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This one equation will make you rich I Recently spoke at adworld if you stayed At the very end you’ll understand how You can use the equation to sell lots of Stuff or lots of money and make yourself Unreasonably wealthy keep being awesome And enjoy big picture there’s two things That I want to talk about one is how do You create and sell valuable things Right you probably hear people say hey Like provide more value give value away Like it’s all about value value but like No one defines what is value what does That even mean right what are the Components that create a more or less Valuable product or service the second Part is one of the four different things That you can do to enhance value all Right so once you have a valuable thing You can enhance it by adding scarcity You can enhance it by adding urgency you Can enhance it by adding bonuses or you Can enhance it by adding guarantees and You can also as a fifth half bonus for You guys you can enhance the value by Simply naming it in a way that resonates More with your avatar or the type of Person you want to sell to okay and so If those are the five things that can Enhance the value of the thing that You’re selling if you have all five and You do them well you will sell more than You would if you didn’t have them now I Won’t have time to get in all five I’m
Just going to talk about one of them Which is guaranteed it’s a big picture We’re gonna talk about how to create and Destroy value in the things that we sell And we’ll talk about how to reverse risk Through guarantees to make the things That we are selling more compelling to Them because now they won’t fear that They’re not going to get the outcome That we promised cool awesome I spent a Very long time trying to figure out what Value meant and it’s because I we worked With a lot of portfolio companies and we Want to think about how we can create New product offerings that are going to Be that are going to sell for lots of Money with big margins uh and make us All rich right I wanted to come up with An equation that would encapsulate this So that we could basically formulate or Formulatically approach the problem so It’s like if we check these boxes we’re Going to get something valuable then we Can just do this over and over and over Again and I had to do it that way Because I can’t be the person who’s Making the products in every one of These companies at this point is I have To create a process around it okay the Four variables are as follows so if You’re taking notes or you have Something on your side screen this is The these are the writer downers number One is the dream outcome is the thing
That we are promising something that People actually want all right I’m going To dive into each of these four in a Second but I’ll just give you the four And then we’ll we’ll double click all Right so that’s number one and when You’re writing these down write it down Like a fraction so draw a line right in The middle of your paper or whatever and You’ll have two on the top and two on The bottom so number one is your dream Outcome number two is the perceived Likelihood of achievement How likely Does someone believe that if they Purchase your thing they’re going to Achieve the outcome that we are Promising a lot of words hopefully a Simple concept number three is the time Component in essence how quickly are They going to get the thing after they Pay the fourth is the dual-sided coin of Effort and sacrifice what does someone Have to start doing that they don’t want To do as a result of this purchase and Then what are the things that they have To stop doing that they would like to Keep doing that they cannot no longer do As a result of this purchase all right So those are the four things and what I’d like you to do in thinking through This as we break it down is think about Your own products and services that you Have and think about how they Stack Up In using this equation all right I’m
Going to give you a big picture back and Forth example and then I’m going to dive Into each of them in more detail if we Were to think about an ideal outcome all Right so let’s use weight loss because It’s an example that most people can Understand all right so why is it that Let’s say you have some things that you Can sell for weight loss like fifty Thousand dollar surgeries for Liposuction and on the other hand you’ve Got a five dollar ebook that promises a Skinny tummy if they make the same Promise right which is the dream outcome Number one how is these two things are So different in price right well it’s The other three variables right because The dream outcome people want to lose Weight right and so that’s unit number One now the reason that that is number One of the four is that if I were to say Hey I can make you a million dollars Versus losing weight most people many Men especially would probably value Making money more than they would value Losing weight not always but oftentimes As a category investment things Franchise opportunities business Opportunities tend to sell for a higher Price which is the kind of the component Of B2B business to business versus Business consumer by and large when you Have two different things like that we Use the dream outcome to differentiate
Entire Industries or category worries of Products as being more or less expensive Now once we have the same dream outcome Like weight loss being delivered then we Move on to the other three parts of the Equation let’s go on to perceive Likelihood of achievement if I have two People who are selling the same exact Thing let’s use a doctor in that weight Loss example like the liposuction guy And let’s say that liposuction guy a Doctor has done 10 000 surgeries of Liposuction and let’s say Dr B has done One same surgery same dream outcome it’s Going to take the same amount of time Same amount of effort for you this guy Might even spend more time on you than This guy because he’s not his Experienced which one are you going to Go with Probably the 10 000 guy why because of The perceived likelihood of achievement We have lower risk associated with Making this purchase because we believe That if we give this money we’re going To have the outcome that we desire and So if you think through this in terms of Your own products you’re like am I doing A good of job before the purchase of Increasing someone’s perceived Likelihood of achievement because in a Very real way that confers itself or it Translates into higher prices this guy Even though it probably sticks it takes
