Over the 5 years of advertising, I’ve noticed a clear pattern of successful and dead businesses. Dead because they burned all their cash on marketing.

There are a thousand ways to burn cash on marketing with things like brand marketing, awareness campaigns, and so on.

There are only a few ways to actually benefit from advertising when you have a product-market fit.

See, when running ads, you’d typically want to optimize for CAC(customer acquisition cost) or some sort of cost per action. (ideally, an event that correlates with revenue).

The problem is:

1. You only can get CAC down so much and it’s never going to be 0.

2. When you scale your ads, your CAC will go up. Although, it can be slightly offset by creative/offer/funnel testing)

So what’s the solution?

Put a higher focus on increasing your customer lifetime value instead of lowering your CAC. There’s unlimited upside in LTV.

1. Find a product/offer that you can use to acquire your ideal customers for as cheap as possible. And run ads for it.

2. Create a system to upsell them new products/offers to increase their lifetime value.

There are many ways to implement this but here are 4 ways to do it:

1. Sell an offer that leads to the highest value customers & optimize your retention funnel to increase the value even more.

2. If you’re selling b2b subscription software, sell a course on the front end and then sell your software in it.

3. Free lead magnets (e-book, mini-course, template, free trial). It must be so good, typically people would pay money for it. Upsell the lead magnet prospects via email, SMS, warm calls, and events. Get them into your content ecosystem (socials/YouTube) so they can buy when they’re ready.

4. Get your ideal customers into your free newsletter. Same concept as above but takes consistent effort to maintain it.

Hope this was valuable to you. Let me know if you’d like to dive into the specifics of any of these.

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