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Why you must have a value ladder

Why you must have a Value Ladder

A value ladder, referred to as a brand ladder or marketing ladder, is a group of offerings that both increase in price and value as you move from left to right. It is usually depicted with a set of stairs.

Image Source: https://colinscotland.com

A value ladder can do so much for you and it’s really a must-have for any business owner.

What can a value ladder do for you?

First, a value ladder meets people where they are this way.  

By implementing a value ladder, you are able to increase a customer’s lifetime value, LTV.  Providing lower-cost items that build in value as cost increases allow you to build trust with your audience early in the customer journey and still make some money along the way. 

Additionally, you’re still meeting the customer needs and adding value, even at the lower level offers. Most value ladders work best when immense value is given even in the early steps. This allows you to show your worth to clients and build trust.

But let’s dive in a little more.

A value ladder is not about squeezing money from people and helping them max out a credit card to two. That’s not the point of a value ladder, even though a lot of marketing “experts” out there will tell you, it is.

If you’ve read any of my other blog posts on finding your why (where you identify your niche) or how to take your clients on a journey from prison to paradise. You know that my model of work is very client-centric. That’s not going to change in regard to a value ladder.

It’s all about maximizing the number of customers and providing value commensurate with that cost all the while building trust as they move through the different phases of the client journey.

Jeff Green

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So, you need a value ladder because it will increase the number of clients and the lifetime value of the average customer.  It’ll also help you produce happy customers.

Second, a value ladder helps you produce happy customers?

Throughout that client journey, “clients to be” will touch various parts of your value ladder steps required to move them from prison to paradise

This is an important point, as what your audience and ideal client really desire is to find internal relief from the problem they are experiencing.  Even if and when your customers show up with an external problem, which they will, the underlying problem you need to meet is internal and is found in the look, sound, and feel of your audience.

Why do you need a value ladder?

As I noted above a value ladder or brand ladder increases the lifetime value of clients. It’s really that simple. Anything that produces increase in revenue is a must.

For example, how would you like to take your business from where it is and increase your revenue by 30%, 80%, or even 200% by adding value through multiple offerings at different levels?

It can happen. I’ve seen it happen over and over. Take for instance, John.   

John has a business where he provides $750 a month search engine optimization for X, Y, and Z ideal customers. The problem is John gets a lot of leads that say they don’t have $750 to spend or perhaps they don’t trust John enough to spend $750.

If John provided a free offer at the beginning, such as a one-on-one SEO audit with a zoom chat alongside help to the client, that would build a lot of trust.

Then perhaps that client was given the option to take a $67 interactive online course of John’s creation that would teach said customer to do SEO on their own. Then the outcome would be two-fold. 

Increased trust is built at each step.  Additionally, the client get’s more comfortable with John with each interaction, which moves the client journey along. 

However, that’s not where this story ends. 

On the client-side, they also receive loads more value than the free 45-minute SEO audit.  They are learning to do SEO themselves with John’s online course.

Each client gets to spend hours listening to John. 

In John’s business he makes a little money on the sale he would have otherwise not made if he only offered the $750 price point.

But there’s more, what if John then offered an upgrade to the SEO course, perhaps it is $97 a month, where the customer receives one-on-one access to John for a limited amount of time each month.  

Maybe John decides to provide help for 90-minute group calls to those in this upgrade twice a month.  This increases customer perceived value as they now have direct access to John.  It also increases the lifetime value of each customer as there are points on the ladder below $750 for each customer. 

value ladder bulls-eye offer
Bulls-eye offers are your goal!

I think you get the picture at the end of the customer journey. The final step in the value ladder is John’s bullseye offer, which is his $750 a month SEO package. When John only offered the bullseye he was leaving a lot of money on the table and lowering his potential customer reach.  Don’t do this.

Plus, this is very important, John has now built trust with his prospects under multiple touchpoints, which makes it far easier to sell the bullseye offer.

The scenario above alone paints an all-in picture of why you need a value ladder in your business. But what are the other reasons to implement a value ladder?

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Why else do you need a value ladder?

As I said, multiple times throughout that illustration, it builds trust. This really can’t be overlooked.

The Psychology of buying and customer behavior

The psychology of buying and customer behavior is quite interesting field, but not in the ballpark of this discussion. However, it’s been shown that to get a customer, to pay top dollar (your bullseye or top of the ladder offer) there must be trust.

In other words, people vote with their money.

If they’re not paying you, they’re not ready to vote or they vote against you. You have to put customers in a situation where they feel comfortable spending money because spending money leads to spending more money, which leads to two things.

And this is important.

It leads to a better outcome for your client in the end, because there’s more value as they spend money. Your free offer will never help them to the same extent that a paid bulldog offer will help them. You know, this and deep down inside, they know this, but part of the customer journey is walking through the process of understanding this

Source: Simplified marketing funnel example from aweber.com

The Value Ladder helps organize the customer journey.

You’re able to meet people where there are if you’ve ever seen conceptualizations of the marketing funnel, there’s a whole slew of different versions. Most will look something like the picture above.