Him less time to do the surgery you Actually can charge more than this guy Isn’t that wild so we’ve got the dream Outcome is the thing something people Actually want what’s the perceived Likelihood of achievement now if we stop There between making big promises and Making people believe that it’s actually Going to happen for them that is what The majority of young and new Entrepreneurs spend their time on most People myself included spent the first Half two-thirds of my career trying to Beef up the top side I would promise Bigger and I would show more Testimonials more results promise bigger More testimonials more results right More third party identification more Celebrity endorsements Etc right but I Believe now now I’ve done this a little Bit that the actual fortunes rely on the Bottom side of the equation okay so Remember this is the top side that Creates value the bottom side of this Fraction are the things that destroy Value our goal is to increase the top Side and decrease the bottom side so With time there’s two components of time We have the time delay between when you Buy and when you get and then the amount Of time to immediately start seeing any Kind of outcome so it’s like the Experience along with so for example if I signed up for a gym membership right
Using this weight loss example I might Know that I’m not going to lose the Weight for a year but if I start seeing Value from the community I start you Know feeling more upbeat et cetera I’m Going to start experiencing benefits That might not be my big goal but I’m Going to have other things along the way That are going to still deliver value Quickly the whole component of time here Is how quickly between when I buy and When I get I’ll give you a B2B example In a b2c example in a B2B example let’s Say you own a marketing firm so this is Admiral so I’m sure audit this will Resonate with a lot of you guys if you Have two agencies that are side by side And they both say hey I’m going to do Some marketing for you and I’m going to Get your phone to ring one way or Another marketing agency a says okay now That we’re doing this you’re going to Have to start you know recording lots of Ads for us and we’re going to be meeting Three times a week an hour each time and You’re probably gonna take four hours a Week to record these these ads for us And it’s going to take us 60 days to get This stuff done at day 60 your phone Starts ringing from the ads that they do Okay marketing age number two you sign The paper and as soon as you sign the Paper and they process your credit card Your phone rings and it’s a lead
Within seconds Same product Time collapse and so one of the easiest Things I had a mentor once say this he Said one of the easiest ways to figure Out what product to sell is look at the Products everyone else is selling and Deliver the same thing in half the time And so when we think about the products That we sell is there a way that we can Condense TTV which is time to value and So one of the key one of the huge ways That we focus on when we bring a Portfolio company in acquisition.com is We say how can we look at this this Service delivery and see if we can do it Faster now before the people who are in The room who are like well my business Is different we have a company that Publishes books for God’s sake so a very Long process but what we were trying to Figure out because they’re the same Situation where it’s like it just takes Time for someone to like write a book Like how can we deliver this value Faster and so the thing is is it just Like that gym example that I said it’s Not that you necessarily have to deliver The longest result First but you want to deliver a result First you want to have a tangible Outcome that someone can experience Literally holding their hands and so one Of the things that they did was created
A little seven day kind of mini book Boot camp and when they did that people At the end of seven days could have an Actual mini book published and live now They make it clear this is not the book That’s going to make you a millionaire But what it was was to break the belief And to prove the concept that they could Really do it and then they got the bind And really built the you know the real Book that was going to end up making the Money Etc right and so the idea here is That if you are creative and if you are A loser then don’t think this way but if You are a winner there’s always the Question which is how can I make this Work for me all right and so you have to Think if like if you’re a real estate Agent you’re like well it takes 90 days To sell a house how can you give someone An outcome before that it’s like well What else happens they have to clean the House they have to inspect the house They have to they want to know about Ways to make more value there’s Lawn Care there’s fixes there’s a million Things that have to happen is there Other things that I can do along this Journey that I can provide more value to This person earlier so they can get Better experience in a b2c example let’s Say uh I’m on the internet and I’m Trying to buy something for weight loss Right it and I click the button that
