https://www.youtube.com/watch?v=\_qspvJAq34M

1 00:00:00.000 --\> 00:01:00.000 you have to spend an hour arm wrestling
a client to sell a 1 000 package whereas here people buy 40 000 packages
over the phone in less than 15 minutes so when i was 28 years old i was
five or six years into business or my business career and i had just
gone through a five-day gauntlet so i had done a two-day client event
which was we had six or seven hundred clients uh that had come to our
highest level program in person and then the next day i had my executive
meeting then two days after that i did a meeting uh with all 135 of our
employees who flew out uh to austin to to to do a two-day conference
with us do some trainings all that kind of stuff my dad calls me up
after this kind of five day marathon and he says hey alexander because
that's what he calls me right he says hey alexander but he sounded
really way more concerned and i was like what's going on um and so i
roll out of bed put a hoodie on walking in the hallway so i didn't want
you know wake layla and he says i thought you said this was just going

2 00:01:00.000 --\> 00:02:00.000 to be a meeting of your highest level
uh clients and i was like it was he was like didn't those people pay
like 42 000 a year the highest level people and i was like yeah he's
like but i thought but you just said you had like 700 people there and i
was like yeah i know and i was like what's the issue he was like you had
700 people who paid that much money and i was like yeah what kind of
came next was something that i think probably stung a little bit at the
time but i knew that it wasn't coming from a place of where i didn't
think it was coming from a place of of meanness and he says do they know
that they're paying you that much i was like yeah they're aware it's not
like i'm magically siphoning money out of their bank accounts he's like
well i mean i hope i hope what you're giving them is worth it that could
have really stung and it probably did um but i think i was kind of in
such an emotionally exhausted state because if you've done five days of
just pure events of it i was like i had no adrenals to get angry with

3 00:02:00.000 --\> 00:03:00.000 and so i said well let me walk you
through it so i said if i made you 239 000 would you pay me forty two
thousand dollars he's like well how long would it take me and i was like
it would take you know eleven months he was like okay well do i know i'm
gonna make that money and i was like yeah you're pretty sure you're
gonna make the money it was like okay he's like what would i have to do
i was like you would you know wouldn't have to do a ton you'd have to
probably do about 15 hours a week of work he was like okay um and would
i have to pay that all up front or like how would i have to pay you i
was like you would pay me as you made the money he was like huh well
then yeah i would do it and i was like and that's why they do too and so
when i walked my father through that kind of mental explanation
partially part of it was to make sure that my father you know felt like
i was legit but the other part of it his questions actually uh denote
what the components of value are and so

4 00:03:00.000 --\> 00:04:00.000 the purpose of this video is to walk
you through the value equation which i think you know might be one of
the bigger contributions that i'll have into the the marketing world and
there are four components to value that's why i have my little
handy-dandy ipad here so we can do this all visually alright so we'll
say value and we have the four components of course of value to do when
i was creating this it was because i wanted to figure out what this word
meant i think value is one of the hardest things that we have as
entrepreneurs to understand we just say it it's it's used loosely
lifetime value you know provide more value excessive value blah blah
blah right but we don't know what it actually means and if you ask
someone what is value right how do you just how do you describe value
how do you how do you measure or quantify value i think this is my one
of my better things and so this is the value equation as alex for mostly
defines it okay so there are four components to this the first component
is what i consider the dream outcome all right and when i was thinking
about this it all started because i was really trying to figure

5 00:04:00.000 --\> 00:05:00.000 out why some people would buy some
things and not other things and at the at the very beginning of this it
was if i were selling to men in general more men value making money then
losing weight right and so in general the category of things that make
people money cost more for men than the category of things of losing
weight and that's because the dream outcome of making money at least for
men increases status more than losing weight does and so as a result
that is deemed more valuable and so while i'll go through each of these
components i'm going to give you two kind of examples of one that
exemplifies it and doesn't exemplify it so that you can see it kind of
in the real world the first component is is the thing that we are
selling valuable in terms of is the dream outcome that we're going to
deliver to the prospect something that they would like the reason this
is probably the first one is because it kind of defines the category now
within a category the remaining three variables are the things that will
determine what is expensive and what is not and to go back