Most marketing funnels will be broken into at least three parts. Awareness or some other word like that depicts a similar concept. Next, you have consideration and research. And finally, a decision is made by your customer.

With a value ladder, you create offers at different levels, which help the buyer journey along.

Awareness

Awareness in the value ladder is akin to something like a free offer

Consideration

Consideration on the other, hand might be a low price offer, or maybe it’s another free offer.

Research

Research is your lead offer or a mid-tier offer on your value ladder.

It’s when they’re testing the waters and trying to find it, if you’re the real deal or not.

Conversion

And finally, the bullseye offer is the conversion part of the funnel. It’s where your potential customer is ready to pay top dollar. Why? Because they know through your messaging that you are the only person that can satisfy their needs.

You’re the only person that can do it the way they need it done. And therefore they’re willing to pay you more than they want to pay you to remove the pain that they feel.

Therein is an important point. Having tiered offers in the value ladder allows people to jump in or to taste the product. At a minimum cost or investment to themselves, in the end, this helps move potential clients through the customer journey.

One thing that’s interesting about the funnel image provided above is if you turn it on its side, you can build a value ladder out of it. As shown below.

value ladder meets the Marketing funnel
Value Ladder meets a Funnel By Green Thoughts Consulting

Value Ladder Examples & Thoughts

I wanted to uncover a few final points to note regarding the value ladder and common mistakes.

You should focus on an internal problem that your audience has.

I’ve written about this extensively in my prison to paradise and finding your why articles. It’s foundational to understanding the inner life of a value ladder and in my humble opinion must-read material.

Often of times what people really need and what they think they need are incongruent. For example, a client may believe they need you to fix their website copy, but in all honesty, the internal problem that they’re struggling with is that they need to make more money or get more leads.

You will want to sell them on the emotional problem. This is discussed in depth within the must-read article on the customer journey. Then and only then can you give them the external solution that they need. This is what creates a happy customer and in doing so, it changes the way they think about themself and the experience itself.

“You need to design offers and copy that meet and focus on the internal outcome rather than what your client thinks they need or the external outcome.”

Jeff Green

If you found the problem you solve through finding your niche and then learned to move customers from prison to paradise, this will get you there. Well, let’s walk through a few examples of a value ladder that someone like yourself might try to build. And some of the hotspots throughout that can cause problems.

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Example 1- The Accountants Value Ladder

First, what problem does an accountant solve? Fairly simple. They provide financial support to individuals and businesses. Hopefully, if you are Jim, our accountant, you have worked through finding your niche and you are more specific in your answer.

Jim takes care of bookkeeping and the accounting for artists that sell products online. He has worked through the ins and outs of his specific ideal customer journey. His value ladder looks something like the below.

Free Offer(s)– Jim has 14 free offers for potential clients. They range from checklists for the end of year to tutorials and eBooks on how to setup Freshbooks for your accounting.

Low Tier Offer– The businesses offers a 47 dollar set of accounting templates for those interested in keeping their own books.

Mid Tier Offer(s)– Jim has 2 courses that you can get for $247. One is a course that teaches you to do bookkeeping using Freshbooks. It contains worksheets, homework, actionable items, and over 17 hours of video learning. He has another course that provides similar value on a different topic.

Mid Tier Offer(s)– Jim also provides a 1 on 1 upgrade with each of his courses that are priced at $197 for two 90 minute group Q&A sessions every two weeks.

Bulls-eye Offer– Finally the accounting firm provides both monthly subscriptions for bookkeeping services and the filing of business taxes. The cost varies based on the complexity of the business, however, rates start at 247 per month for bookkeeping and 497 for base business taxes.

Example 2: Online Coaches Value Ladder

Nicole is an online business coach who was struggling in business prior to creating a value ladder and niching down. Her business has never been better after implementing our must-read articles on finding your why, the customer journey, and implementing a value ladder.

Nicole works with solopreneurs, entrepreneurs that work alone, specifically she works with solopreneurs in engineering vertical.

Free Offer(s)– Nicole has built, through a commitment to a creative mindset, 21 “lead magnets”. These allow potential clients to get help for free and likewise get to experience Nicole’s expertise.

Low Tier Offer– Nicole is an author and has written a book about finding your ideal clients on LinkedIn. She sells the book to prospects in exchange for an email and $7.

Mid Tier Offer A- Online classes on how to improve your lead generation and marketing for consultants in the engineering vertical. It sells for $397 per month and includes all 9 of Nicole’s courses on the subject.

Mid Tier Offer-At this level the value increases and Nicole provides a 4-hour package where she helps engineering solpreneurs (usually consultants) learn to market themselves more effectively. The cost of these 4 hour in-person or zoom sessions is $997.

Bulls-eye Offer– This ongoing marketing and coaching help is done with you. The packages start with a 90-day package that auto-renews without cancellation. It includes Nicole’s proven system to move you from prison to paradise and up to 8 hours of 1 on 1 work per month. The cost is $4947 for 90 days.

value ladder success involves action

Take Action- Build a Value Ladder

Okay. Don’t just let this sit as knowledge in your head. My, I would encourage you to download my value ladder, worksheet, and tutorial to help you walk through this process. And what do you know? It’s free.

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