What Is A Value Ladder – Why It Can Either Make Or Break Your Business

Share this:

The point of any business is to offer a beneficial product or service to the perfect customer. There are many businesses out there that either struggle or close down because they cannot churn a profit.

The good news is that any business that is not making any money can be turned around to become a profitable business with the uses of a value ladder and sales funnel.

Let’s take a look at what a value ladder and a sales funnel are. Sales funnels are an important part of ClickFunnels and before I can tell you what a funnel is, I want to share what a value ladder is.

What is a value ladder?

A value ladder is a system that you are recommended to have in your business. You want to have different products at different prices where you are providing the correct value at the correct price based on the customer’s needs. 

When you create your value ladder, each offer should solve one problem and agitate another one. This way you can make people climb your value ladder. 

Why having a value ladder is important

You want a value ladder to grow your business and help so many people as possible. 

According to Jay Abraham, there are 3 ways to grow your business. 

1. Increase the number of clients, get more new prospects into paying customers
2. Increase the average transaction, get each client to buy more at each purchase
3. Increase the frequency that the average client buys from you, get each customer to buy from you more often

So how do you get more customers? You offer them a free or low priced product to get them inside your business. That way you can educate them further on how you can help them. 

You can increase the average transaction by using sales funnels, but you also want to do this with a value ladder where you increase the average customer value by offering more products. 

A value ladder is needed for every business that wants to grow. 

How many steps are there in a value ladder?

Now that you have an idea of what a value ladder is, you can build one for your own business. Every business’s ladder will be a bit different because every business has its own products or services. However, you can get a general idea of how to structure your ladder by seeing examples of one in action.

Most will have four steps to start, plus a back-end offer.

Here are what the steps look like:

• Freebie
• Front-End
• Middle
• Continuity Program
• Back-End

The important part to recognize here is that it’s not a matter of how many steps. It’s a matter of value levels that you deliver. You want to be able to take them to the next logical step (or give them the solution to the next problem).

Real-life value ladder examples

Value ladders are used in a host of different industries to entice, convince and create loyal customers.

To prove their popularity and effectiveness in the real world, I’ve put together a list of examples, some from branded companies and others that you’ll immediately recognize as industry-standard techniques.

Let’s dive in:

Personal Trainer (or Gym):

1. Free Training Session with a personal trainer
2. Paid Training Plan
3. Paid meal plan and nutritional advice
4. Regular paid training sessions
5. Subscription to classes
6. Full-year of training sessions (paid at discount from subscription)
7. Fitness training retreat (intensive course)

SAAS businesses (e.g. Aweber):

1. Free trial
2. Paid entry-level option (subscription)
3. Additional paid plugins (added to a monthly subscription fee)
4. Upgrade to a superior subscription plan
5. Upgrade to ultimate (highest level) subscription plan when the dependence on the SAAS platform grows.

Shaving Business (e.g. Harry’s):

1. Free shaving trial box (customer pays small s&h fees) delivered
2. Discounted razors for home-use
3. Repeat purchase of razor products (at full price)
4. Subscription to receive product delivered every month
5. Upgrade to receive the product more frequently

Dentist:

1. Free teeth whitening service
2. Paid minor teeth repair e.g. fillings
3. Teeth straightening service
4. Upgrade to premium teeth cleaning service
5. Paid retainer for regular check-ups
6. Paid subscription for regular teeth whitening and stain removal

What could happen if you do not have a value ladder in your business

• 90% of the customer lifetime value
• Drive and increase more sales, create stronger customer relationships, and customer loyalty, towards your products and services
• Providing value to each customer that he or she can afford by over-delivering
• Remain profitable while finding customers that want your high-end products and services

This last one is really important and why the small businesses end up failing. They find their target customer and try selling the perfect product – one that best serves their customers and keep the businesses open. But the target customer needs to be eased into this product. They’ll start small and slowly upgrade. Just like most people started with an iPhone then move into Macbooks. Without the value ladder, there’s no ‘ease’ products, the customer doesn’t buy, and the doors shutter.

By having a value ladder, the dentist turned a $37 dollar sale into a $3,700 sale and provided real customer value for a lifetime.

Final thoughts

More than ever, clients make their purchasing decisions based on value, not price. To show clients the value of what you offer, you need to build trust with them. With value ladders, you build that trust over a period of time. It also gives your clients more options, which means you
have more opportunities to make the sale.