Episode 474: 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 Time
  • 00:04:03 – Understanding Earnings Before Interest, Taxes, And Amortization (EBITA) For Business Growth
  • 00:07:21 – The Power Of A Botched Launch: How A Free Book Led To Viral Success
  • 00:10:41 – The Collaborators Behind A Bestselling Book: Insights From a Publishing Expert
  • 00:13:50 – Customer Acquisition: The Lifeblood Of Your Business
  • 00:16:51 – The True Cost Of Marketing: Beyond Ad Spend
  • 00:20:22 – The Power of Organic Social Media: Testing Its Effectiveness on Lead Generation
  • 00:24:35 – Impressed with Apple’s Real Estate and Overhead Costs: Lessons for Business Owners

Links and Resources:

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