Jan
Jan

What Is A Value Ladder And Why Does It Matter?

Uncovering the truth about the value ladder & why you need one for your business

If your business is going to survive and thrive in 2021 then you need to make sure that your value ladder is dialed up and ready to go!

But maybe you’re wondering – what is a value ladder?

The definition of a value ladder is: the value ladder is a tool used in a business as a way to plan and map out ways you can deliver increasing levels of value to your clients at a variety of different price points.

Without a value ladder your online business will struggle, and it could even completely collapse.

But did you know there’s a trick to getting your value ladder right?

Let’s go over just what those steps are so you can get your own value ladder built fast, and do it the right way.

You ready?

Let’s jump in.

What is a value ladder?

What is a value ladder?

It’s vital to any online business in 2021 to make sure you’re being tactical and strategic about how you build it, and one of the cornerstones of most successful online businesses is the concept of the value ladder.

Not all the people who are your dream customer are at the same place on their customer journey.

Some are relatively new to the game, while others have more experience and have different needs.

When you build your value ladder correctly, your value ladder leverages your ability to deliver results for your dream customers in a way that meets them where they’re at –  it covers the full spectrum of the ways you can help your dream customer find results, wherever they are on their customer journey.

Value Ladder & Russell Brunson

value ladder russell brunsonMy first encounter with the concept of the value ladder came as a result of reading Russell Brunson’s Dot Com Secrets.

You see, for me, I’d been trying to figure out the online business puzzle for a long time.

I’d done e-commerce stuff and sold stuff on eBay.

I had my own online stores.

I tried a lot of different stuff, but I wasn’t having the kind of success that I wanted to have.

That is until I learned the things I learned in Dot Com Secrets and from Russell Brunson.

The number one thing I look to when I’m trying to figure out whether or not I want to spend money on someone’s books, training or courses, is what results have they generated for themselves, and for others.

And I was blown away by the things that Brunson has achieved.

But it wasn’t just that – it was the results that he’s delivered for his others.

And one of the core ways he delivers those results is by helping his clients build their own value ladder.

In Dot Com Secrets Russell Brunson makes the simple point that the value ladder, “gives you a vision on how you plan on serving your dream customers and where you want to take them.”

Think about it this way:

Whenever one of your dream customers comes into your world they have a destination they’re trying to reach.

It’s kind of like Dorthy, in the Wizard of Oz.

What is a value ladder

She wanted to get to Oz, and she found out that in order to do that, she needed to follow the yellow brick road.

On that yellow brick road there were steps and processes she had to complete.

She went through the whole process of steps needed to get to the ultimate result she was trying to achieve – to reach Oz.

The customer journey for success is very much the same.

Your customers for your business have an ultimate goal they want to reach, right?

And you have a way to help them get the results they’re looking for, right?

The value ladder can solve all these problems and more.

There’s somewhere you’re trying to get with your business, and somewhere your dream customers are trying to get.

Your job is to be the guide who leads them down the yellow brick road of the value ladder will get you there.

You do this by creating a value ladder where your products and services match up with your dream customer’s needs and deliver solutions to them in ways that meet their budget, that provides value at every step, and as you ascend the value ladder the price goes up and the level of attention, service, and access  goes up too.

Why your business needs a value ladder

Here’s the deal:

A well-constructed value ladder will give you a lot of options for new ways to serve customers that you otherwise wouldn’t have had the opportunity to serve.

Hear me out:

Sometimes people are the right fit for your business, and need you to deliver the results for them that only you can deliver.

However, they’re at a point in the customer journey where they can’t afford to pay for your flagship product or service.

Without a value ladder, these people wouldn’t find the result they’re looking to achieve and your business would be out the revenue that they’d otherwise be paying to you.

Here’s an example:

When I first got started as a web designer I exploded out of the blocks and was seriously busy.

And some of the calls I was getting were people that really wanted the help that I could deliver, but they couldn’t afford the rates I was charging.

But at that point I didn’t have a solution for them, even though these were very clearly people in my target audience, and I knew I could help them.

This happened because I didn’t have anything for them at that level of my value ladder.

This let them down and it didn’t do anything to grow my business.

So I created WPLaunch – a simple done-for-you service that met all their needs and fit perfectly into my overall business model – it was a win/win.