Says six minute abs and then six minutes Later I have abs how like literally I Look at my shirt like holy how Valuable Would whatever that thing be If in six minutes I would have abs Probably infinitely valuable and so when We can find ways to deliver the outcomes To our customers sooner or faster they Will value it a lot more not just a Little bit more a lot more speed is one Of the best all-time competitive Advantages and so the last one is effort And sacrifice so I said it’s two sides Of the same point because when you take On a new customer you have to have that They have to start doing things that They weren’t doing before right that’s Effort they didn’t and they probably Don’t want to do it because they weren’t Doing it before which is why they don’t Want to do it right and on the flip side They’ve got stuff that they stop doing That they do want to do right and that’s Why they’re two sides at the same point In that market example I just gave with The agency right let’s say marketing Agency A and B and I said a had you know You have to three three meetings a week And you’ve got four hours to deliver us Copy and creative and whatever right Versus the other agency that’s like oh We’ve already tested all the stuff for Your industry and we’ve got
Videographers and whatnot who can who Can already just start running the stuff Like you just pass and it’s taken care Of how much more valuable is the guy who Takes none of your effort and sacrifice Takes no effort on your part to make This outcome occur so if you’re thinking About this within your own business the Way that we like to think about these Four four variables right when we have The effort and sacrifice the goal just Like time is to decrease it and if we’re Repeating the same activities with every One of our customers how can we Streamline that how can we predict what That what is going to happen and how can We how can we make you know three Onboarding calls into one and how can we Make one onboarding call into a Checklist so how can we streamline this Process such that it’s seamless and Effortless and ideally immediate for Them to achieve the result all right and So I said there’s four four variables in The value equation you’ve got a big Dream outcome that people want to Experience They believe that the likely that They’re going to experience it is very High the time that they have to wait Between when they buy and when they get Is as little as possible And then the effort and sacrifice is Zero and when you put those four things
Together you have a very valuable Product and so when I said that this the Bottom half of the equation is the more Valuable thing that as I’ve learned is That a lot it’s very easy to make bigger Promises and you know throw testimonials And things like that it’s much harder to Actually have the operational Effectiveness to drive results faster And decrease the amount of effort that a Customer has to put forth and so the Competitive modes that exist in the big Businesses are on the bottom side of the Equation Netflix took over Blockbuster Because they made consumption of movies And TV shows immediate and your effort And sacrifice if you didn’t have to get Up in your car drive around the corner 15 minutes walk around grab the thing And then not to mention return it three Days later which is zero value add to You right without getting your late fee They just got rid of all of that so you Could just take your phone and start Watching but the actual dream outcome And perceived likelihood on both of Those occasions that people thought they Were going to watch a movie or watch a TV show and they’re very certain they Wanted to do it right so like the top Side was the same the bottom side of the Equation is where they killed everyone If you look at Amazon they made the Purchasing process seamless on two
Angles if I can click with one button And it comes tomorrow they made the Effort sacrifice virtually nothing in Terms of the purchasing and then the Time delay is virtually nothing in terms Of getting the thing and they continue To shrink that time Gap they sell the Same products as everyone else literally But what did they do they increase the Perceived likely of achievement by Adding all the reviews so people believe That when they buy the thing they’re Going to get the outcome they really Want the job they hired the product to Solve they believe they have when they Have that because of the reviews that Amazon leaves right the time because They get it immediately and it’s and They can buy it quickly and the same Thing with the effort and sacrifice Right and so that’s ultimately how Amazon is able to beat because they Provide value all right is this making Sense this is cool you guys digging this Okay I’ll give you one cool benefit of That four-part stack and then I’ll I’ll Segue into the guarantees portion all Right so I gave you four variables guess What those four variables also equate to They equate to headlines and copy so if I want to promise something to a Prospect what am I going to say here’s The dream outcome here’s a number that Is related to the amount of people
Who’ve helped achieve this thing Here’s how long it took them to achieve That thing and then here are Stipulations around that claim and if You have data from your customer success Department which hopefully you do right Which is percentage of customers who Maybe leave a five-star review or Percentage of customers to achieve X Outcome by X date under this condition Now you have claims that you can use That are very compelling in your Marketing and your copy these can be Headlines and emails they can be Headlines and ads they can be on your Sales Pages they can be hooks in in your In your videos and creative content and So when you think through these four Variables they are the consistent Variables of claims in general so when You want to communicate to a Chiropractor that you can help market For his facility you’re going to say 70 Of our chiropractors that we work with Achieve over 100 patients in their first 30 days without having to make an ad Effort and sacrifice and so when you do Something like that you use those four Parts of the equation that is also Reverse Engineers copy because they Should be related because value is what People want to buy and so your ability To persuade and your ability to Understand and communicate value
