This ONE Equation Will Make You RICH

Summary

• To sell valuable things, I suggest you need to understand what components create more or less valuable products or services.
• Value can be enhanced by adding scarcity, urgency, bonuses, guarantees, or resonant naming with your avatar, and we're focusing especially on guarantees.
• I spent time developing an equation to define value for products we create in different companies, focusing on repeatable success.
• The four components of the value equation are:
  • Dream Outcome: Ensure what you're selling is something people actually desire.
  • Perceived Likelihood of Achievement: Buyers must believe they can achieve the promised outcome.
  • Time Delay: The time it takes for the customer to receive the promised outcome should be minimized.
  • Effort and Sacrifice: Reduce what customers need to start doing and stop doing as much as possible.
• Using the weight loss industry as an example, I demonstrated how the dream outcome (losing weight) is affected by perceived likelihood, time, and effort/sacrifice.
• To create value, increase the promised outcome and perceived likelihood while reducing the time delay and effort/sacrifice required from the customer.
• Operational effectiveness to reduce time and effort for the customer often creates a stronger competitive edge than simply promising more or showcasing testimonials.
• Keep refining your product to provide results faster and with less effort from the customer.
• The process of creating value involves identifying and solving the most valuable customer problems at little incremental cost to maximize margin.
• Successfully selling involves overcoming doubt and risk by lowering the threshold for customers to take action.
• I recommend offering different types of guarantees, as they shift risk from the buyer to the seller and can increase sales.
• The four types of guarantees: unconditional, conditional, anti-guarantee (if not offering a guarantee), and implied (performance-related offers).
• For stronger guarantees, stack an unconditional with a conditional based on client success milestones.
• Make your guarantees specific, transparent, and directly related to the outcome the customer wants. Avoid vague guarantees like "results guaranteed."
• Learn from the successful experiences and actions of your best customers to create guarantees and conditions that almost ensure success for new customers.
• Clearly communicating value and structuring guarantees effectively can be employed in marketing and sales for more compelling propositions.
• I advise focusing on the bottom half of the value equation, which includes reducing time delays and effort for the customer, to distinguish your offers and create real competitive advantages.
• You can adapt and apply these principles across various industries to improve the perceived value of your products and increase prices without sacrificing sales.

If you found these insights beneficial, consider exploring my book "100 Million Dollar Offers" for more detailed strategies on creating and selling valuable products.

Video

How To Take Action

I would suggest starting with understanding and defining value for your business. First, think about your dream outcome. Make sure it's something that your customers really want.

Next, focus on making your customers believe they can achieve this dream outcome. If they believe it, they're more likely to buy.

To make your offer standout, try to deliver results faster and with less effort for your customers. Look at your process and see where you can make things quicker and easier for them.

Then, work on how you can reduce their time and effort. Can you make your product or service faster? Can you take away some steps your customers need to do themselves? These changes can make your offer more appealing.

Offer different types of guarantees. Guarantees can make customers feel safer. They know you're sharing the risk of buying. For example, you can offer unconditional guarantees where they can get their money back, no questions asked, or conditional guarantees, where you promise results if they meet certain conditions.

Make your guarantees clear and specific. Tell customers exactly what they can expect. Avoid vague promises like "results guaranteed". It should be something like, "If you don't lose six inches from your waist in 90 days, you’ll get your money back."

Finally, always be improving your product. Pay attention to what works best for your best customers. Use that information to make your product better and your guarantees even stronger.

Remember, it's not just about how great your product is. It's about how quickly and easily your customers get what they want. And, always communicate the value you're offering clearly. That way, you can sell more and at higher prices.

Quotes

"We have to lower it so much so there's so little friction for them to take action with us that they buy"

– Alex Hormozi

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"The competitive moats that exist in the big businesses are on the bottom side of the equation"

– Alex Hormozi

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"Speed is one of the best all-time competitive advantages"

– Alex Hormozi

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"If you can't make an informed decision until you've actually experienced the product"

– Alex Hormozi

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"What we want to do is spell out exactly what our guarantee is"

– Alex Hormozi