6 00:05:00.000 --\> 00:06:00.000 to the the weight loss scenario if i
have uh a woman for example who wants to lose weight and i sell there's
probably some things that help people lose weight that are five dollars
and some things that help you lose weight that are fifty thousand
dollars so you've got a five dollar ebook and you've got liposuction all
right so why is one five dollars and 150 000 when the dream outcome is
the same of losing weight that's where the other three variables of
value come into play value number two and obviously the goal here is to
increase the dream outcome the more the more appealing we can make it
seem the more viscerally we can describe what the dream outcome is going
to be like when the when the prospect experiences it then they're going
to deem it more valuable and then by extension be willing to pay us more
for it the second component of value is perceived likelihood of
achievement and believe it or not this was actually the last of the four
because i was still trying to figure it out because i felt like
something was missing and so this is the easiest example that i can give
you mentally for two things where one is more valuable than the other
based on the perceived likelihood of achievement and so for example if
you were going to

7 00:06:00.000 --\> 00:07:00.000 get now we'll use liposuction as an
example if you're gonna get surgery right from a from a from a doctor
and one doctor this is their first surgery coming out of medical school
and the other doctor it's their 10 000th surgery of this specific type
of surgery which guy would you be willing to pay more for well obviously
the 10 000 surgery guy right i mean if anything you probably have the
the first time surgery guy you'd want to do it for free or have him pay
you right and so and what's funny about this just as an added tangent is
that the guy who it's their first time would probably end up taking
longer so you're actually getting less time with the guy who's done it
10 000 times than the guy who's done it once or never right and so even
though you're actually getting less time you're willing to pay more for
it which is just another interesting thing which is why value is not uh
time in terms of how long it takes you to fulfill something should never
be in the value equation for yourself all right so first is dream
outcome is the thing that we're that we're going to sell this the
experience that they're going to have would they imagine themselves
experiencing going to be allowed to them second is how likely do

8 00:07:00.000 --\> 00:08:00.000 they perceive the achievement of that
dream outcome if i buy something right like that ebook example if i'm
buying an e-book versus liposuction the likelihood that i think that i'm
actually going to get the stomach that i want is probably significantly
lower with an e-book than with liposuction right so the perceived
likelihood of achievement is lower and by extension i will now get less
value i will perceive less value and be willing to pay less for it and
so for us as business owners and promoters for our businesses the goal
is that in this equation and the reasons a fraction is that we want to
increase both of these things right we want to increase the perceived
likelihood of achievement and when you increase the dream outcome this
is why a lot of marketers start promising bigger and bigger things i
also believe that it's the most amateur it's the most beginner but it's
where everyone starts alright this is where i started my career where
all i would do is dream is is do bigger and bigger dream outcomes i
promise more and more and the perceived likelihood of achievement what i
did is i put more and more testimonials so the more testimonials i had
the higher the certainty that the person or the prospect would
experience what i was selling they believed me that if i had a

9 00:08:00.000 --\> 00:09:00.000 thousand testimonials versus one you
believe the person is better at the thing right and if they're better at
the thing you're more certain which actually decreases risk which
becomes more valuable third so this is the bottom side of the equation
right so the top side of the equation we're trying to increase the
bottom side of the equation we're trying to decrease all right so this
is time delay so the time delay is the time between when i pay and what
i get what i want i have this kind of in two separate pieces here well
i'll just i'll just talk about the main one and then i'll talk about the
about the fourth one we'll hit it all right so time delay and this is
probably one of if not the most powerful things like if you want to
enter into a marketplace you can do whatever the best guy is doing and
do it in half the time and you will become more valuable right people
will pay for speed all right and if you ever compete against somebody
who's free or giving away free stuff sometimes you compete against
government services i've got a friend of mine who does dmv expedited
services in new mexico all right and they have 14 locations of basically
expedited dmv services so you can renew your license and all that kind
of stuff

10 00:09:00.000 --\> 00:10:00.000 and they cost 50 bucks instead of
being free from the government and they murder it murder it even though
they're competing at something that's free they beat them on speed and
so if you ever are competing against uh free compete with speed right
fast speeds free okay so time delay can i do the thing faster can i get
them there faster now the longer it takes the less valuable my service
or product is right the shorter it takes the more valuable it is so in
theory if i were to click buy on a digital product for a six pack and
then look at my abs and i have a six pack that would be an infinitely
valuable product right and so if we can think about our services as like
how quickly right can i make this happen in reality a different example
would be um if i were selling marketing services right to a physician
and as soon as their card ran their phone rang right on the front desk
with somebody saying hey i just heard about your thing i'm qualified i'd
like to buy your services that would be unbelievably valuable right
immeasurably valuable because of the speed right and

