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Welcome back to episode three of $100 million offers, the audio edition and

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collab with the game podcast. Today's episode is the most famous chapter that I

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wrote in the book, the value equation, it's probably the most retweeted, the

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most shared, the most posted concept. This concept changed my life and changed

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my businesses and I hope it does the same for you. At the very end I have a

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special call to action that would mean the world to me if you got value from

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this free content. It takes a second, and again it would mean the world.

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Section three, value, create your offer. How to make offers so good, people feel

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stupid saying no. Chapter six, value offer, the value equation. We question all of

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our beliefs except for the ones we really believe in and those we never think

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to question. Orson Scott card. I want to be abundantly clear, the goal should be

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to charge as much money for your products or services as humanly possible. I'm

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talking heinous amounts of money. That being said, anyone can raise their

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prices, but only a select few can charge these rates and get people to say yes.

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From this point forward, you must have been in any notion you have about what's

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fair. Every enormous company in the world charges you money for things that

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cost them nothing. It costs pennies for the phone company to add an additional

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user, except they don't mind charging you hundreds of dollars per month for

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access. It costs pennies to manufacture pharmaceutical drugs, but they don't

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mind charging hundreds of dollars per month for it. Media companies charge

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advertisers a king's ransom for your eyeballs and it costs them next to nothing

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to get you to like kid and photos on social media. You need to have a big

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discrepancy between what something costs you and what you charge for it. It is

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the only way to become unreasonably wealthy. Many entrepreneurs believe that

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charging too much is bad. The reality is yes. You should never charge more than

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your product is worth. Be sure to charge far more for your product and services

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than it costs to fulfill. Think up to a hundred times more, not just two or

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three times more. And if you provide enough value, it should always still be a

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steal for the prospect. That is the power of value. It unleashes unlimited

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pricing and profit power to scale your company. For example, one of my private

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clients whose company I have equity in in our portfolio is in the photography

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space. Over two years implementing the tactics outlined in this book, the owner

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was able to increase the average ticket from $300 to $1,500. That's a 5x

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increase gasp. Even cooler, they now spend less time per customer and have higher

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customer satisfaction. The 5x increase in average ticket, 38x the profit of

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the business. It went from making $8,000 a week in profit to $38,000 per week in

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profit and continues to grow. As a result, the company was finally able to

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continue to scale to multiple locations and provide meaningful work to great

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employees. And a fun benefit. We were able to donate even more money to children's

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charities, which is something the owner and I have in common, almost a million

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dollars at the time of this writing. But none of that would have been possible

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without figuring out what people valued most, tripling down on it and ruthlessly

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eliminating everything else. A 5x price increase may seem crazy to you. But

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clients voted with their dollars that what the company provides now is far

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better than what it did before. Cracking value opens up the world of unlimited

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profit, impact, and possibilities. Those who understand value are the ones who

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will be able to charge the most money for their services. The good news is that

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there is a repeatable formula that I have created. I've never seen it displayed

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elsewhere to help quantify the variables that create value for any offer. I call

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it the value equation. Once you see it, you can never unsee it. It will operate

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in your subconscious running in the background, calling out to you. It's a new

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lens through which to see the world. The value equation. Dream outcome times

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perceived likelihood of achievement divided by time delay times effort and

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sacrifice equals value. Free gift number four, value equation bonus tutorial

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and free downloads. If you want to know how I break down businesses core offering

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into something more valuable, go to acquisitions.com forward slash trainings,

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forward slash offers, and select the value equation video to watch a shirt or

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tearyo. I also included downloadable checklist. My goal is to gain your trust and

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deliver value in advance as such. It's absolutely free. Enjoy. So as you can

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see, or here, there are four primary drivers to value. Two of the drivers,

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which are the top two parts of the equation, you will seek to increase. The other

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two on the bottom of the equation, you will seek to decrease. So one, yay, the

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dream outcome, our goal is to increase. Two, yay, perceived likelihood of

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achievement, our goal is to increase. Three, boo, perceived time delay between

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start and achievement, our goal is to decrease. Four, boo, perceived effort and

