How to Build Irresistible Offers Using the Value Equation

What Is the Value Equation?

Here’s the formula Hormozi uses to define value:

Value = (Dream Outcome × Likelihood of Achievement) / (Time Delay × Effort & Sacrifice)

To increase value:

Let’s explore each part of the equation.

Dream Outcome (Increase It)

This is the ideal result your customer hopes to achieve.

It's not just “I want project management software”, it's “I want to hit every deadline with ease, feel organized, and have more time for what matters.”

Your role is to clearly show how your offer helps them reach that future. Speak to what they want to feel or become, not just what the product does.

🧠 Tip: Focus on outcomes that increase status, confidence, ease, or time freedom. That’s what drives action.

Perceived Likelihood of Achievement (Increase It)

Even if your product is amazing, people still ask, “Will this work for me?”

This is why perceived likelihood matters. If they believe it will actually deliver results, the offer becomes more valuable.

Build confidence with:

The more certain they feel, the more they trust the investment.

Perceived Time Delay (Decrease It)

Speed is value.

The quicker someone believes they will see results, the more attractive your offer becomes.

Think about:

People don’t want to wait. Even small, emotional wins early on can help build momentum and belief.

Perceived Effort and Sacrifice (Decrease It)

This is about how hard or painful the process feels.

It includes time, money, mental energy, and learning curves. Your goal is to minimize friction and make things feel easy.

Ways to do that:

The less effort it seems to require, the more likely they are to say yes.

A Real-Life Example: The Value Equation in Action for SaaS

Let’s say you’re launching a SaaS tool for project management. Here’s how to apply the Value Equation:

1. Define the Dream Outcome

Go beyond the technical benefits.

It’s not just “manage tasks”, it’s “run projects with clarity and confidence,” “improve team performance without the stress,” or “free up your evenings.”

2. Identify Potential Problems by Category

Use the Value Equation to identify doubts your prospect may have:

3. Deliver Strategic Solutions

Now, craft specific solutions for each concern:

To Boost Dream Outcome and Likelihood:

To Reduce Time Delay:

To Minimize Effort and Sacrifice:

4. Stack the Value, Trim the Cost

Once you've built your solution list, prioritize features that are high value to the customer but low cost for you. Then, bundle everything in a way that makes your core offer feel like a steal.

Example Bundle:

Perceived Value: $5,750+

Actual Price: $500/month

You’ve now created a massive price-to-value gap, which makes your offer feel like a no-brainer.

Final Takeaway

Alex Hormozi’s Value Equation isn’t just a business tool — it’s a mindset shift.

It helps you build offers people want to buy, because they feel confident they’ll get what they want, quickly and easily.

So the next time you’re creating an offer, ask yourself:

“How can I increase the dream and the certainty, while reducing the wait and the work?”

That’s how you charge what it’s worth.

That’s how you create value.

That’s how you build offers so good, people feel stupid saying no.