The Value Equation
The 4 drivers that dictate what you can charge for anything
“Value = (Dream Outcome x Perceived Likelihood of Achievement) / (Time Delay x Effort & Sacrifice).”
The top half of the fraction (Dream Outcome and Perceived Likelihood) are factors you want to MAXIMIZE. You want the client to envision an extraordinary end-state and have total conviction that you can deliver it.
The bottom half of the fraction (Time Delay and Effort & Sacrifice) are factors you must MINIMIZE. The faster they get a result with the least amount of pain, the more they will gladly pay.
Most businesses compete on price because they fail to remove effort and time delay for their customers. When you do the heavy lifting for them, price becomes irrelevant.
Key Takeaways
- Price is what you pay; value is what you receive.
- Compress the time-to-first-value to skyrocket perceived worth.
- Eliminate effort: Turn 'do-it-yourself' into 'done-with-you' or 'done-for-you'.
Run the Value Equation Diagnostic on Your Offer
Why it works: Pinpointing which of the four drivers is holding down your price points allows you to engineer an instant competitive edge.