Your offer might not be converting because it’s not valuable enough.
To increase value, you need to understand what creates value in your prospects' minds.
Here's how you can increase value using a simple equation:
The Four Elements of Value
1. Dream Outcome
2. Perceived Likelihood of Achievement - The higher the better
3. Time Delay - The lower the better
4. Effort and Sacrifice - The lower the better
1. Dream Outcome
The dream outcome is the end result that is meaningful to your prospects.
It doesn't have to be anything unique. It just needs to be highly valuable to the prospect.
The prospect wants to get from point A to point B, and you need to convey that.
The more expensive the problem you're solving, the more you'll be able to charge for the solution.
2. Perceived Likelihood of Achievement
This is the prospect’s belief in their success, if they buy from you.
For example, let's say you need to have surgery on your hand.
If you had to choose between a surgeon who’s performing his first surgery and one who’s done it a 1000 times, you’d likely pay more for the latter due to the higher perceived likelihood of a positive outcome.
Increasing this perceived likelihood is crucial for creating value, because it reduces the risk of a negative outcome.
3. Time Delay
How long will it take for your customer to see the final result or even an initial result?
The faster you can deliver results, the more valuable your offer.
For instance, a service that helps someone lose weight in a week is more valuable than one that takes a year.
If there are 2 equal offers in the market, one is fast (Uber, Fedex) and the other is nearly free (taking the bus, USPS) the fast offer will almost always win in the eyes of the wealthy customer.
4. Effort and Sacrifice
This includes all additional costs and inconveniences the customer must incur to achieve the result.
The less effort and sacrifice required, the higher the perceived value.
For example, CoolSculpting is perceived as more valuable than traditional weight loss methods because it requires less effort and sacrifice.
Creating the Ultimate Value
The goal is to maximize the 1st and 2nd components (dream outcome and perceived likelihood of achievement) while minimizing the 3rd and 4th (time delay and effort/sacrifice).
This creates immense value for your prospects.
More Real-World Examples
1. Amazon: Consistently investing in faster delivery and easier purchase processes to decrease time delay and effort.
2. Netflix: Immediate access to content with personalized recommendations to minimize effort and time delay.
3. CoolSculpting: High perceived likelihood of achieving a flatter stomach with minimal effort and no downtime, making it more valuable than traditional weight loss programs.
Conclusion
Understanding and applying the value equation can transform your offer. By focusing on increasing the dream outcome and perceived likelihood of achievement while reducing time delay and effort, you can create offers that are irresistible to your prospects.