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Alright, so what I want to show you is how to reverse engineer pricing, A, and B, how

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you can look at how to provide more value outside of the box.

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Welcome to the Jim Seekers podcast where you talk about how to get more customers, how

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to make more per customer, and how to keep them longer, and the many failures and lessons

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that we have learned along the way.

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I hope you enjoy and subscribe.

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Hey, what's going on everyone?

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Are you having an awesome, a terrific Tuesday in your week?

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I wanted to talk about a topic that, honestly, in almost every time I have some sort of

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consulting day or coaching one on one, especially with higher level business owners, you know,

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doing five, 10 million a year plus, this just inevitably gets brought up.

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And so I wanted to dive into this a little bit more for those you don't know what the

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value equation is.

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It's something that I have not seen anywhere else.

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And so this is just kind of like how I view and how I put it together, and it really

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works well.

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So what I want to show you is how to reverse engineer pricing, A, and B, how you can

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look at how to provide more value outside of the box.

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So the value equation is four pieces to it, two on the top part of the equation, two

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on the bottom part of the equation.

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The top part of the equation is two pieces.

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One is perceived outcome.

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So this is the plus side.

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This is the big part.

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So if this were an equation, this is what's going to generate the upside.

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So the perceived outcome that a prospect has of what they think they're going to achieve

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by buying your service, information, product, whatever, right?

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And so it's like for fitness, or I'll tell you all four, and then I'll give you different

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examples.

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So that would be the perceived outcome and fitness would be energy, looks sexy, feel

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good, great body, right?

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The second part of the top of the equation is the likelihood of actually achieving that,

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right?

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So that's whether the prospect believes that they're going to achieve this outcome, right?

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So that's where a lot of times we as marketers, etc., salespeople as we try and add in lots

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of social proof to increase someone's conviction and therefore charge a higher price, get more

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value, right?

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I would say the first half of my career, probably more than that, the first 70% of my career

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are focused on the top part of the equation, right, which is big perceived outcome, lots

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of increasing likelihood of success of achieving the outcome, right?

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That should be it, right?

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But it turns out there's actually two more pieces of the equation, right?

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You have the bottom half, this is the detractors, these are the things that pull away from the

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value of the price that you're able to charge, right?

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So the first part of the detractor is the delay, all right?

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So that's the amount of time between when they give you money and when they're actually

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going to experience the perceived outcome and they think they're going to actually achieve

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it, right?

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So let me give you just two different examples, an example there would be like fitness,

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right?

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You saw someone on a transformation program, whatever, realistically we know and they know

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that it's going to take them six months, 12 months to really achieve the look that they

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actually want and maybe even then they still haven't achieved it, so massive time delay,

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right?

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And so that's number one on the detractor side, yeah, imagine if you could, they could

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pay and you snap your fingers and they have the, they have the, the, the body they want

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right in front of you, do you think you'd be able to charge more?

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Hell yeah, right?

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Now, the third, sorry, the fourth piece of the equation, so the second detractor from

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the equation is the actual, the effort that they have to put in and you can put time and

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effort in there because time as a function of how much effort they have to put in and

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not time as a delay, right?

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And so in a fitness example, it would be, all right, you can't eat the foods you want,

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you have to wake up early, you have to be sore, you can't eat with your family anymore,

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right?

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These are all the things that they have to, these are the sacrifices that they have to

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put forth in order to achieve the pursuit outcome, right?

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Now, so if we're looking at this equation and we're looking at it with a fitness example,

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right?

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And I'll go through all four real quick, just as a recap, perceived outcome, big, sexy,

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feel good bikini, right?

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Likely to success, let's be real, kind of low, right?

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Do we really think that they're going to achieve the big bikini?

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We're going to try and get them pumped up, but we also know what percentage of people

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fall off, right?

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And what percentage of people actually make it all the way there?

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Very, very slim and they know that too.

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We're trying to delay their disbelief during the sale, but the reality is that a lot of

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people don't succeed, right?

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Now, detractor, it's going to take months and months and months, so that's a negative.

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And then how much effort they have to give up all their time and effort and change their

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entire lives, right?

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Which is why for fitness, for example, people don't go onto websites and one click order

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a $2,000, $3,000 personal training package.

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Could you imagine if that were actually how it worked, right?

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It doesn't work that way, and that's why we have to spend 60 minutes arm wrestling someone

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to get them to take the decision to change their life.

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Because we only have one of the four value pillars in our corner, which is just that we have

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a really good perceived outcome.

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We're going to change your life.

