# The Value Equation

The single most useful frame for offer design. Originated in Alex Hormozi's *$100M Offers*; the underlying idea (multiply benefits, divide costs) is much older — direct-response copywriters have been doing it for a century.

## The formula

```
              Dream Outcome  ×  Perceived Likelihood of Achievement
  Value  =  ─────────────────────────────────────────────────────────
              Time Delay     ×   Effort & Sacrifice
```

The customer compares the *Value* score to the *Price*. If Value > Price, they buy. If not, they don't, no matter how good the copy is.

**Price is the comparison, not the value.** Most "lower the price" requests are actually "raise the numerator or lower the denominator" requests.

---

## Lever 1: Dream Outcome (numerator)

What the customer *actually* wants — usually one or two levels above the surface ask.

### Surface ask → dream outcome

| Surface ask | Dream outcome |
|-------------|---------------|
| "I want a website" | "I want more qualified leads I can close" |
| "I want to learn copywriting" | "I want to write copy clients pay me $5K+ per project for" |
| "I want a meal plan" | "I want to feel confident in a swimsuit on a beach in 12 weeks" |
| "I want fitness coaching" | "I want my back pain gone so I can pick up my kids without thinking about it" |
| "I want a Notion template" | "I want to feel in control of my work for the first time in years" |
| "I want to lower CAC" | "I want a marketing engine I can step away from for two weeks without things breaking" |

### How to increase

- **Name it specifically.** "Feel confident in a swimsuit" beats "lose weight." The specific name is the offer.
- **Connect to the bigger goal.** The dream outcome behind the surface ask is almost always emotional or identity-based.
- **Show the future state in concrete sensory terms.** What does the morning of day one *after they have it* actually look like?

### Common mistake

Pitching the surface ask. ("Get a website" instead of "get a website that brings you 5 qualified leads a week.") The bigger the buyer's pain, the more important this is — they're not buying a deliverable, they're buying a future.

---

## Lever 2: Perceived Likelihood of Achievement (numerator)

Do they actually believe they'll get the dream outcome? This is the single most underweighted lever — most offers are perfectly fine on the dream outcome side but the buyer just doesn't think it'll work *for them*.

### How to increase

- **Proof** — case studies with names, numbers, before/after metrics, photos. Specific > glossy.
- **Methodology specificity** — name your process. "The 5-step VAULT framework" beats "our proprietary system." Even if the substance is the same, naming it raises perceived likelihood.
- **Guarantees** — risk reversal directly raises perceived likelihood (more in [guarantee-design.md](guarantee-design.md)).
- **Reduce sample-of-one objection** — show people *like them* who got results. "Other people get results but I'm different" is the universal objection.
- **Pre-empt the failure path** — explicitly address what could go wrong and how you handle it. Builds trust faster than hiding the risk.

### Common mistake

Stacking more features ("we also include X, Y, Z") instead of stacking more proof. Features address dream outcome. Proof addresses likelihood. Most stuck offers need proof, not features.

---

## Lever 3: Time Delay (denominator)

How long from purchase to result. The denominator is doing a lot of work here — slow results don't just feel slow, they erode perceived likelihood (the longer it takes, the less the buyer believes it'll work).

### How to decrease

- **Faster first win** — find the smallest possible early result and engineer it into the first 7 days
- **Onboarding velocity** — replace a 60-minute kickoff with a 10-minute async intake + Loom send
- **Front-load the assets** — give the templates / swipe files / decks on day 1, not "throughout the program"
- **Faster end-to-end timeline** — "in 8 weeks" beats "in 6 months." If you can credibly compress, do.
- **Quick-start path** — explicit "first thing to do today" so they don't lose momentum

### Common mistake

Promising a faster timeline than you can deliver. The first time you miss it, perceived likelihood for every future buyer drops permanently as the failure story spreads.

---

## Lever 4: Effort & Sacrifice (denominator)

What the buyer pays *besides money* — time, learning curve, decisions, willpower, social risk, opportunity cost.

### How to decrease

- **Done-for-you over do-it-yourself** — DFY tiers move the effort to you. Charge accordingly.
- **Fewer decisions** — every decision the buyer makes is friction. Bundle, default, recommend.
- **Lower learning curve** — pre-built templates, examples, defaults. "We did the thinking, you do the executing."
- **Removed risk** — emotional risk (am I dumb if this doesn't work?), social risk (what will my team think?), opportunity cost (what am I not doing while I do this?). Address all three explicitly.
- **Async over live** — for many buyers (founders, executives), removing synchronous commitments is huge value
- **Less willpower required** — automation, accountability, environmental design

### Common mistake

Overestimating how much your buyer *enjoys* the work. They want the outcome, not the process. (Exception: identity-buyers — fitness, learning, mastery. For those, the process *is* part of the dream outcome. Read your buyer.)

---

## Diagnostic: scoring the levers

When an offer is stuck, score each lever 1–10 honestly. The lowest is the binding constraint.

### Quick scoring prompts

- **Dream outcome (1–10)**: Can the buyer picture, in concrete sensory terms, the day after this works? Is the outcome named specifically enough that they can repeat it back to a friend?
- **Perceived likelihood (1–10)**: Do they have at least three named, comparable proof points? Is the methodology specific enough to repeat? Have you addressed the "but my situation is different" objection?
- **Time delay (1–10)**: What's the first concrete win, and how soon do they get it? What's the end-to-end timeline? Are there any "delay surfaces" (onboarding lag, asset drip, week-1 friction)?
- **Effort & sacrifice (1–10)**: How much work does the buyer do? How many decisions? How much learning curve? How much synchronous time? How much emotional/social/opportunity-cost risk?

### Worked example: a stuck $3K copywriting course

Initial scoring:
- Dream outcome: 6 (`become a better copywriter` — too vague)
- Perceived likelihood: 4 (one testimonial, no methodology name)
- Time delay: 5 (6-month course, no first-win mechanic)
- Effort & sacrifice: 4 (lots of homework, live calls, weekly assignments)

Lowest: effort & sacrifice and perceived likelihood are tied. Pick one (perceived likelihood — easier to move and unblocks more downstream work):

- Name the methodology: "The VAULT framework — 5 angles every winning sales page uses"
- Add 8 named-customer case studies with before/after copy + revenue numbers
- Add an "even if you've never written before" cohort with 3 named graduates

After: perceived likelihood goes 4 → 8. Course converts at ~3x baseline. Two months later, attack effort & sacrifice (replace weekly live calls with async + 1 live Q&A).

---

## Key idea to internalize

**The price-vs-value comparison happens in the buyer's head, not yours.** You only know it's working when the buyer can articulate the dream outcome back to you in their own words, and when they don't need to ask "but does this actually work?"

If they're asking either of those questions, you have a value equation problem, not a copy problem.
