THE VALUE EQUATION
This is the ultimate, emotional end-goal that a customer wants to achieve.
What is the Dream Outcome?
Setting your price based on what competitors charge.
What is Competitive Pricing?
High-perceived value, low-cost items added to a core offer to boost its appeal.
What are Bonuses?
The formula ((Revenue - Cost) / Cost) * 100 calculates this.
What is ROI (Return on Investment)?
The four components of a "Mega-Offer."
What are Niche, Pain Point, Offer, and Angle?
Customer testimonials and case studies directly increase this component of the Value Equation.
What is Perceived Likelihood?
Pricing based on the perceived worth to the customer rather than your costs.
What is Value-Based Pricing?
"Only 10 spots left!" creates this psychological trigger.
What is Scarcity?
Total Campaign Cost divided by Number of Customers gives you this metric.
What is CPA (Cost Per Acquisition)?
This component refers to your specific, ideal customer's psychographics, not just demographics.
What is the Niche?
The two components in the denominator of the Value Equation.
What are Time Delay and Effort & Sacrifice?
A new streaming service offers $5/month for the first year to gain market share.
What is Penetration Pricing?
"Sale ends at midnight!" creates this psychological trigger.
What is Urgency?
(Clicks / Impressions) * 100 calculates this metric, which measures ad creative effectiveness.
What is CTR (Click-Through Rate)?
The deep, emotional problem your customer is actively experiencing.
What is the Pain Point?
A money-back guarantee primarily affects this part of the Value Equation by making the outcome feel more certain.
What is Perceived Likelihood?
Introducing a less attractive third option to make another option look better.
What is Decoy Pricing?
A guarantee that promises specific results (like grade improvement) or provides extra value if it fails.
What is a Performance-Based Guarantee?
The primary goal of running an A/B test.
What is "to compare two versions of one element to see which performs better"?
The unique mechanism, story, or guarantee that makes your solution stand out.
What is the Angle?
According to the Value Equation, to create maximum value, you must maximize these two things in the numerator.
What are Dream Outcome and Perceived Likelihood?
The "Porsche Method" of showing the most expensive option first aims to do this to customer perception.
What is "anchor the brand as premium" or "make other expensive options seem reasonable"?
In the "Jab, Jab, Jab, Right Hook" framework, this is the essential element that must be in the "Right Hook."
What is a clear Call to Action (CTA)?
In the Campaign Lab, the "hidden cost" that many forget to include when calculating true profitability.
What is staff time/labor cost?
A weak one of these components means your entire offer will crumble, no matter how good the others are.
What is "any of the four" or "the foundation (Niche/Pain Point)"?