Hey, it's Tim here...
There’s a simple math problem that can make or break your business: LTV vs. CPA.
Once you understand this, everything else starts to click.
Let’s break it down.
What’s LTV?
LTV (Lifetime Value) is the total amount a customer will spend with your business over time.
For example, if a customer buys a $20 product today, and then a $30 product later, their LTV is $50. Add up every dollar they spend with you over time—that’s their LTV.
What’s CPA?
CPA (Cost Per Acquisition) is how much it costs you to get a new customer. It includes money spent on ads, marketing, and time.
For example, if you spend $100 on ads and gain 10 new customers, your CPA is $10. Divide the total spent by the number of new customers—that’s your CPA.
The Key Rule: LTV > CPA
If your LTV is higher than your CPA, congratulations—you’re profitable! If it’s lower, you’re losing money.
Why it Matters: If your LTV (what a customer spends) is more than your CPA (what you spent to get them), you're profitable. If it’s less, you're losing money.
So, What’s the Catch?
The biggest mistake new marketers make? Focusing on CPL (Cost Per Lead) and CPC (Cost Per Click) without knowing if those leads turn into real paying customers—even for a low-ticket, high-value offer like a book.
Sure, CPL tells you what it costs to get someone interested.
But interested isn’t the same as paying, is it?
That’s why CPA (Cost Per Acquisition) is the one metric to watch. CPA shows the true cost of acquiring a paying customer and helps you compare it to their lifetime value.
Get that right, and you’ll see how profitable your leads really are.
You can have all the leads in the world, but if they aren’t turning into customers who actually buy from you—even just a low-ticket offer—what’s the point?
The Power of a $5 Customer
Here’s where my book, The Automatic Lead Machine, comes in.
For just a few dollars, someone buys my book. It’s not much, right? But that purchase turns them into a customer. That’s the magic.
A lead is just someone interested. A customer is someone who has actually paid you, even if it’s only $5.
This is powerful because they’ve taken that first step, which makes them more likely to buy again.
Once they’ve spent a few dollars with you, what’s stopping them from spending more if I offer them more value?
That’s why the LTV of a book buyer isn’t just $5—it’s much more.
The book is just the start of the relationship.
It’s the key to long-term growth.
Want to ensure your lead generation efforts are scalable? Read more about the three elements needed to scale any business here.
Why a Simple Book Changes the Game
Books aren’t just products—they’re tools.
My book, The Automatic Lead Machine, doesn’t just make a $5 sale.
It brings in people who trust me enough to spend money, which leads to higher-priced offers later.
And the best part?
Once that first customer is acquired, the cost of future sales is almost zero.
That’s where the LTV really grows.
The Formula to Scale
Here’s the ultra-simple formula:
- Acquire customers with a low-cost offer (like a simple, short book).
- Build trust by providing genuine value.
- Offer more to these customers, increasing their LTV.
- Make sure the LTV is always higher than the CPA.
That’s it.
No complicated funnels. No chasing leads who never convert.
When you get the LTV vs. CPA math right, your business becomes scalable, reliable, and profitable.
Take Action
If you’re tired of spending on ads and getting leads that don’t buy, let’s change that.
Get my book, The Automatic Lead Machine, and see firsthand how a single, simple, short book can transform your lead generation.
It’s only $5, but the value of what you’ll learn—and what you’ll earn from applying it—will be exponential.
Best,
Tim