8. The Three Levers of CFA | $100M Lost Chapters Audiobook

In this episode, the speaker introduces the concept of the three levers of business growth, which are crucial for scaling a company effectively. The first lever is to acquire more customers, which involves lowering the cost of customer acquisition (CAC). The speaker explains this through examples, detailing how to calculate CAC by dividing the total advertising spend by the number of new customers gained. The lower the CAC, the more profitable a company can be.

The second lever focuses on increasing the worth of each customer, defined as lifetime gross profit (LTGP). The speaker shows that to afford acquiring customers, businesses must generate more revenue from existing customers by maximizing gross profit, calculated as sales revenue minus costs.

The third lever highlights the importance of speed in business growth, specifically in reducing the payback period (PPD). The quicker the gross profit from a customer exceeds the CAC, the faster the business can scale. The episode reinforces that achieving low CAC and high GP efficiently contributes to cash flow and overall growth.

Ultimately, the discussion encourages listeners to optimize each lever—acquiring customers, increasing their value, and doing it quickly—to ensure sustainable business growth.