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sacrifice, our goal is to decrease. If you notice the questions in the last section

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that my father asked me, you'll see the corresponded with these pillars. What will

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I make dream outcome? How will I know it's going to happen perceived

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likelihood of achievement? How long will it take? Time delay? What is expected of

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me? Effort and sacrifice. Get the bottom to zero. In the beginning of my

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career, I focused all my attention on dream outcomes and the perception of

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achievement, social proof, third party edification, et cetera. In other words, the

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top side of the equation. That's where beginner marketers make bigger and

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bigger claims. It's easy and it's lazy. But as time has gone on, I have

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realized these larger than life claims are the easiest to establish and

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therefore less unique. After all, anyone can make a promise. The harder and

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more competitive are the time delay and effort and sacrifice. The best

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companies in the world focus all their attention on the bottom side of the

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equation, making things immediate, seamless, and effortless. Apple made the

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iPhone effortless compared to other phones at the time. Amazon made

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purchasing a single click of a button and made purchases arrive almost

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immediately. Maybe by the time you read this, they'll be sending drones to our

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doors within 60 minutes. Netflix made consuming television immediate and

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effortless. So the older I get, the more I've shifted my focus to the quote

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hard stuff, decreasing the bottom side of the equation. And I believe the

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better you do this, the more you will be rewarded by the marketplace.

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Final note, the reason this is a division equation and not addition is that I

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want to convey one key point. If you can make the bottom part of the equation

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equal to zero, you are golden. No matter how small the top side is, anything

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divided by zero equals infinity, which is technically undefined for

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math nerds. In other words, if you can reduce your prospects true time delay

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to receiving value to zero, aka, you realize your immediate dream outcome and

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your effort and sacrifices zero, you have an infinitely valuable product. If

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you accomplish this, you win the game. Given this postulate, a prospect would, in

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theory, purchase something from you. And the moment their credit card was run, it

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would immediately become their reality. That is infinite value. Imagine clicking

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the purchase button on a weight loss product and instantly seeing your stomach

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turn into a six pack. Or imagine hiring a marketing firm. And as soon as you

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sign your document, your phone begins to ring with new highly qualified

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prospects, how valuable would these products or services be?

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infinitely valuable. And that's the point. I don't know if we entrepreneurs

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will ever get there, but that is the hypothetical limit we should all strive

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towards and why I structured the equation this way. Perception is reality. Perception

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is reality. It's not about how much you increase your prospects likely to have

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success or decrease the time delay to achievement or decrease their effort and

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sacrifice. That in and of itself is not valuable. Many times they will have no

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idea. The grand slam offer only becomes valuable once the prospect perceives the

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increase in likelihood of achievement, perceives the decrease in time delay and

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perceives the decrease in effort and sacrifice. A prime example of this

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happened on the London tunnel system. The biggest increase in rider satisfaction

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aka value was never from faster trains to decrease weight times. Instead, it was

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from a simple dotted map that showed them when the next train was coming and how

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long they had to wait. The dotted map, which only cost a few million dollars,

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decreased the rider's perception of time delay and sacrifice aka being

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bored waiting more than actually making the trains faster, which cost billions of

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dollars to do. Isn't that cool? This is how we need to think about our products.

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Pro tip. Logical versus psycho logical solutions. Most people naturally try and

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solve problems using logical solutions, but the logical solutions have already

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been tried. Because they're logical, it's what everyone would have tried

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to do. As business owners and entrepreneurs, I increasingly approach problems to

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find psychological solutions rather than logical ones. Because if there were

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a logical solution, it probably would have already been solved there by eliminating

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the problem. All that remains are the psychological problems. Example inspired by

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Roy Sutherland, CMO of Oglevy advertising. Any fool can sell a product by offering

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it for a discount. It takes great marketing to sell the same product for a premium.

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Logical solution. Make trains faster to increase satisfaction.

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Psychological solution. Decrease the pain of waiting by adding a dotted map.

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Psychological solution. Pay models to be the hostesses on the trip. People would

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wish it took longer to get to their destination. Logical solution. Make elevator

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faster. Psychological solution. Add floor to ceiling mirrors so people are

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distracted staring at themselves and forget how long they were on the elevator.