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We're going to transfer, hey, look how you fill your energy, you sleep, you know, everything,

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right?

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But the rest of the four are not that good, right?

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Now, I want to give you two examples that I'm going to talk about how we can use this

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to increase value for you and kind of where I've kind of evolved in terms of how my thinking

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around it.

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So I'm going to give you a different example than fitness, right?

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Let me give you an example around relaxation, all right?

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The same perceived outcome is increased subjective wellbeing, increased happiness, increased

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feel-good feelings, right?

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It's such a perceived outcome.

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Let's say we're going to use meditation, all right?

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So that would be the vehicle that we're using here, perceived outcome is chill, chill,

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great feelings, the likelihood of achieving meditation probably pretty low, right?

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Because let's be real people are really distracted, you have to learn how to do it, you have

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to sit cross-late, like there's effort and skill that has to go into it, right?

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It might take you 60 days before you actually get good at it, right?

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It might take you time to get there.

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And then the last piece is the effort and sacrifice feeling stupid, feeling you can't focus,

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constantly, you know, failing at doing this, all right?

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And so in this equation, you have like one big bonus, one good one, and then maybe like

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a half on the likely of achieving it.

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Time delay might be, you know, 30, 60 days, so it's less than fitness, right?

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But overall, not huge value, right?

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And that's why meditation is not like a massive industry, it's not like as big as weight loss,

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you know what I mean?

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It's just like, it's so, so valuable.

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Now what I want to show you is how if you change three of these other pieces, but you

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keep the perceived outcome the same, how you can massively increase the value of the

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product, right?

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So same perceived outcome, chill, relaxed feelings, right?

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Now let's say we're using XANX as our product, all right?

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Really hit of achievement, right?

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Second part of the equation, sky high, right?

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How confident do I feel that I'm going to feel chill and feel good after I take XANX?

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Virtually 100%, right?

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What's my time delay?

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15, 30 minutes?

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I mean, maybe 10 minutes if you mainline it, I'm just kidding, I'm just kidding.

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But sure, right?

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I don't have to wait a long time for that to happen.

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And then what is my sacrifice, the effort act to put forth?

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Nothing, I swallowed, you know, I drink some water, that's it.

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And so what's the difference, right between meditation and XANX, it's the same perceived

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outcome, right?

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But one of them is a gazillion dollar, you know, pharmaceutical, right?

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And the other one is something that there's really no like main players in the meditation.

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You know what I mean?

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There's no huge economic boom in the meditation space, right?

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There's just not.

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And it's because of this value equation.

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So let me tell you about what I've been thinking about a lot more recently.

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So let's say the first three quarters of the time that I was in business, I focused

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much more on the top side of the equation.

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I focused all my attention on how can I increase the perceived value of the service that

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I'm providing?

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How can I increase the likelihood that their perceived likelihood of achieving the outcome,

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right?

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That's why we have tons of social proof.

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We have, you know, big, like let's say, the gem loss, right?

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I'm going to get you to increase your, you know, revenue by $240,000 to your top line.

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Here's our average revenue per gem.

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Look at the thousand testimonials we have, right?

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All of my focuses up here, right?

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Now when I talk to people who make a lot more money than me and who are a lot smarter than

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I am, I noticed that a lot of them focus on the bottom side of the equation more.

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And so let me give you a tiny math example and then I'll show you how powerful this is.

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So let's say you have something that's a small perceived outcome, right?

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A small big top part of the equation.

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But I make the bottom side virtually zero.

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So I make the time delay almost instantaneous and I make the effort and sacrifice almost

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zero.

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So here's an example of that.

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Netflix did not change what we consumed, right?

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They didn't change movies.

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They didn't change the TV shows.

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In fact, they just put the same shows we're already watching.

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But all they did was they made it instantaneous, right?

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And we had virtually no effort.

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We didn't have to get up to the store.

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We didn't have to go to blockbuster.

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We didn't have to get our, we didn't have to peruse the whole, like we didn't have to

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do any of that, right?

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We could just click it from our phone even and instantly seamlessly consume the things

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that we were already consuming.

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So they didn't change the top side of the equation.

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They changed the bottom side, right?

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And so when I'm thinking about what we're looking at in our business, all of my effort

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has really been put far more towards on the service side.

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How can I decrease the time and effort for someone to achieve the outcome?

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How can I decrease the amount of time it takes them to achieve an outcome?

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And by doing that, you can increase activation, increase lifespan value, et cetera.

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But it overall increases the value of the service or the product that you have, right?

