Equal-or-Greater Value Rule
Approve an offer only when the customer receives at least what they give
- Difficulty
- Easy
- Time to result
- ~days to results
- Steps
- 5
- Confidence
- 91%
The equal-or-greater value rule evaluates an exchange from the customer's side. First identify who the customer is and what they contribute, whether that is money, time, attention, trust, or taxes. Then define the concrete outcome the offer or service delivers and compare it with that contribution. If the delivered value is lower, redesign the exchange rather than relying on persuasion to hide the deficit. Cloobeck extends the model beyond hospitality: citizens are customers of public institutions because they exchange tax dollars for services and outcomes. The output is a disciplined go/no-go test that keeps an organisation focused on the recipient's return instead of its own activity or intentions.
Origin
Cloobeck says his father taught him the rule in sales and marketing. He later used customer value to explain his hospitality approach and his view that taxpayers should receive value from government.
Core principles
- 01Every recipient is a customer
- 02Value must be judged against what the customer gives
- 03Delivery should meet or exceed the exchange
- 04The rule applies beyond commercial products
How to run it
- 1
Name the customer
Identify the person or group receiving the result. Do not let internal departments substitute themselves for the ultimate customer.
Pro tip Follow the exchange to the person giving money, time, attention, trust, or taxes.
Watch out A stakeholder with influence is not always the end customer.
- 2
Define what they give
List the full customer contribution, including non-cash costs such as effort and risk. Use the customer's perspective rather than the provider's cost base.
Pro tip Include switching and learning costs.
Watch out Price alone can understate the real burden of an offer.
- 3
Define delivered value
Specify the outcome the customer actually receives. Distinguish completed activity from a result the customer cares about.
Pro tip Express value as a customer-observable change.
Watch out Good intentions and internal effort are not delivered value.
- 4
Compare the exchange
Decide whether the delivered outcome is equal to or greater than the customer's total contribution. Use evidence where available.
Pro tip Ask customers what changed after delivery.
Watch out Provider enthusiasm can inflate the perceived value.
- 5
Redesign or reject
If the exchange fails, improve the outcome, reduce the customer burden, or stop the offer. Recheck the comparison after the change.
Pro tip Change the smallest element that restores a fair exchange.
Watch out Better marketing does not repair a value-deficient product.
In the wild
Cloobeck says the hospitality space lacked his meaning of yes and ties it to delivering equal or greater value. The rule centres the guest's return rather than treating service conventions as sufficient.
→ Customer value becomes the standard for deciding how the hospitality product should operate.
He applies the same rule to government: taxpayers give tax dollars and should receive equal or greater value. When they do not, he argues that the public should change who is responsible for delivering the service.
→ Public performance is judged by customer value rather than political labels.
Common mistakes
Measuring effort instead of outcome
A provider can work hard while still returning less value than the customer gives.
Ignoring non-cash costs
Time, complexity, risk, and lost trust can make an apparently cheap offer poor value.
Using promotion to mask a weak exchange
Persuasion may create a sale, but it does not make the delivered value fair.
Is it for you?
Best for
Product, service, policy, and operating decisions where a recipient gives money, time, attention, or trust.
Not ideal for
Situations where value cannot yet be observed and a bounded experiment is required to learn what customers value.
From the transcript
“Always deliver equal or greater value to your customer.”
“We're all customers. We're all customers.”
“We should get equal or greater value to our tax dollars.”
From the episode
Episode 500: From Broke to Billionaire: Stephen Cloobeck's $3.3B Mindset
From Broke to Billionaire