The Value Equation

by

Ascend 101

Lessons about building a one-person business, writing, and self-improvement

I’m a big Alex Hormozi fan.

Chances are, you’re a big fan as well. And no wonder.

The guy makes incredible and valuable content and knows damn well what he’s talking about.

There’s one quote in particular that I really like.

“You only sell because you don’t know how to market and you only market because you don’t know how to build a good product.” — Alex Hormozi

This quote is the reason for my business philosophy.

You all know my stand on cold outreach. It’s not necessary.

If your goal is to ‘get rich quick’ and make a lot of money, sure go ahead. Send those 100 cold DMs or emails a day.

If the goal is freedom, however, spend your time on your lever-moving tasks.

Building an audience & creating a good product.

Today's mail will be about the latter.

This is a 6-minute read.

Offer Creation

Let’s get one thing clear.

The goal of a business isn’t to make as many sales as possible. The goal of a business is to make as much money as possible.

You want to sell your products & services based on Value not on Price.

Competing on price is how you get commoditized and sets you up for failure.

You’ll offer the same product as everyone else. Lower your prices to such an amount that you barely break even. All to compete with every other firm that does the same thing.

And everyone ends up dead broke.

No our goal is to sell in a category of one with no comparison.

We create an offer so good that people feel stupid saying no. And at a premium price.

How do we do this you ask?

With our good friend the Value Equation.

Value Equation

Image from the book “$100M Offers” by Alex Hormozi

The Value Equation is composed of 4 factors:

  • Dream Outcome

  • Perceived Likelihood of Achievement

  • Time Delay

  • Effort & sacrifice

We want to increase the first two and decrease the latter two.

Tip: The latter two have higher leverage so we’ll focus more on decreasing those.

1) Dream Outcome

The dream outcome is all about what the prospect wants to achieve.

Remember: Our goal isn’t to create desire. It’s to channel that desire through our offer and monetization vehicle.

As copywriting 101 would teach us: talk in terms of benefits, not features. Don’t sell the plane ticket, sell the vacation.

You don’t sell a ghostwriting service by saying, ‘I’ll write you 3 tweets a day, 2 threads a week and I’ll send 50 DM’s to qualified prospects.’

No you say, ‘I’ll get you your first 10,000 followers in 3 months. I’ll make sure your pipeline is filled with leads so you’ll get AT LEAST 2 booked calls a day.’

Action step: Paint a clear picture of what prospects will achieve if they buy your product or service. Talk in terms of how their life (and status) will improve.

2) Perceived Likelihood of Achievement

This is where a lot of people go wrong thinking they have to keep all their ‘juice’ hidden behind a paywall.

No you don’t.

People pay for certainty.

You can share everything you know. But people will still pay you to do it for them because chances are, you know how to do it better.

The chances of them reaching their goals are higher if they let you take the steering wheel.

Action step: Prove your authority and competence by sharing testimonials, case studies, and addressing how you tackle common objections people have.

3) Time Delay

The faster people achieve their goals, the more they value your product or service.

It’s not always possible to decrease the time delay. You can only lose so much weight in a certain time frame.

But you can make it feel faster.

If you’re helping someone get a bigger and more consistent lead flow of qualified clients.

Go extra hard on marketing in the first month. Let them experience a fast win. This will let them know they are on the right path and that they made the right decision.

Action step: Brainstorm how you can shorten the time it takes for your prospect to achieve their desired result. Or at least how you can make them experience a fast win to increase the chances of them sticking around for the long term.

4) Effort & Sacrifice

“How much work do I have to put in?”

People don’t like to do work. That’s simply how it is.

Find a way how you can remove the effort & sacrifice the prospect has to do and you can increase your prices exponentially.

That’s why done-for-you services are almost always more expensive than do-it-yourself.

Action step: Think about everything your prospect has to do to reach their desired dream outcome. Is there a way you can eliminate or reduce it? Can you do it for them? Can you create a product that will help them do it faster?

Wrap-up

Wow, we’ve covered a lot.

This mail turned out to be a lot longer than I wanted it to be. And I didn’t cover everything yet either.

So if you liked this email be sure not to miss the next one because we’ll be doing an offer creation part 2.

Also, hit reply to this email and let me know your thoughts about these types of emails. Do you enjoy the length or would you rather read a shorter, more condensed version?

Cheers,
Alex.

P.S.

If you’d like more help, I’ve got your back:

  1. Book a 1:1 coaching call with me: We'll talk about how you can start building your one-person business and set you up for success in the long run.

  2. Download all my products for FREE: Ranging from every resource I ever read to everything I know about content creation. It’s all waiting for you to claim it. Start your journey to financial freedom the right way.

And if you've got a moment, I'd love to hear what you thought of this edition of Ascend 101.

Send me a quick message – I reply to every email!