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And so if you think about, like Alan, which is coming out this Friday for our, our

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gym world community, by the way, because I get asked about this all the time, I'm just

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an investor in the business.

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I think it's an amazing product.

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I've helped in the formulation of it, you know, I'm not the sole owner, all right?

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But I think it's awesome.

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And so it's a really big undertaking, it wouldn't just be me.

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So anyways, what Alan does, it's a software that works leads, all right?

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And so let's go through the value equation.

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Real quick, guys, you guys already know that I don't run any ads on this and I don't sell

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anything.

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And so the only ask that I can ever have are you guys that you help me spread the words

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so we can have more entrepreneurs, make more money, feed their families, make better

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products, and have better experiences for their employees and customers.

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And the only way we do that is if you can rate and review and share this podcast.

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So the single thing that I asked you to do is you can just leave review, let's take

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10 seconds or one type of the thug that would mean the absolute world to me and more importantly,

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it may change the world to someone else.

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So the value is needs come in the door, right?

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That's great.

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I get two or three X, my throughput, all right?

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Awesome, right?

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What's my, what's my, shoot, what's the second, I'm forgetting, it's a bottom bar of the

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equation.

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What's the time to lie?

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It's immediate, right?

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Like as soon as you hook it up, you don't have to do that anymore, right?

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And then the effort and sacrifice, what it does is it removes all of the effort and

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all of the sacrifice that is typically customary with working leads, right?

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And a lot of that comes from the interruption cost, right?

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It's not that, like because on average, it takes about an hour to work lead end to end

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if you worked it fully for 30 to 60 days if you were to do it the right way, right?

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The reality is no one does that, most people don't do it, okay?

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But beyond that, the biggest cost is that the moment you get a lead, it becomes a 10 out

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of 10 priority in your life because you could be writing it in voice, you could be doing

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a contract, you could be writing on meal plans, you could be talking to a customer, whatever

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it is, it immediately takes your attention, becomes priority number one or it should be,

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right?

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Because you have a hot lead that's right there.

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And so what it does is it, it's the cost of switching tasks.

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And so if you do, and they've done tons of research on this, if you have two tasks that

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you have to, you task and task B and it takes you 10 units of time to do each, right?

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If you are asked to do both of them together, it would not take 20 units of time, it takes

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70 or 90 units of time depending on the person, simply by asking them to do both at the

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same time.

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And us as business owners, what we end up doing is working all day and getting nothing

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done because we're constantly switching between tasks.

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And so the primary cost of something like an interruption-based issue like working leads,

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phone calls, etc, is that it destroys the productivity of the person during the day, right?

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It's also impossible to manage someone else, especially at the pay rate that usually

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have to pay someone to do that for them to do a sustainable job.

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And make sure that for every single week for the rest of the year, you always have sufficiently

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to flow for them because God forbid you have somebody who's supposed to work leads and

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you're not running a campaign right now, right?

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And this person is literally distracting overhead and providing your value.

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All right.

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And so my effort now, and even the same thing on the done-for-you-mill side, has been how

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can I make things seamless, right?

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Like, I haven't changed food, right?

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Like, you know what I mean?

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The risk is great.

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Don't give me wrong.

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The food tastes great.

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It's amazingly well-packaged.

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All of that stuff, right?

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It's non-GMO, etc.

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But the real value comes from the pack that it removes pain.

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It decreases the bottom side of the equation.

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And if you think big picture about how you can provide value, there's a lot of opportunities,

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like most everyone focuses on the top side, myself included, of the equation.

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Let me promise more.

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Promise bigger.

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Tell people how they're like, you know, guaranteed like all this stuff, right?

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Where we're trying to increase their perceived likelihood of achieving the outcome, right?

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Those two top sides of the equation.

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But the more I see the big companies, the billion dollar, the 10 billion dollar companies,

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all I keep seeing is how they focus on removing barriers, on how they focus on removing friction

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from the experience of a customer.

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Like Amazon, like, they've just made it so seamless for you to purchase something with

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one click on a whim that by doing so, they've created more value than basically any other

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company out there, right?

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And it's not that even, they didn't even change what we're buying.

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They didn't.

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They literally didn't change what anyone was buying.

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They just changed how easy it was for us to do it.

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And so when I think about gym lunch and I think about how we can provide more value, right

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now all of my focus is how can I get people, how can I shrink the timeline that I can

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get someone to resolve and how can I get them to do fewer things, consume fewer videos,

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obtain fewer skills to achieve the result.

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And if you could frame this with any business, if you're doing weight loss, you're like,

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okay, how little can I get them to do?