What is a value ladder and why should I care?

You’ve heard the old saying, “what you don’t know won’t hurt you,” right?

This is one of those things where ignorance is not bliss, and what you don’t know most certainly can hurt you and your business.

Think about it this way:

A value ladder gives you the ability to increase the amount of money your customer spends with you.

But it’s not only that.

It also gives your business the ability to deepen your relationship with your customers by providing them the tools and resources that meet them where they’re at.

It increases customer loyalty – which is exactly what you want.

Let me tell you a quick story.

When I first graduated from Florida State I had a job working in sales for a telecommunications company.

And one of the key principles that the company that I worked for would constantly preach is the value of the bundle – not only to the customer, but to the company.

The bundle would include long distance phone service, cellular phone service, and internet service.

In most instances the customer would start their relationship with the company by coming through the door of a retail location looking for just one thing – cellular service.

But we’d then ascend those same customers up the value ladder by bundling together a suite of services that, when combined together, would save the customer money.

We delivered increasing value by bundling elevated levels of service that made the customer happy and ultimately helped the company with their sales and customer retention goals.

Bundling services would decrease the likelihood of that customer cancelling their service because it was more difficult for the customer to find replacements for all those things, and yet at the same time make the customer’s life easier and cheaper.

Building a value ladder is kind of like this idea of bundled services because it gives you the ability to sell that same customer additional solutions that not only provide greater value to your customer, but also increase their commitment and loyalty to you as the provider.

For service based businesses it empowers you to be able to sell additional things to people who are already buying your service.

How to build a value ladder

So now that we know what a value ladder is, why it’s important and why your business needs one, let’s talk about how to create your a value ladder for your own business.

Admittedly, this was something that was really hard for me to figure out at first.

My notes are still littered with all the variations of value ladders I’ve constructed over the years.

But once I figured out how to do it, it’s like I’d been stuck in a dark room and someone finally turned on the lights – i could finally see the whole picture as clear as day!

Step 1: who is your dream customer?

We start with this:

Who is your dream customer?

The wrong way to do it is starting with a product then trying to figure out who you’re going to sell it to.

The right way to do it is to figure out who your dream customer is and then figure out what problems they’re having and how that’s causing pain in their life.

Step 2: what’s the ultimate result you can deliver for them?

Once you’ve figured out who your dream customer is, you need to figure out, what’s the ultimate thing that you can do for them? What’s the best way for you to provide a solution to your dream customer’s problems?

Step 3: What are the supporting results – or “core” area results they need to achieve in order to get to the ultimate result?

Now that you know the one big thing that they want to achieve and the ultimate, most amazing way you can deliver that for them, you need to figure out what the different parts of that ultimate solution are: what are the core parts or pieces of the ultimate solution? How would you quantify the different things they need to accomplish in order to get to that ultimate result?

Step 4: What is the subset of results they need to get in order to achieve the “core” result?

Each “core” component of the ultimate solution has smaller, more quantifiable parts. Outline the things they need to do in order to complete each individual core result area.

Step 5: What’s the sexiest, most exciting thing you deliver to them that introduces them to your world?

Now, as you see all the various parts of what needs to be done to complete the core areas along with their sub-areas, or “splinter” areas, figure out which one of those is the most enticing and will generate the most excitement in your dream customer.

Then finally, now that you’ve figured out each of those things, you then align your products & services with each step of the process.

Your ultimate flagship product is the one that’s the most high-value, high-touch product that will help your dream customer achieve the result they’re trying to achieve.

Your core result products are the supporting things your dream customer needs to achieve to help them get closer and closer to the core result, so you align products and services for each of these core areas.

Then for each of the core areas where your dream customer is trying to achieve a result there are things they need to achieve to get there, and those are your splinter result products.

Then for each of those “splinters”, you create or align your existing products & services to draw your dream customer into your world on autopilot.

I know we’ve covered a lot of stuff here, so let me give you an example.

Value ladder example

An example of what this looks like practically might help at this point.

(by the way – if you want to get some hands-on training with any of this stuff, there’s some amazing stuff for you in the new version of the One Funnel Away Challenge, that’s all new for 2021)

Think about it this way.