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Logical solution. Make it cheaper. Psychological solution. Make fewer of them and raise

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the price which would cause more people to want it. Often, most logical solutions have been

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tried and failed. At this point in history, we must give the psychological solutions a shot

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to solve problems. As such, as business owners, it's up to us to communicate these value drivers

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with clarity to increase the prospect's perception of these realities.

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The extent to which you answer these questions in the mind of your prospect will determine

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the value you are creating. Only then will we truly be able to realize the actual value of our

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product to the marketplace and by extension, the egregious prices we wish to charge.

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It's difficult to separate four value drivers from one another, as most vehicles combine

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many of these elements together, but I will do my best to isolate and clearly explain each one

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below. Number one. Dream outcome. Our goal. Increase. People have deep, unchanging desires.

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This is what marriages are lost over, wars are fought over, and people willingly die for.

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Our goal is not to create desire. Our goal is simply to channel that desire through our offer

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and monetization vehicle. The dream outcome is the expression of that feeling and experiences

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the prospect has envisioned in their mind. It's the gap between their current reality and their

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dreams. Our goal is to accurately depict that dream back to them so they feel understood and

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explain how our vehicle will get them there. The dream outcome is simple. It's the getting there

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where the value gets enhanced or detracted. People generally and our clients specifically want

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to be perceived as beautiful, to be respected, to be perceived as powerful, to be loved,

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to increase their status. These are all powerful drivers, but multiple vehicles may accomplish

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the same thing. Take the desire to be perceived as beautiful, for example. There are a lot of

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things that touch on this desire. Make up, anti-aging creams or serums, supplements, shape wear,

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plastic surgery, fitness, all of these vehicles channel the desire to be perceived as beautiful.

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And we further unpack the idea of a desire to be beautiful. We see that it may be a surface

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level declaration of a deeper desire to achieve higher status in one social group.

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The dream outcome value driver is most prominently used when comparing the relative value between

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two different desires being satisfied. In general, the dream outcome that most directly

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increases the prospect's status will be the one they value the most. As such, a prospect may

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value that entire category of vehicles that satisfy one desire more than another category that

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satisfies a different desire. For many men, making money is more important than being handsome.

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Why? Because money drives status for men more than being handsome does. So in general,

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they will value all offers that make them money more than offers that help them look good.

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I once heard Russell Brunson tell a story about this concept. He explained how his wife

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call it at first hearing the status concept rejected it. She claimed she wasn't driven by status

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and would never want a Lamborghini. Instead, she favored her minivan. But after talking further,

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she revealed it was because driving a Lamborghini would decrease her status amongst her mom friends,

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while driving a minivan would show that she was a good mom, increase in status.

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So it's not about the money. It's about the status. The perceived increase or decrease in relative

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standing when compared to others socially or professionally. Talk in terms of things your prospect

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believes will increase their status and you will have your prospects drooling. Pro tip.

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Frame benefits in terms of status gained from the viewpoint of others. When writing copy,

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you can make it that much more powerful by talking about how other people will perceive

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the prospect's achievement. Connect the knots for them. Example. If you buy this golf club,

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your drive won't increase by 40 yards. Your golf buddies, jaws will drop when they see your ball

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sore 40 yards past theirs. They will ask you what's changed, only you will know. That being said,

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when comparing two products or services that satisfy the same desire, the value from the dream

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outcomes will cancel out since they are the same. It will be the other three variables that drive

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the difference in perceived value and ultimately price. For example, if we had two products or services

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that both help make someone beautiful, it will be the likelihood of achievement, time delay,

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and effort required that will differentiate the perceived value of each offer. Simply put,

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if two things make someone beautiful, what makes one worth $50,000 and another were five dollars?

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Answer. The extent of the other three value variables.

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Number two, perceived likelihood of achievement. Our goal increased.

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This was the last of the variables that I added when trying to think through this framework

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a few years ago. I just felt like something was missing with only the other three.