Should be married when you’re thinking About your products and services and you Have these four variables you’re like Okay how do I do this right so the way That we think through this Is that we create a big list of problems All right which is I like to think about In sequence which is what is every Single mini micro step as chunked down As humanly possible that someone has to Go through to experience this result so If you’re in the physical products Business then you’re gonna that’s why Amazon spent so much time on the actual Purchasing because there’s not a ton That they have to do but once the person Uh receives the product what’s their First impression of the Box the Unpackaging the directions that that They get in order to use it what the Using it experience looks like the first Time the second time Etc how can we Streamline that process for them how can We give them different ways that they Can use the same thing right in the Services side there’s probably a lot More micro steps that somebody’s going To have to take in order to achieve the Outcome right and so the idea is we want To write down every single problem that Could possibly encounter throughout Their entire Journey with us and then we Want to write out what the solution of That would look like now we’re just
Putting we’re in we’re in fictitious World here we’re saying you know blue Ocean what would we do to solve every One of these problems right and we get This huge list a lot of guys who go Through the book have a hundred plus Different little mini micro problems and Many micro solutions that they have now Once you have this huge thing this is a Fun activity to do with your team is how Can we make the thing we sell more Valuable right once you have that list You then do something I call the trim And stack which is you look at that list You say which of these is the most Valuable to them which is the one they Suffer the most from that is most Valuable them that’s category number one Then next to those which of these would Cost us virtually nothing to to build or Implement after we have a first time Experience right so it’s like if you Have to build out like a grocery Calculator it’s going to take you time One time but then every time after that It’s done right what’s the incremental Cost of each of these of each of these Solutions and so then you order those in Terms of uh you I I just would go low Medium high it’s very simple and so then For me what we do with the companies we Have is we look at the things that are High value and cost us very little to Provide on increment and we cut
Everything else out and then we have Something that’s extremely valuable and Costs us very low and that’s how you Have a very high value very high margin Product or service that you sell that is Ultimately how we recreate value in a Business and we like to think about is Like what are all the capacities of the Business us what are all the problems They could potentially solve and then Which ones will we choose to solve and Then once we’re very ruthlessly clear on The problems that we choose to solve we Cut out everything else and say that’s Just not a problem we choose so we know We could solve it but just based on the Economics of that solution or that Problem we don’t want to be the ones to Do it and then we say ruthlessly focused On things that we do we do more of it Okay now most people think that they’re Selling against their competition I disagree what you’re really selling Against is inaction you’re selling Against doubt you’re selling against the Biggest obstacle which is risk the Comfort of not doing the thing or not Buying the product is so high we have to Help decrease their action threshold Right we have to lower that bar just so They can just step right over it because Up here they don’t want to take action Because it’s too comfortable we have to Lower it so much so there’s so little
Friction for them to take action with us That they buy I think one of the more Compelling things that a business can do Is offer guarantees all right guarantees Are you assuming a certain percentage of The risk from the buyer whenever there’s An exchange between two parties there’s A certain amount of risk that both Parties incur and so if you have these Two parties and there’s a certain amount Of risk that’s shared you can shift the Risk in your favor because you have more Knowledge about the Fulfillment than the Client does why because you’ve done this A hundred times before and this is their First time and so it would make sense That we shift some of that risk in our Favor and we do that in the form of a Guarantee rather than like insurance but You can think about guarantees as Purchase insurance for the buyer and so There are four ways that I think through Guarantees and creating and structuring Creative guarantees the four types are Unconditional guarantees which means it Doesn’t matter what you do if you just Want your money back I’ll give it back To you that is the strongest type of Guarantee now depends on the type of Business if you can’t offer it I think You should because if you do the math on If I reverse the risk and I get 20 more Sales because of this unconditional Guarantee and I get five percent more
Refunds and not even five percent more On an increment let’s just say you get Five you go from one percent refunds to Five percent refunds which would be a Massive increase in refunds you still Added 15 to your sales and it was still Worth it mathematically that is why Having the guarantee is just a math Equation it’s not like you can’t let Your emotions be like well we got our we Got more refunds now it’s like yeah we Also got 20 more sales so you just have To think about it like that just be a Business person and not emotional about It number two is a conditional guarantee Which is uh we will give you X if if x Happens y if this happens this is what We will do right if y the next very Simple if you provide us content for our Marketing agency Always by noon on Fridays before the ad campaign start for The first eight weeks and if you don’t Make at least twice what you paid us Over that first eight week period we Will give you your money back right you Can also say we will work with you until You get your money back the third is uh An anti-guarantee which if you don’t Have a guarantee which there are there Are situations where that that makes Sense you want to lean into the fact That you don’t have a guarantee you Don’t want to like not talk about it Because it’s a normal part of the buying