A good example for this would be, flying out to your customer’s location then working with them directly to get the result for them.

Your Flagship Offer

This is your “flagship” offer – the most high-touch, high-ticket way you can help your dream customer.

Your flagship offer is for your customers that are farthest along in their customer journey and will be able to get the most out of this kind of offer.

Your flagship offer would be priced at anywhere from $50,000 up to $1 million or more.

For your dream customer, this price isn’t going to be an issue because they’ll easily be able to derive ten times the value from it than what they’re paying.

But in a lot of cases, this would be cost-prohibitive. The cost of the flight, the cost of your room, and food, not to mention the cost you providing such a high-touch, personalized, high-level of service for them.

Then, next up would be something more accessible to more customers.

Flagship Offer Options

Instead of flying out to their location, instead you deliver some one on one coaching & consulting as part of a high-level mastermind group.

This is still pretty high-level and very exclusive with carefully selected members of the mastermind, but it’s not the same level as flying yourself and your team out to the client’s location, so this has a lower price point.

This is for your customers who aren’t as far along in their customer journey and are trying to reach that next level.

A good example of this would be the have a mastermind group that covers the same kinds of topics & material, but in a larger one-to-many setting.

This mastermind group would be something you could price at $10,000 to $50,000 per year.

Your Core Component Offers

From there, the next level would be a one-to-many course. It’s still done with you, but this is going to require less of your personal time, and it’s covering some very specific topics – core result area topics – and it’s delivered online.

This one is still less expensive than the flagship offer and it’s not as exclusive as the mastermind, but it covers a lot of material and provides a lot of resources and tools for your dream customer to be able to achieve the result they’re striving to achieve.

This is for your dream customers who still have more work to do to get to the next level in your business.

This is where you’d create a course around a specific core result they need to achieve, would consist of several different modules and online training videos, a community & accountability group.

The price tag on this should be from $2,000 up to $5,000 and would deliver tons of value for your dream customers who are this stage of their journey.

Your Splinter Offers

As we move down the value ladder, this next step would be one of the splinter result area topics that will help your dream customer achieve something very specific,

These people are not as far along on their journey so they’re not quite yet ready for the core topic. They need to achieve something specific, and at this level, you’re going to provide something that’s going to get them a win, and do it quickly.

The price tag on this would be anywhere from $100 up to $500. This course is an abbreviated version of the larger course from the level above, targeted to achieve one specific outcome.

Finding buyer with tripwire offers

To find the buyers who are in your target audience, we’re going to present them with a tripwire offer.

This is a resource that is specifically designed to get your dream customers a quick win with a sexy topic.

This is something that’s anywhere from $7 to 27 – virtually no risk for the customer, and full of upside and potential that will help them get a quick and fast win that will leave them wanting more.

Lead magnet opt-in offers

Then finally we’re at the on-ramp to the value ladder – the lead capture to begin with.

This step is the step where, after having done your homework to figure out exactly who your dream customer is, you’ve figured out what pain they’re having and what problems it’s causing in their life.

At this point we’re going to take one of the most tantalizing and exciting parts of your subset topics and create a lead magnet that will deliver enough value to establish yourself as the authority on the subject, and attract your dream customers like bees to honey.

Value ladder sales funnel

So how would all this look in a sales funnel?

(btw – if you’re looking for tool that makes all the funnel building steps easy, check out ClickFunnels, you can thank me later.)

Funnel page #1 – lead magnet opt-in page

This is where you attract your dream customers either with organic traffic or paid traffic, and introduce them to your world with that sexy lead magnet you created.

Funnel page #2 – tripwire sales page

This page is a combination of a “thank you” page for customers who just opted in to your lead magnet and present them with a tripwire offer in the range of $7 to $27. This page also includes an order-bump where they can check a box and add an additional, special highly valuable but small product to their cart ranging anywhere from $27 to $47.

Funnel page #3 – One time offer page

This is a page where you present an “OTO” or one-time offer. This is where you offer those who’ve purchased the tripwire product an exclusive, irresistible value-laden deal on a product from your splinter-tier products anywhere from $97 to $497.

Funnel page #4 – upsell page

This depends on what action they took on the OTO page, and you can either offer an upsell page, which would be something where your dream customer can add something else, like a set of swipe files, templates, workbooks, or other enhancements to the products they’ve already purchased.