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Then I realized people pay for certainty. They value certainty. I call this the perceived

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likelihood of achievement. In other words, how likely do I believe that it is that I will achieve

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the result that I am looking for if I make this purchase? For example, how much would you pay to

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be a plastic surgeon's 10,000th patient versus their first? If you're a normal, same person,

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a lot more. I mean, heck, you might even ask them to pay you if you're their first patient ever.

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So you can see even from this simple example that while the service you were receiving is technically

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the same, the only thing that changes is your perceived likelihood of getting what you want.

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Both surgeons take the same amount of time to do the surgery. If anything, the guy who has done

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it 10,000 times would likely get it done faster and still charge more. The more experienced surgeon

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has a track record of achieving result, which incentivizes their desirability.

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People value this perceived likelihood of achievement. Increasing a prospect's conviction that

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your offer will actually work for them will make your offer that much more valuable, even though

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the work remains the same on your end. So to increase value with all offers, we must communicate

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perceived likely of achievement through our messaging, proof, what we choose to include or

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exclude in our offer and our guarantees more on this later. Number three, time delay, our goal

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increase. Time delay is the time between a client buying and receiving the promise benefit.

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The shorter the distance between when they make the purchase and when they receive value,

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slash the outcome, the more valuable your service or product is. There are two elements to this

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driver of value, long-term outcome and short-term experience. Many times, there are short-term

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experiences that occur and route to the long-term outcomes. They happen along the way and provide value.

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It's good to understand both. The thing people buy is the long-term value, aka the dream outcome.

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But the thing that makes them stay long enough to get it is the short-term experience.

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These are the little milestone of prospect sees along the way that shows them they are on the right path.

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We try and tie as many of these as possible into any service we offer. We want clients to have

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a big emotional win early as close as possible to their purchase. This gives them the emotional

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buying and the momentum to see it through to their ultimate goal. For example, it takes a while to

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add an extra $239,000 per year to a gym, but that's what they're buying. So once they have purchased,

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we need to create emotional wins fast. One of the ways we do this is to get their ads live and get

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them to close their first $2,000 sale within their first seven days. By doing this, their decision

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to work with us is reinforced and they immediately trust us more. This makes them more likely to

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follow the rest of our systems and get to their ultimate destination. Pro tip, fast wins.

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Always try and incorporate short-term immediate wins for a client. Be creative. They just need

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to know that they're on the right path and they made the right decision trusting you in your business.

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Let me give you another example. If I sell someone a bikini body, their time to lay to realize

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an outcome may be 12 months or even longer. Along the way, though, as they change their bodies,

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they may experience higher sex drive, more energy, and an increased community of friends. They aren't

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initially buying those things, but those things may become short-term benefits that keep them in the

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game long enough to achieve their ultimate outcome. They buy the dream, but they stay for the benefits

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they discover along the way. The faster and more clearly you can demonstrate those benefits,

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the more valuable your service will be. For a weight loss customer, we would get them to meet someone

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else so they immediately had some social benefits from the program, and we usually give them a more

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aggressive diet in the beginning. Why? Because we wanted them to have a big, fast, emotional win,

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so we could get them to commit to the long term. This is also backed by science. People who experience

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a victory early on are more likely to continue with something than those who do not. That being said,

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having to wait 12 to 24 months to get you what you want is a long time when you can do

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liposection in being done in an afternoon. This just shows one of the reasons people pay $25,000

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for liposection with a tummy tuck, while people will barely pay $100 a month to join a bootcamp.

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But that's not the only reason is it. That leads me to the last driver of value, effort and sacrifice.

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Pro tip. Fast beats free. The only thing that beats free is fast. People will pay for speed.

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Many companies have entered free spaces and done exceedingly well with a speed first strategy.

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A few notable companies, the MVD versus the DMV, waiting line forever or pay $50, you can skip

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the line and get your license renewed privately. That x versus usps, when it absolutely positively has

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to be there overnight. Spotify versus slow free music, Uber versus walking, fast beats free.

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Many will always be willing to pay price for the value of speed. So if you find yourself in a

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market competing against free, double down on speed. Number 4. Effort and sacrifice. Our goal

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decrease. This is what it costs people and ancillary costs, aka other costs accrued along the way.