11 00:10:00.000 --\> 00:11:00.000 so you can in a very real way increase
the value of what you sell without changing the thing but only
delivering the outcome faster that's the third component of value so the
idea here is that we want to decrease the time delay right we want to
make it faster for the prospect to experience the outcome that we are
promising fourth component of value all right and there's two components
to this i'm going to give you some nuances here it's effort and
sacrifice so effort is what someone must do that they don't want to do
in order to achieve the outcome sacrifice is what they have to give up
or stop doing that they do enjoy doing in order to achieve the outcome
so i'll give you an example of both all right so it's kind of like 4 4a
and 4b right but i think they're kind of i bulk them in the same thing
because i think they are similar enough that they're worth uh putting in
the same bucket so effort for example would be like if i wanted to lose
weight right then uh if i'm you know cindy lou all of a sudden i'm not
doing certain things i might not be weighing my food i might not be
counting my calories i might not

12 00:11:00.000 --\> 00:12:00.000 be eating you know shopping at the
healthy grocery store i might not be working out in the morning i might
not be waking up right early in order to get the gym i might not have an
extra hour or two every day that i have to dedicate to this i might not
be sore right these are all things that i now have to experience that i
don't want to experience that are part of effort right these are things
that make this less valuable on the flip side if i were to uh sacrifice
i'm sacrificing the foods i love i'm sacrificing sleeping in i'm
sacrificing walking down the stairs without being in pain and so i think
effort and sacrifice oftentimes are flip kind of both sides of the coin
right they're either they're heads and tails of the same concept which
is why but i think if you can think of that in terms of your own
services like what am i making someone give up and what am i making
someone start doing that they weren't doing before that they don't want
to do right and so again the goal here is how can i decrease the effort
and sacrifice associated with achieving the outcome when they buy from
me the example would be if i had the the abs thing right now

13 00:12:00.000 --\> 00:13:00.000 let's say it was instant but it was
like incredibly painful right well you clicked the button then you get
the abs but it was just like it felt like fire all over your body that
would be a lot of effort from sac i mean that's painful right that's
literally painful versus nothing at all well in each of those examples
the one that isn't painful is going to be more valuable right and so as
i think through product lines service lines i always attack it from this
perspective all right is how can i create more value by increasing the
dream outcome and my expression of it so that they believe what i'm
saying and the way i have depicted what they want to be actually what
they want and you would be surprised how many times people get this
wrong right i was talking to um dr john berardi is the co-founder of
precision nutrition they sold for a a nine figure plus exit he was
talking about one of the biggest breakthroughs they had in their
business when they understood the job to be done all right so they sold
search certifications right he said most people think that selling
certification is about selling continued education he was like that's
not the

14 00:13:00.000 --\> 00:14:00.000 dream outcome people are not actually
wanting to buy the certification the dream outcome of the certification
and the experience around that is actually being in a community and
being meshed with other people who are just like you weird just like you
and so as soon as they realized that that was actually the job to be
done and people just wanted a socially acceptable excuse to go do that
right certification is socially acceptable excuse to do that then in
that instance now they had to find the dream outcome properly as to what
people actually wanted right and so that was a huge breakthrough in
their business and then business well up and all that kind of stuff and
so getting the dream outcome right may seem simple but a lot of times
being able to depict it accurately back to the prospect as they desire
it um is extremely valuable so the goal is to increase the top side and
decrease the bottom side and one of the things that and the reason this
is a fraction and not an addition and then subtraction equation is that
if you can get these bottom things down to zero right getting the bottom
to zero you have an infinitely valuable product so no matter what your
promise is on the top even it's tiny a tiny inconvenience you help
people avoid if it's immediate

15 00:14:00.000 --\> 00:15:00.000 and it requires no effort on their
part you have an infinitely valuable product and when i look at the
biggest businesses when i look at my own businesses and how i've changed
as an entrepreneur over time i used to focus only on the top side and
now when i look at the amazons i look at the netflix i look at uber all
of that stuff is stuff that decreased the downside uber made it
immediate and you now you now if you've seen on lyft you can be uh you
can get first in line right so it's like boom you can hit it for an
extra five dollars you can get picked up an extra like in a minute right
it's crazy but they were smart about it they realized they could
increase the value by decreasing the time delay netflix made decreased
all the effort and sacrifice that went along with watching television
and seeing uh and running movies and all that stuff it was immediate for
them right there's no effort no sacrifice it's all right there you don't
have any picking it's just boom they're like make suggestions etc this
theme amazon right you buy it and then they've got drones delivering it
to you in two hours right they consistently the biggest companies
decrease the downside of the equation which is where more of the work
happens but in my opinion it's also where the biggest moat lies from a
competitive advantage

