Value Ladders Explained

Value Ladder – All You Need To Know

As a business owner, maximizing the lifetime value of your customers is essential to scaling your business. One of the simplest yet most powerful strategies to do this and skyrocket your revenue is by implementing a value ladder.

What Is A Value Ladder?

A value ladder is a marketing strategy illustrating a series of offers that increase in price and value that meet people where they are on their journey to become a paying customer — from initial awareness to their final decision to buy your premium offerings.

Value Ladder Explained Simply

Value ladders work because as humans, we are hardwired to seek more rewards (value) from the same places that we have previously found them. Therefore, they are an effective way to build trust, inspire brand loyalty and ultimately maximize the lifetime value of each customer.

If mastered, value ladders can take your business to a completely different level.

The Power Of A Value Ladder

The cost of acquiring a new customer is exponentially more expensive than retaining an existing one. Consequently, if you have no additional offers for an existing customer once they have made a purchase, you’re missing a massive opportunity to maximize the lifetime value of that customer. This is the power of a value ladder.

By having different offerings at varying degrees of value, not only will you be able to upsell new offers to existing customers, but you’ll also have something to offer your new customers based on where they are in the decision process, what they need and how much they’re willing to spend.

Furthermore, it is a well-known law of sales that once someone makes a purchase from you, no matter how small, they are exponentially more likely to purchase something else from you again.

Value Ladder Mission Statement

In his book, DotCom Secrets, marketing and sales funnels expert Russel Brunson explains how before creating your value ladder, you first need to create a Value Ladder Mission Statement (VLMS) that defines the ultimate result that your customer wants to achieve. Each step within your value ladder must then be a solution that is designed to fulfil your VLMS.

Here is a template you can use for your Value Ladder Mission Statement:

I/We help [insert who] to [insert what result they want to achieve] through [insert how you’re going to achieve it].

Everything you create within your value ladder must be focused on getting that specific result, to those specific people through that specific process. For example, the value ladder mission statement for a dentist would read something like this:

We help families in our community to increase their confidence through creating a beautiful smile they are proud of.

How To Create A Value Ladder

Typically there are five steps to a typical value ladder; Free Offer, Intro Offer, Lead Offer, Core Offer and Loyalty Offer.

However, it’s important to understand that a value ladder will be different for every business ― the number of steps and the products or services you offer will be different. You may even chose to create a different value ladder for each core offer. It’s also important to know that your prospect may jump on and off your ladder at any level and at any time.

The key is to first identify your highest level offer ― once you know where you are leading your prospects, you can more easily and effectively create a logical related series of offers that guide them there.

Below we’ll unpack a typical example of a value ladder along with some examples of what you can offer at each step.

  • Step 1 ― Free Offer

The goal of your Free Offer is to build rapport and generate leads.

Customers only buy from brands they can trust. Therefore, a free offering is an effective way to establish that trust by demonstrating your expertise which in turn will encourage them to move up the ladder and purchase your next offering.

Your Free Offer also generates reciprocity. When you provide value to your customers for free, they will feel obliged to return that generosity by purchasing from you again.

It’s important to obtain your prospect’s email address during this step in exchange for what you’re offering. You can then, through the use of email, nurture your relationship with them and continue building trust.

Examples for this step of the ladder include e-books, free samples, free trials and videos.

  • Step 2 ― Intro Offer

The goal of your Intro Offer is to convert as many of the people who claimed your Free Offer into paying customers.

Your Intro Offer will require a small financial commitment but it will provide greater value than your Free Offer. It must build on the problem you solved through your Free Offer and you must continue nurturing your relationship and strengthening trust.

Examples for this step of the ladder include e-books, workshops, webinars and courses.

  • Step 3 ― Lead Offer

The goal of your Lead Offer is to increase your revenue and profit.

Your Lead Offer will require a larger financial commitment than your Intro Offer but will provide even greater value. It must build on the problem you solved through your Intro Offer and again you must continue nurturing your relationship and strengthening trust.

Examples for this step of the ladder include group coaching, workshops, webinars and courses.

  • Step 4 ― Core Offer

The goal of your Core Offer is to solve your customer’s biggest problem.

Your Core Offer will require a larger financial commitment than your Lead Offer but will provide even greater value. Due to the nature of your Core Offer and its premium price, only a small percentage of your customers will ever get to this step of your value ladder. The majority of your sales will come from steps 1-3.

Examples for this step of the ladder include comprehensive courses, 1-1 coaching, workshops, webinars and retreats.

  • Step 5 ― Continuity Offer

The goal of your Continuity Offer is to generate predictable and repeatable income.

Your Loyalty Offer extends the benefit of your Core Offer by providing on-going value that continues to help your customers solve their problem. This generates on-going revenue and allows you to maintain an on-going relationship with them.

Examples for this step of the ladder include on-going 1-1 coaching, workshops, webinars, retreats, memberships, subscriptions and private paid groups.

Summary

A value ladder is a strategy for visually mapping out your product or service offerings in ascending order of value and price that allows you to earn trust and nurture the relationships with your customers.

There are typically five steps to a typical value ladder; Free Offer, Intro Offer, Lead Offer, Core Offer and Loyalty Offer.

By creating different degrees of value-based offers that correspond with where your customers are in the decision-making process, you’ll not only be better positioned to generate new customers and maintain existing customers, but to also maximize profit and the lifetime value of them.

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