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These can be both tangible and intangible. Using the fitness liposection example,

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let's look at the difference in effort and sacrifice. Fitness effort and sacrifice. Wake up

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one to two hours earlier in the morning, five to ten hours per week of time lost,

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stop eating the foods you love, constant hunger, physical soreness, feelings of embarrassment and

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not knowing how to exercise, risk of injury, literal nausea working out, meal prepping,

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new groceries, more expensive groceries, new clothing, fear of gaining it back after all this effort,

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aka impermanence, etc. Liposuction effort and sacrifice. Fall asleep, wake up thin, guaranteed,

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be sore for two to four weeks. Massive difference, right? In fact, in looking at the marketing

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of plastic surgeons, these are the exact pain points they hit on when they say things like

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tired of wasting countless hours in the gym, tired of diets that just don't work. This is why when

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you self fitness, you have to spend an hour arm wrestling a client to give over one tenth or

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one hundredth of the amount of money they pay for surgery. There's just not a lot of perceived

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value because the perceived likelihood of achievement, the time to lay to achievement,

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and the effort and sacrifice are so high. So even though the outcome is the same,

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the value of the vehicles are dramatically different, hence the difference in price.

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Decreasing the effort and sacrifice, or at least the perceived effort and sacrifice,

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can massively boost the appeal of your offer. In an ideal world, a prospect would want to

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simply say yes and have their dream outcome happen with no more effort on their behalf.

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This is why done for you services are almost always more expensive than do it yourself,

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because a person doesn't have to do all the effort and sacrifice. There's also component of

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perceived likelihood of achievement, difference as well. People believe that if an expert does it,

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then they will be more likely to achieve the outcome than if they try on their own.

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My hope is that you now have a foundational understanding of the components of value,

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and how the interplay between each of the components creates or detracts from the value

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someone might be willing to pay, putting it all together. As I said earlier, these elements of

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value don't happen in a vacuum. They happen together in combination. So let's look at a few examples

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that utilize all four components of value of once. In an effort to quantify the value,

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I'll rate them on a binary scale of zero or one, one being value achieved zero being missing.

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Then I will add all four together to give you a relative value rating of a type of service.

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Our goal as marketers and business owners is to increase the value of the dream outcome

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and its perceived likelihood of achievement, while decreasing the time delay of achievement,

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and the effort and sacrifice one has to put in to get there. To start, I will do a side-by-side

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comparison of two vehicles with identical dream outcomes, meditation and Xanax, both offer the

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buyer relaxation, decreased anxiety, and feelings of well-being. I will demonstrate how the other

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three variables dramatically shift the value of delivering that dream outcome and ultimately the price.

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Meditation versus Xanax. So I'm going to read the chart below to compare relative scores on each

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of the four value drivers. Meditation, dream outcome, relaxation, decreasing anxiety, feelings

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well-being, score one out of one, perceive likelihood of achievement, low, since most people get

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distracted and don't actually think they'll follow through with daily meditation. Score zero out of

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one. Time delay. Long time to yield long-term results. Some immediate benefits after 10 to 20 minutes,

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assuming you don't get frustrated. Score 0.5 out of one. Effort and sacrifice. Physical

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discomfort, numb body limbs often, mental discomfort, feeling like you are feeling constantly.

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Time sacrifice, you have to set aside time every day to do this. Score zero out of one. Overall value

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score for meditation, low, 1.5 out of four. Now let's look at Xanax. Dream outcome, same as meditation,

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relaxation, decreasing anxiety, feelings well-being, score one out of one. Perseve likely to

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have achievement. High, since most people are confident that if they take the pill,

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it will make them feel more relaxed. Score one out of one. Time delay. 15 minutes for effects to be

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felt. Score one out of one. Effort and sacrifice, swallowing a pill. Score one out of one. Overall value

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score. High, four out of four. And that is why Xanax is a multi-billion dollar product while I

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know of almost no multi-billion dollar meditation businesses. Value. I'm not here to argue about

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whether meditation is better than Xanax. Obviously it is, but that doesn't mean it's perceived as more

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valuable. This is also the reason that supplement industry, 123 billion, according to Grandview

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Research, is twice the size of the health club industry, 62 billion, according to HRSA. They both

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accomplish the same perceived objectives, being healthy, losing weight, looking good at

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increasing energy, etc. But one is perceived as more valuable because it has lower costs.

