The Game with Alex Hormozi - 8. The Three Levers of CFA | $100M Lost Chapters Audiobook

Episode Date: November 14, 2025

Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Wanna scale your business? Click here.Follow Alex Hormozi’s Socials:LinkedIn  | Instagram | Facebook | YouTube  | Twitter | Acquisition 

The three levers of CFA. So you're telling me, we can get paid to make money. Sign me up. Young me to older me. Lost chapters author note. Same thing here, too many math questions from the sample readers, and everyone got scared with math, so I ended up cutting it, but I love this chapter.

To grow a business, you can either get more customers or make them worth more. To grow our business, we do both. But there's one more variable I care about, speed. In other words, I don't just care that a business grows. I care how fast it grows. And if we're smart, we can have it all. We get more customers, we make them worth more and do it fast. And those three elements create the three levers of CFA. Number one, get more customers, aka lower the cost of acquiring customers, lower CAC. Number two, make them worth more, aka increased lifetime gross profit, increased LTGP.

Number three, do it fast, aka decrease payback period. Decrease PPD. CFA level one. Get more customers, aka lower the cost, of acquiring them. To get more customers, you need to spend more in advertising, or lower how much it costs you acquire a customer, KAC. And the lower it is, the better. You find it by adding the money you spend on advertising, sales, and their supporting activities divided by the number of customers you get. Example, you pay a content producer $10,000 a month. Each month you acquire 10 new customers from the content they make. KAC equals $10,000, divided by the 10 customers required, equals $1,000 per customer.

But how much money you can spend to acquire customers depends on how much each customer is worth. The more customers worth, the more customers we can get. So, CFA level 2. Make them worth more, aka increase lifetime gross profit. So to get more customers, we spend more money on advertising. But to spend more money on advertising,

we need to make more money from the customers we have. Which brings us to gross profit, GP. This is how much you make from a customer after factoring in the cost of giving them the thing they bought. You find it by subtracting the price customers pay for the thing minus the cost of fulfillment. The higher it is, the better. Product example. I sell a widget for $100.

It costs me $20 to make and ship the widget to the customer. So gross profit equals $100 the price minus $20 of the cost, which equals $80. Service example. You sell 10 service packages at $1,000 each. You pay one employee $2,000 to service those 10 packages. Total gross profit equals $10,000 sold, minus $2,000 of cost, which equals $8,000. The gross profit per customer is now $8,000 divided by the 10 customers, which equals

$800. If we make more money from each customer, we can spend more to get them. So we want to make as much money as we can, as fast as we can. CFA lever 3. Do it fast. Decrease payback period. Lowering cac and raising GP doesn't happen in a vacuum. It happens in time. If a customer pays for themselves today, you get another one tomorrow.

If a customer takes 30 days to pay for themselves, you can get another one in 30 days. Which would you prefer? The first one. Main reason. You can go 30 times faster. In the real world, speed matters. The technical term for this is payback period. In other words, how long it takes for your gross profit from a customer to exceed the cost you spent to acquire them.

Math-wise, it's when GP is greater than KACC. Bottom line. The rest of this section shows how to make GP as high as possible and KAC as low as possible, as fast as possible, a.k.a. short payback period. The lower your cack, the faster you break even. The higher GP, the faster you can break even. Get cash flow and grow. And we do both fast.