Como Gerar Valor Para o seu Produto ou Serviço
By Bruno Faggion
BusinessFinanceStartup
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The Value Equation: How to Make Your Product or Service Irresistible - Summary
Key Concepts:
- Value Equation: A framework for understanding and maximizing the perceived value of a product or service.
- Dream: The desired outcome or aspiration that a customer hopes to achieve with a product or service.
- Perceived Probability of Achievement: The customer's belief in the likelihood that the product or service will help them realize their dream.
- Time Delay: The amount of time it takes for the customer to experience the benefits or achieve the desired outcome.
- Effort & Sacrifice: The amount of work, inconvenience, or compromise the customer must endure to use the product or service and achieve their dream.
- SaaS: Software as a Service, a subscription-based software model.
- Copywriting: The art and science of writing persuasive text for marketing and sales purposes.
1. Introduction: The Problem with Generic Value Propositions
- Many business coaches and gurus emphasize the importance of generating value but fail to provide practical steps for doing so.
- Businesses often settle for optimizing generic variables like "better raw materials," "better quality," or "better service" without truly understanding what customers perceive as valuable.
- Investing in these generic improvements may not lead to increased customer satisfaction, willingness to pay higher prices, repeat purchases, or referrals.
2. The Value Equation Explained (Alex Hormozi's Concept)
- The value equation consists of four key variables:
- Dream: What is the dream that your product or service helps the client achieve?
- Perceived Probability of Achievement: What is the perceived likelihood that the product or service will help the client achieve their dream?
- Time Delay: How long will it take for the client to achieve their dream using the product or service?
- Effort & Sacrifice: What effort and sacrifices must the client make to achieve their dream using the product or service?
- The equation is: Value = (Dream * Perceived Probability) / (Time Delay * Effort & Sacrifice)
- A larger dream and a higher perceived probability increase value. A shorter time delay and lower effort/sacrifice also increase value.
3. Example: Ebook vs. Liposuction for Six-Pack Abs
- Scenario: Two options for achieving six-pack abs: a $9 ebook and $30,000 liposuction.
- Ebook:
- Low perceived probability of success (e.g., 0.11%).
- Long time delay (e.g., a year).
- High effort and sacrifice (dieting, training).
- Liposuction:
- High perceived probability of success (e.g., 99%).
- Short time delay (instant, with a month of surgical recovery).
- Lower effort and sacrifice (surgical recovery only).
- Conclusion: Liposuction is perceived as more valuable because it offers a higher probability of achieving the dream with less time, effort, and sacrifice, justifying the higher price.
4. Applying the Value Equation to Different Business Models
- 4.1 Physical Products (E-commerce): Women's Pajamas (Zur Sleepwear Example)
- Dream: Better sleep.
- Perceived Probability: Increased by using breathable, natural fiber fabrics, strategic openings for air circulation, and clear communication of these benefits.
- Time Delay: Minimized by offering fast delivery (e.g., one business day in São Paulo).
- Effort & Sacrifice: Naturally low, as wearing pajamas requires minimal effort.
- Apple Example: Instant data transfer from old iPhone to new iPhone reduces effort and sacrifice, increasing perceived value.
- 4.2 SaaS (Software as a Service): Productivity App (Sunsama Example)
- Dream: Work-life balance, focus, and calm.
- Perceived Probability: Increased by integrating a to-do list, calendar, and time estimator into a single system.
- Time Delay: Minimized by offering a 7-day challenge to help users adapt to the app quickly.
- Effort & Sacrifice: Reduced by integrating with other apps (e.g., Google Calendar) to import existing tasks and appointments.
- Air Fryer Analogy: Like the air fryer (electric oven + fan), Sunsama combines existing technologies in a novel way to create added value.
- 4.3 Online Courses: Copywriting Formation (Ícaro de Carvalho Example)
- Dream: Earn $20,000 per month as a copywriter, work from home, and work with big names in the industry.
- Perceived Probability: Increased by offering pedagogical accompaniment, tests, certificates, and partnerships with industry leaders for internships (e.g., Pedro Sobral, Priscila Szilo, Betina Rudolf). Data showing 70% employability of past students.
- Time Delay: Addressed by providing four months of structured accompaniment to ensure students complete the course and get certified.
- Effort & Sacrifice: Reduced by including AI tools (AI mentor and AI for work) to assist with learning and content creation.
- 4.4 Services: Content Agency Example
- Dream: Post content every day on all networks without learning anything about content of social networks and without having to do, having to record every day.
- Perceived Probability: High, as the agency handles all content creation.
- Time Delay: Short, with initial content delivered within a week of the interview.
- Effort & Sacrifice: Minimal, requiring only a two-hour interview per month.
- Key Insight: Services often have a high perceived probability of success, so focusing on reducing time delay and effort/sacrifice can significantly increase value.
5. Conclusion: Optimizing the Value Equation
- To generate value, businesses must:
- Identify the dream their product or service helps customers achieve.
- Increase the perceived probability that the product or service will help customers achieve their dream.
- Reduce the time it takes for customers to achieve their dream.
- Reduce the effort and sacrifice required from customers.
- By analyzing these variables and comparing them to competitors, businesses can gain a clear understanding of the value they provide and identify opportunities for improvement.
- The elements within a product or service should be designed or modified to improve the variables within the value equation.
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