And Amortization (EBITA) For Business Growth00:07:21 - The Power Of A Botched Launch: How A Free Book Led To Viral Success00:10:41 - The Collaborators Behind A Bestselling Book: Insights From a Publishing Expert00:13:50 - Customer Acquisition: The Lifeblood Of Your Business00:16:51 - The True Cost Of Marketing: Beyond Ad Spend00:20:22 - The Power of Organic Social Media: Testing Its Effectiveness on Lead Generation00:24:35 - Impressed with Apple's Real Estate and Overhead Costs: Lessons for Business Owners

Links and Resources:Three ways to grow your business - Jay AbrahamThe Top 3 Most Important Business Numbers YouTube VideoThe Law of Inverse Profitability™ YouTube VideoEpisode 106: How Much Can You Afford to Pay to Acquire a Customer?Episode 299: New Customer Acquisition: How Much Can You Afford to Pay?Tiereleven.comSolutions 8 Perpetual Traffic SurveyPerpetual Traffic WebsiteFollow Perpetual Traffic on TwitterConnect with Kasim on Twitter and Connect with Ralph on LinkedIn

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