Wouldn’t it be fantastic if we could instantly increase our company’s takings by 10%, 50%, or even 100%?
Don’t worry, I’m not trying to sell you some too-good-to-be-true service – there is a way to increase the value of every one of your sales, and you don’t have to pay some online ‘guru’ to help you do it.
So, what is this not-so-secret way to increase your company’s financial success? Value ladders.
If you implement a carefully-crafted value ladder to the services you provide your clients, you’ll be able to get serious results for your business. You’ll increase the value of every sale you complete – which means more money and less stress in the long term.
Sounds too good to be true? Well buckle up, we’re going to tell you exactly what a value ladder is, what one can do for your business, and how you can start mapping out your own today.
Let’s get started.
What is a value ladder?
A value ladder is essentially a method of visually mapping out your products or your services in ascending order of price and value.
It’s the perfect tool to help you cater to all of your clients’ needs no matter where they’re at.
Value ladders aim at getting potential clients into your sales funnel and nurturing them long-term to become repeat customers.
At the bottom of your value ladder, there’s free content that your potential clients can download and access in exchange for their contact information, usually their email – otherwise known as a ‘lead magnet’.
As these clients ascend your value ladder, they’re met with other offers. These options gradually increase in price as they go up – but they also increase in value. This increase in value makes your company and its products or services more appealing to your potential clients.
Essentially, the value ladder takes interested prospects on a buying journey until they’re ready to purchase your premium product or service package.
A value ladder is an incredibly effective way to increase the trust between you and your clients while maximizing the lifetime value of each client.
Why your business should be using a value ladder
It can be difficult to get people to buy from you straight away. People buy from companies they like and trust – which takes time.
There isn’t a magic word you can use to get your potential clients to hand over their money instantly, but you can use a value ladder to help guide them along.
If you use a value ladder you can meet people at whatever stage they’re at in the decision-making process. Whether they’re almost ready to commit to buying your product or they’ve only just discovered your business, a value ladder will help you connect with them and give them what they need at the stage they’re in.
Your value ladder leads them to eventually buy your top product or service by offering them smaller alternatives at lower prices in the beginning of their interactions with your company.
How does a value ladder work?
Value ladders essentially work on three premises.
1. Uses customer psychology and increases retention
This is one of the benefits that makes value ladders so important. Everybody knows that as soon as a person makes a purchase from you, no matter how small, they’re more likely to purchase from you again.
It’s a lot less expensive (and labor intensive) to sell to an already-existing customer than it is to get a new one which is why using a value ladder is so helpful.
If somebody is interested in your product or your service but they’re not quite sold or they don’t have enough to be at a stage where they can buy your premium offer then all you have to do is show them the lower ticket offer.
By giving them this lower, sometimes free, offer you can get access to their contact details and pitch them upgrades that:
- Solves their problems
- Gives them an easy-to-understand outcome
- Is priced according to the value of the outcome
- Builds on the trust you’ve established as the expert
2. Upsells service offerings
As soon as you’ve got all the steps (or rungs) on your value ladder ready you’ll be able to upsell along the clients’ journey. For example, if your client starts out with your low-priced offer you can try to upsell them to the next stage. Then after they bite this offer you can introduce them to the one higher than that and so on.
You can also experiment with the order. Your potential clients don’t necessarily have to go through each step. You could hold a webinar, which would be a low-priced offer, and after that send them an email enticing them to go for your highest offer. If they enjoyed the webinar and felt you provided them with valuable information then they’ll probably jump at the chance to check out what your premium content is like.
3. Extends the lifetime value of a customer
By incorporating different values into your lineup you’ll be able to extend the lifetime value of a customer.
The introductory or lower-priced offer sets your customer up and hooks them into your business. By exposing them to your stream of higher offers you can keep them interested and increase the length of time they stay with your company as a loyal customer.
How to create a value ladder
To get your value ladder up and running, you’re going to want to come up with four offers – each building on the last.
1. Free offer
The purpose of your free offer is to generate leads and get people interested in your company. With free offers, you’ll be able to demonstrate your expertise and show your potential clients how you can solve their problems.
Your free offer has to be something that is valuable to your potential clients otherwise they won’t be interested. Remember that just because it’s free doesn’t mean it can’t have value.
Examples of free offers you can use are:
- Downloadable content
- Free ebooks
- Introductory courses
This free offer might get people to your website but that doesn’t mean they’re going to want to commit straight away. It might take a good few interactions with your company to get them to invest in what you’re selling.
2. Intro offer
This is the lowest price of the paid options that your company has to offer. It should solve a problem that your audience has – and offers a bit more value than your free offer.
You’re still nurturing trust with your audience so your intro offer should be valuable and it should solve a specific problem that your client has.
Some examples of intro offers are:
- Paid workshops
- Paid webinars
- A mini-course
Your intro offer isn’t designed so you can make a lot of profit but more so to quickly turn a visitor into a paying customer, so you can encourage them to move onto higher offers later on.
3. Lead offer
Your lead offer will cost more for your customers but it will have much greater value. These are all designed to be profitable and your lead offer should completely wow your clients.
Try to focus your lead offer on a specific outcome to show your clients that they’ll be able to achieve something important to them. This offer needs to solve problems – and shouldn’t create any issues.
For example, you shouldn’t offer an audit at this stage, as it’ll only bring up issues for the client. Instead, offer them a road-mapping session to help them see what their opportunities are.
Some other examples of lead offers are:
- A playbook
- Road-mapping sessions
- Digital marketing strategy
- A full course
- A consultation session
4. Core offer
This is the offer that solves all your customers’ problems. You pull out all the stops to make sure that you and your business can solve your clients’ problems with this offer.
You should price your core offer based on the value or the perceived value of the outcome. So in this regard, the sky’s the limit. Depending on what services you offer depends on how much your core offer is going to cost.
Some examples of a core offer could be:
- 1-on-1 services
- Full courses with multiple modules
- Detailed strategies for business success
Getting your value ladder set up and organized can be a bit daunting, but luckily for you our expert team is here to help you figure it all out.
So, if you’d like help figuring out your value ladder and how best to attract and serve your customers, get in touch today!