Alex Hormozi: 6 Hacks To Make More Money [Increase LTV] Without More Customers

The video is about 6 hacks to increase lifetime value (LTV) and make more money without acquiring more customers, with the first three hacks being increasing the price, decreasing the cost, and increasing purchase frequency.

This video by Alex Hormozi was published on Apr 20, 2021.
Video length: 11:14.

In this video, Alex Hormozi discusses six ways to increase lifetime value (LTV) and make more money without acquiring more customers.

He defines LTV as lifetime gross profit and explains that it can be increased by increasing prices, decreasing costs, increasing purchase frequency, upselling, cross-selling, and implementing a loyalty program.

Hormozi emphasizes the importance of understanding these strategies to grow a business and increase profitability.

• Alex Hormozi shares 6 hacks to increase lifetime value (LTV) and make more money without acquiring more customers.
• Two ways to grow a business are to get more customers or make those customers worth more.
• Lifetime value is defined as lifetime gross profit (LTGP), which can be increased by increasing the price, decreasing the cost, and increasing purchase frequency.
• The six hacks to increase LTV are increasing the price, decreasing the cost, increasing purchase frequency, upselling, cross-selling, and increasing the lifetime of the customer.
• Upsell and cross-sell are different types of sales that can increase LTGP and make customers worth more.
• Pricing is one of the most underutilized levers in business, and businesses should model mature businesses that have gone through rapid growth and sustained success.
• Downselling customers by offering a lesser version of the product or service or referring them to another business and getting a kickback can also increase LTV.

6 Hacks To Make More Money [Increase LTV] Without More Customers - YouTube

Introduction

• Alex Hormozi is an entrepreneur, investor, and CEO of Acquisition.com.
• The video is about 6 hacks to increase lifetime value (LTV) and make more money without acquiring more customers.
• The first three hacks are increasing the price, decreasing the cost, and increasing purchase frequency.

Defining Lifetime Value

• There are two ways to grow a business: get more customers or make those customers worth more.
• Lifetime value is defined as lifetime gross profit (LTGP).
• LTGP is the gross margin that comes in, not net profit.
• Understanding LTGP is important to know all the different ways to get more customers and make them worth more.
• LTGP can be increased by increasing the price, decreasing the cost, and increasing purchase frequency.

Increasing LTV: 6 Hacks

• The first hack is to increase the price, which can create allure and put the product in a different category.
• The second hack is to decrease the cost by investing in technology, processes, or outsourcing.
• The third hack is to increase purchase frequency by getting customers to buy again and again.
• The fourth hack is to upsell customers by selling the same thing but a more valuable version.
• The fifth hack is to cross-sell customers by solving an adjacent need.
• The sixth hack, which is the most powerful, is to increase the lifetime of the customer by extending their lifespan or usage of the product.

6 Hacks To Make More Money [Increase LTV] Without More Customers - YouTube

Upsell and Cross-Sell

• Upsell is selling the same thing but a more valuable version.
• Cross-sell is solving an adjacent need.
• Upsell and cross-sell are different types of sales and can be more nuanced in how you think about your business.
• Upsell can be small to big or better of the same, while cross-sell is selling a burger with a coke or fries with a soda.
• Upsell and cross-sell can increase LTGP and make customers worth more.

Increasing Lifetime Value (LTV)

• Increasing the price of the product or service.
• Decreasing the cost of fulfilling the product or service.
• Increasing purchase frequency by getting customers to buy more often.
• Upselling customers by offering better versions of the same product or service.
• Cross-selling customers by offering the next natural need that the customer is likely to have.
• Downselling customers by offering a lesser version of the product or service or referring them to another business and getting a kickback.

The Power of Pricing

• Pricing is one of the most underutilized levers in business.
• Most businesses determine their pricing by looking at the marketplace and taking an average.
• Small businesses often think like small business owners and don't model big businesses.
• Look at the pricing models of mature businesses that have gone through rapid growth and sustained success.
• Don't model small businesses or businesses with market penetration strategies.

Increasing Lifetime Gross Profit

• Pricing is the most important lever to increase lifetime gross profit.
• Increasing the price of a product or service can double or triple the lifetime gross profit of a business.
• Many people have limiting beliefs around increasing prices, but it is a great opportunity for growth.
• Other strategies to increase lifetime gross profit include decreasing costs, increasing purchase frequency, upselling, cross-selling, and improving customer retention.
• By focusing on increasing the value of existing customers, businesses can make more money without acquiring more customers.

Watch the video on YouTube:
6 Hacks To Make More Money [Increase LTV] Without More Customers - YouTube