Funnel page #5 – downsell page

this would be the opposite of whatever happened on funnel page #3, and could be a downsell page. This is a page where you could present your dream customers with a payment plan to break up the payments on the program.

Value ladder marketing

Hopefully this is all making sense.

If it doesn’t make sure you join my free Facebook group, Digital Marketing Mastery, where we’re talking about this kind of stuff all the time.

You may have noticed that I didn’t include all the levels of the value ladder in the sales funnel example.

That’s for good reason, and that’s this:

Your whole business doesn’t run through just ONE single funnel.

You’re going to have different sales funnels for each different tier of your value ladder.

There are numerous different sales funnels that you can use to increase your sales for your business, and most successful businesses use a wide variety of funnels, because each funnel will address the audience and needs they have at each different step of the value ladder.

So while there are numerous different kinds of funnels you can use, there are four core funnels:

  • Lead magnet funnel – this is a funnel where you bring people into your world with low ticket items
  • Unboxing funnel – this is where you’re unpacking a sequence of products one-by-one with the most valuable stuff you can deliver as if you’re “unboxing” a bunch of related products in someone’s shopping cart one at a time. The items in this funnel would consist of products in the “core” range of $100 to $500 packages.
  • Presentation funnel – this is a webinar funnel where you’re presenting higher-ticket items – $2,000 to $5,000.
  • Phone funnel – This is also called an application funnel and would be the funnel you would use for your high-ticket flagship packages.

Then you top it all off by stacking all of these funnels and using follow up email sequences to help ascend your customers from one level to the next in your value ladder.

It really depends on what your specific value ladder looks like, but these are common funnels that you would use at each of those tiers.

Two sides of the value ladder

So if you’ve been paying attention up until this point you’ve noticed that there is only one side of the value ladder that we’ve talked about so far.

But there can be two sides to your sales funnel!

How cool is that?

The simplest way to break down a two-sided sales funnel is like this:

On the left side you have the “supply” side of things. These are the things that you’re teaching and training your clients about. These are the tactics and strategies that help them get to the next level.

On the right side you have the “demand” side. These are the steps of the value ladder where you can provide done-for-you services at each level!

Two-sided value ladder

I first learned this concept from Dana Derricks’ book, “The Truth About Business: Exposing the truth that the top 1% doesn’t want you to know!”

It was mind-blowing – especially for me who comes to the funnel world from the service and done-for-you side of things.

According to Dana, when you build out the front side of your value ladder the right way, something very cool happens:

You’re actually creating demand for expert fulfillment on the back end, from the things you’re teaching on the front end!

This could be a certification course, or done-for-you services, like funnel design & building, or having a team of expert copywriters write copy for you – anything.

This fulfillment side is only limited by your creativity – there’s no shortage of things that can be done on the demand-fulfillment side.

Struggling to complete your value ladder? Try this

One more thing that I learned from Dana is how to finish out a value ladder, and this might be one of the most big-time ways to level things up for your business and it’s simply this:

Use other people’s offers (OPO), products & services to fill the gaps in your own value ladder.

Mind blowing, right?

Don’t have a high-ticket offer? No problem, find someone who’s got a high-ticket offer and build it into your value ladder.

Don’t have the expertise or the right product to answer one of your dream customers’ needs? No problem – find someone else who can do it for you.

This has to be one of the most innovative ways to complete your value ladder I’ve seen and it makes everything you’re trying to do go faster, because you can still earn money but let someone else do all the product creation for you!

Value ladder worksheet

We’ve covered a lot here, and by now, you’re anxious to get started.

So to help you out with that I’ve created a value ladder worksheet to help you start to figure out how you’re going to put your value ladder together.

Also – don’t forget – you can join my free Facebook group here to connect with other aspiring digital marketers and online business owners of all types to get help and be part of a community where we’re helping each other along the journey to online business success!

As part of the worksheet that I send you I’ll also send you a value ladder template that you can print off to start working on your own value ladder.

Next steps

Download the resources I created for you – the value ladder worksheet & value ladder template.

Have questions or thoughts? You can leave them in a comment below, or…

…you can join me over in my private Facebook group, Digital Marketing Mastery.

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