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People are more willing to pay $200 for supplements than they offer a $29 per month membership.

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Taking a pill or drinking a shake is so much faster and easier than going to the gym every day,

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hence valued. Crazy world we live in. And you can either sit there and make

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complain posts about how people ought to be a certain way, or you can take advantage of the way

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people are and capitalize. This book is for those people who want to be victors, not victims of

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circumstance. You can either be right or you can be rich. This book is for getting rich. If

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that bothers you, you can put this down and go back to arguing against human nature. Hint, you're

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not going to change it. Now, that being said, knowing what people value versus what is good for them

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is key. It means you can find ways to monetize the things that people value in order to give them

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what they really need. Win, win. You can make your dent in the universe while making your profit.

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Hey, guys, if you're struggling to keep track of this or you like highlighting, you're like

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writing notes in the margin where you like seeing the frameworks. You might not know this,

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but I actually hand drew every single framework inside of this book. And I think there's at least

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50 hand drawn images and frameworks inside this book that I painstakingly put together to make

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the consumption easier and so that it stores in more parts of your brain. And so if that sounds

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at all interesting, you can go to Amazon and grab the physical copy or the Kindle version of that if

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you prefer either of those formats that are available to you. Chapter seven, pre-goodwill.

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Key who said money can't buy happiness hasn't given enough away. Source unknown.

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People who help others with zero expectation experience higher levels of fulfillment,

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live longer, and make more money. I'd like to create the opportunity to deliver this value to you

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during your reading or listening experience. In order to do so, I have a simple question for you.

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Would you help someone you've never met if it didn't cost you money, but you never got credit for it?

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If so, I haven't asked to make on behalf of someone you do not know and likely never will.

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They are just like you, or like you were a few years ago. Less experienced, full of desire to help

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the world, seeking information, but unsure where to look. This is where you come in.

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The only way for us at Acquisition.com to accomplish our mission of helping entrepreneurs is first

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by reaching them. And most people do, in fact, judge a book by its cover and its reviews.

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If you have found this book valuable thus far, would you please take a brief moment right now

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and leave an honest review of the book and its contents? It will cost you zero dollars and less

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than 60 seconds. Your review will help one more entrepreneur support his or her family.

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One more employee find work they find meaningful. One more client experienced a transformation

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the otherwise would not have encountered. One more life changed for the better.

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To make that happen, all you have to do is, and this takes less than 60 seconds,

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leave a review. If you're unottable, hit the three dots on the top right of your device,

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click and rate and review, and then leave a few sentences about the book with a star rating.

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If for some reason they have changed the functionality, you can go to the book page of Amazon,

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or wherever you purchase this, and leave a review right on the page.

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PS, if you feel good about helping a faceless entrepreneur, you are my kind of people.

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I'm that much more excited to help you crush it in the coming chapters. You'll love the tactics

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I'm about to go over. PPS, Lifehack. If you introduce something valuable to someone,

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they associate that value with you. If you'd like goodwill, directly from another entrepreneur,

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send this book their way. Thank you from the bottom of my heart. Now back to our regularly scheduled

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programming, your biggest fan, Alex. Hey guys, hope you enjoyed the value equation.

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I'm just going to reiterate the one thing, which is that help me share this knowledge with people.

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Obviously, it's on my podcast for free. You can share the actual podcast itself.

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The most helpful thing to do if you're sending to a friend will probably be to send the first

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episode so they can listen to this in order for the book. But to reach a stranger, rather than

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just your friends, there's probably an entrepreneur out there who hasn't read this stuff and could

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absolutely change his life or her life and their family's lives as a result. And so if you could

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leave the book a review on Amazon, you know, it took me two days to record this. If you could take

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60 seconds to do it, it would just mean a lot to me and maybe even change someone else's life.

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So if you could do that, that would be awesome. And you would be awesome too.