Process be like what are my assurances Like how do I know this is going to Happen you’re making these promises how Should I believe you right and that’s Where you lean in and you say oh no we Don’t have guarantees and if you’re the Type person that really needs a Guarantee this is not the program for You because there’s too much work that’s On your on your part we can guide you But the vast majority of the success is Going to be in your hands we will guide You but it’s going to be on you and if That doesn’t feel good for you then There’s 100 other guys or you have some Sort of proprietary thing it’s like once I give you the super secret sauce you’re Going to know it forever and so I can’t I can’t give you a refund because the Day after you learn a secret it’s not Valuable to you right and said for that Reason we can’t we can’t uh do any kind Of guarantees the fourth is what I call Implied guarantees so anything that’s a Performance related offer you know we’ll Increase your Revenue by X and we get 20 Of the increase that is that is a an Implied guarantee to the buyer rev share Is profit shares uh performance bonuses Kickers doing things off of a strike Pricing going up all of those things are Implied guarantees based on performance Those are the four different things that You can do in terms of guarantees now
The advanced version of this is that you Can stack guarantees so I can say I will Give you a 30-day unconditional Guarantee and I will give you a 90-day Conditional guarantee which means that For whatever reason you’re like hey I’m Not sure then you say listen the only Way for you to be for you to be sure is For you to be inside the program because I just want you to make an informed Decision you can’t make an informed Decision until you’ve actually Experienced the product I’m just going To give you a 30 day unconditional Guarantee so you can get in there Experience the benefits and then make The decision for yourself it makes it a Very easy sale because then the sale Becomes essentially a trial now you’re Going to close a lot more deals but You’re also going to get more refunds But the netnet is you’re going to to Make more sales and so you do the Unconditional guarantee and you say but On top of that and this is where you get Clever is you look at the customers Who’ve made the most money if you’re B2B If you’re b2c you look at the ones Who’ve gotten the result that you that You promised the best results and then You look at the client Journey that they Had what are the things they did who did They talk to what was their experience And so then what we do is we reverse
Engineer their experience the key Milestones of their experience and we Make those part of the guarantee so for Example if I were selling internet Marketing whatever then I would say as Long as you get your domain purchased And you set up a website and you spend At least one dollar in advertising or a Hundred dollars in advertising if you Don’t get an Roi from this program by Day 90 I will give you your money back And so we make two or three stipulations That seem very straightforward but the Stipulations are the ones that we know Are the ones that drive client success In so doing we basically guarantee that They will succeed which is the point of The guarantee and so we say listen if You’re trying to lose weight I will give You two times what you paid me by the End of this 90 days if you show up to Every one of the workouts and you send Me a picture of all your meals that’s it It you do that at the end of the 90 days I guarantee that you’re going to lose You lose the weight that I promise You’re going to lose and so you just Look at what are the things in common That the people who are the biggest Successes did and you just look at the Fewest common variables because the more Stipulations you add the weaker the the Guarantee is going to be I’ll tell you a Fun one if you just want to get weird
Um if if for some reason you have uh any Kind of like coaching or any kind of Business that’s like that the compliance Of opening a Google doc and writing what You’re going to do that day and at the End of the day just saying what you did Over I think it’s it’s like six weeks uh Is like one percent or two percent Compliance like people just can’t do it It’s so simple if you want you could Just say hey here’s my guarantee if you Just say what you’re going to do and at The end of the day you say what you did For six weeks and you don’t get the Results Then I’ll give you the money back and You automatically know that 99 of people Are not going to do that anyways so Anyways fun one for you guys one of the Things that people suck at with Guarantees is that they say they make The guarantee amorphous they say results Guaranteed what you don’t want to do is Say that because it’s like Banner Blindness everyone’s heard that before And it means something different to Everybody what we want to do is spell Out exactly what our guarantee is and we Don’t even need to use the word Guarantee we can just say If you don’t get very specific outcome If you don’t lose six inches from your Waist by this time period and you asked I will write you a check for the
Difference between what you gave me and What you think it was worth you want to Spell it out in common language so they Understand what you’re actually saying Rather than saying results guaranteed if You enjoyed this stuff I have a book Called 100 million dollar offers you can Check it out it’s 99 Cents I hope you Got a good return on your attention and You can immediately use at least one or Two of the things to ultimately sell More people at higher prices