16 00:15:00.000 --\> 00:16:00.000 standpoint and so this as i look at my
companies this is what i'm focusing on with our products and our
services how can we decrease the time delay how can we how can we
decrease the effort and sacrifice that are associated with achieving the
outcome that we want and then in so doing increase the perceived
likelihood of achievement of the pro of the prospect so what i want to
do is give you one side-by-side example of this concept so you've got
personal training and you've got uh lipo all right so you've got both
kind of versions of the same dream outcome all right so both stream
outcomes are you're gonna look good you're gonna feel good all that kind
of stuff right so i would say this is a is a one out of one um if we
were to rate this on a binary scale of does it achieve the dream outcome
yes personal training will help you look good feel good etc liposuction
help you look good feel good etc all right now look at let's look at the
second second thing here right perceive likelihood of achievement if
you're buying personal training the perceived likelihood of achievement
probably kind of low right because you're like am i really going to do
this am i really going to follow the nutrition plan am i really going to
wake up you know am i going to do all this stuff do i really think it's
going to happen for me probably put a zero most

17 00:16:00.000 --\> 00:17:00.000 people don't actually think they're
going to be successful when they buy the thing now on the contrary
liposuction do you think that you're going to have less fat on your
stomach when you buy section the answer is yes you do think that you're
going to have less so the perceived likelihood that you're going to do
it very high which is a one let's go to number three so time delay all
right so personal training am i going to have it immediately no personal
training might take 12 months or 18 months or 24 months before i get to
my ideal weight and even then i still might not be my body might not the
way i want it to look or my stomach might have extra skin all that kind
of stuff right so it's going to take a long time for me to get to where
i want to get to right it's not going to happen soon boom we've got
another another zero here now liposuction if they just suck all the
stuff out of my stomach and they cut the skin off right and it's nice
and tight right what's the like what's the the time delay on that i
don't know maybe a month maybe two months right before before it's it's
all ready and sucked in right so it's a short and much shorter time time
delay for the dream outcome to occur and then finally effort and
sacrifice for personal training all the things i gave earlier right i
gotta give i gotta i

18 00:17:00.000 --\> 00:18:00.000 gotta go i gotta change the way i shop
i gotta change the way i eat i gotta wake up early i gotta be sore three
days a week right i might not be able to eat with my kids like there's
all these other pains that go with i gotta learn how to cook healthy all
these things right lipo i don't change anything right the effort and
sacrifices i i fall asleep and instantly i'm woking back up from my
medical coma i am sore in my stomach for sure you know for three or four
weeks but then after that it's done right whereas here on this personal
training side right i'm going to be sort of for for years right now my
goal here is not to debate whether uh you know i think people should do
fitness or do liposuction i'm obviously just do whatever you want right
but for the for the for the context of us as business owners to
understand the difference in value this is a one out of four and this is
a four out of four which is why you have to spend an hour arm wrestling
a client to sell a 1 000 package whereas here people buy 40 000 packages
over the phone in less than 15 minutes and that is the difference of
value and that is why the value equation is how i

19 00:18:00.000 --\> 00:19:00.000 think that i this is how i see
business this has taken me a long time to figure out and so i wanted to
share it with you guys so anyways lots of love keeping amazing and if
this was interesting for you fyi my book just released um it's 99 cents
you can get it i made it 99 cents uh because as i said on this channel i
have nothing to sell you uh amazon takes 65 cents of that 99 cents um
for you to download so i want this to be affordable for anyone and the
goal of all the things that i have here is um you know we're trying to
build a portfolio of companies that does a billion dollars in revenue
we're currently at about 85 million um and that is why i have nothing to
sell you this is not how i make my money um i know there are a lot of
broke people in the world and uh my point here is to make sure that you
are not one of them and to equip entrepreneurs with the stuff that they
need to succeed without having to buy any courses on the internet so uh
keeping awesome lots of love and see you in the next vid bye