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How few skills can I get them to acquire?

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Okay, can I take care of their meals for them?

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All right, that's done.

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When they show up, how can I get it so they don't have to think about anything when they're

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here.

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They don't have to ask the instructor again how to do XYZ.

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Like maybe even not show up to the gym if you're running a hybrid model.

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How can I remove the obstacles that create friction and create pain for a prospect?

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When you do that, then you can increase the value and the price ironically.

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And so this is where it gets kind of interesting because if you look at a math equation, it

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doesn't matter what you have on the top side of the equation, but if you divide it by zero,

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it's infinity, right, anything divided by zero is infinite if you guys know that from math

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class, from eighth grade math.

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And so for me, that's been really profound because getting the top side to infinity is really,

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really hard.

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But focusing on decreasing the obstacles and the friction that a prospect has to go

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through gives you a very tangible way to provide value by removing pain and removing friction.

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And so it's been one of the things that when I'm talking to, you know, hire a little,

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you know, whatever business owners, it's like, right now you have too much friction.

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Right now it takes too many things for your customers to be successful, right?

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And so part of the reason that it took so long for us to get Alan out was because we had

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to streamline the onboarding process for the people we're going to be coming in, right?

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So that we can standardize the variables that we've now identified.

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There's a ton of variables that affect show rates, which are mind blowing.

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But how can we standardize that process so that it becomes seamless for this person so

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that once they're done, they're onboarding experience.

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And we know this that there's only 14 days.

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If someone sticks with Alan for 14 days, and that's just because it takes 14 days to ramp

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up, right?

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If someone passes the 14 day mark, they stay.

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They don't leave because they never want to work leads again, right?

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But it's that 14 day period where we have to remove as much friction as we possibly can

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to increase the value of what they're receiving, all right?

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And so anyways, that's where all of my focus has been as CEO and I just wanted to share that

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with you guys.

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So maybe as a different way to potentially consider providing value or even explaining value

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to a prospect, sometimes everyone promises the same things, you know, I mean, like if you

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look at the gym space, right, there's a zillion people who promise the same things.

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So fill your gym and make more money, go work less, blah, blah, blah, blah, right?

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It's the same promises, right?

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Now everybody's got testimonials, right?

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Some of us have more, but everybody's got testimonials, right?

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So then what other ways can you differentiate value?

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And I think one of the biggest opportunities, especially in the service space because most

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people don't think this way, is looking at the bottom side of the equation because there's

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a ton of opportunity there.

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And that's ultimately what, you know what, I'm going to, I'll tell you a fun little

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side of this story.

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So I had a business owner who actually sells the gym owners, right?

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So most people would see like, this is a competitor of yours, right?

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And they do about 300,000 a month and good guy, you know, I mean, it's for everyone

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who's like worried about the small ocean or whatever, like, just don't be stupid.

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You know what I mean?

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Like I'm helping this guy who's supposedly soliciting my members, right?

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And within the first hour, I was able to get him to basically admit he's like my product

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isn't, isn't as good, right?

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And I was like, I know that, but I'm glad that you've said that, right?

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And the fundamentally, his cost of acquisition was the same as RS was, all right?

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So our cost of acquisition, his sales and marketing was, was, was fine, right?

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It was the same as RS.

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The difference was the lifetime value of a customer in his business was $80, 300, less

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to value a customer in our business was 42,000.

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That was the difference.

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We made more per customer because we keep people longer and we keep them making money

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longer.

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And a lot of that comes from how can we squeeze this time that I get someone to win?

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How few things can we get them to do to still have this great result, right?

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Reality is that most people don't do, most people are really fucking consume the legacy

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portal.

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Like, 90% of people who buy our stuff don't even consume all the videos.

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If I'm going to consume 25% of the stuff and actually act on it, they win and they're

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in front, right?

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And so that is everything like whenever we make a new like gym left portal update, we try

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to make it shorter, not longer.

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We don't try to add videos, we try to take away videos, right?

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Because how can we increase people's or we decrease the friction and increase their

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speed and money?

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Because if we can work on the bottom side of the equation, the promise, which is always

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the same, the overall value of the product will go up.

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And so that is where all of our focus is the team on, that's where all of my attention

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goes as CEO and it also gives you an amazing differentiator for you to focus on how you

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can provide value, but also how you can explain the value that you provide to your prospects

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and your marketplace differently is by focusing on the friction and the obstacles that you

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remove, rather than yet again, making a huge promise like everyone else does because

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they're not brutal.