Last week, I saw a really insightful post from Alex Becker, the founder of Hyros. Now…
Before I dive into the post, a disclaimer:
I think Hyros is an outstanding software with many smart applications. However…
Alex, the man behind this software, meh.
Not a fan.
Many of his recent posts bash on how bad it is to focus on personal branding (“vERy fEW PEoplE wILl mAKe It”), intentionally overlooking the even lower success rate of building a massive, billion-dollar, faceless corporation.
Like…
You do know there are so many MORE micro-influencers than SP500, right? Heck, Hyros wouldn’t even EXIST without Alex’s personal branding fueling it from day 0.
In addition…
The way Alex despises the info product market these days feels so much like…
An entrepreneur who finally succeeded in building a mega startup by living in his father-in-law’s garage… surviving off his girlfriend’s salary… but dumping his girlfriend for a supermodel the moment he earned his first bucket of gold.
Let’s not kid ourselves. Hyros was BORN OUT OF the money Alex milked out of his info product (and personal branding).
BUT –
I think his recent post is worth studying.
(Important Lesson: You can disagree with someone… but still learn from them.)
I’m not going to repurpose the whole post here…
But the summary is:
“If your ad stops being profitable at X ad spending… the reason is because your competitors’ ads are more PROFITABLE than yours.”
It is not because of the acquisition cost.
It is not a traffic problem.
It is an EARNING problem.
If you are stressing over ad costs… it is simply because you are not making enough when a customer enters through the door.
And no, I don’t mean AOV.
I mean, how long… how often… a customer will return to buy from you again and again (and again).
CLV — Customer Lifetime Value
This is also one of my core beliefs in marketing.
When you maximize earnings, you get leverage over everything else.
You have more margin.
You are less dependent on the ad platform.
You have more budget for ads.
In short, you solve every single marketing problem when you maximize your earnings. The question is… how?
(hint: email)
To be continued…
– WYH