### Alex Hormozi's Business Value Framework Cheat Sheet ![[Pasted image 20240516134726.png]] #### Core Formula for Value  **Value = (Dream Outcome x Perceived Likelihood of Achievement) / (Time Delay x Effort & Sacrifice)** #### Key Components 1. **Dream Outcome** - **Definition**: The ultimate result or benefit the customer desires. - **Goal**: Increase the perceived value of the outcome. - **Examples**: Improved health, increased wealth, better relationships. 2. **Perceived Likelihood of Achievement** - **Definition**: The customer's belief in the probability of achieving the dream outcome. - **Goal**: Increase the customer's confidence in achieving the desired result. - **Strategies**: - Provide testimonials and case studies. - Offer guarantees and risk reversals. - Show proof of concept and success stories. 3. **Time Delay** - **Definition**: The time it takes for the customer to achieve the dream outcome. - **Goal**: Decrease the time delay to increase perceived value. - **Strategies**: - Offer quick wins and immediate benefits. - Use technology to speed up delivery. - Communicate clear timelines and milestones. 4. **Effort & Sacrifice** - **Definition**: The amount of work and resources the customer must invest to achieve the dream outcome. - **Goal**: Decrease the effort and sacrifice required. - **Strategies**: - Simplify the process and provide step-by-step guidance. - Offer done-for-you services or automation. - Reduce friction points and make it easy to get started. #### Practical Applications 1. **Creating a Grand Slam Offer** - **Definition**: An offer that is so compelling it becomes a no-brainer for the customer. - **Components**: - High Dream Outcome - High Perceived Likelihood of Achievement - Low Time Delay - Low Effort & Sacrifice 2. **Market Selection** - **Criteria**: - Growing market with unmet needs. - Customers with high purchasing power. - Easy to target and reach. - **Examples**: Health, Wealth, Relationships. 3. **Pricing Strategy** - **High Price Strategy**: - Increases perceived value. - Attracts high-quality clients. - Allows for better margins and reinvestment in the business. - **Low Price Strategy**: - Decreases perceived value. - Attracts price-sensitive clients. - Reduces margins and limits growth potential. #### Enhancing Perceived Value 1. **Communicate Clearly** - Use simple and direct language. - Highlight key benefits and outcomes. - Address common objections and concerns. 2. **Leverage Social Proof** - Share success stories and testimonials. - Showcase case studies and real-world results. - Use endorsements from credible sources. 3. **Offer Guarantees** - Provide money-back guarantees. - Offer performance-based guarantees. - Reduce risk for the customer. 4. **Create Urgency** - Use limited-time offers. - Highlight scarcity (limited availability). - Encourage immediate action. #### Final Thoughts - **Resilience**: Keep trying different offers until you find one that works. - **Commitment**: Stick with your chosen market and refine your approach. - **Perception**: Focus on how the customer perceives value, not just the actual value. By understanding and applying these principles, you can create offers that provide immense value to your customers and drive significant business growth.