Value Ladder

Intro

Before we start with the topic of what is value ladder, I would like you guys to ask yourself this question: “Why am I doing business?”

The real answer, I believe would be, because you want to get money.

So for the business to work, you have to sell something of value and by the value I mean, something that provides either

1. A solution to your targeted market’s problem or
2. Something that gives satisfaction to the needs of your target audience.

So, in short, as long as you are able to provide value to your target market, or should I say, sell products of value, you will be able to make more money.

However, for the sales to be done the required audience is needed and they come from:

• Facebook pages
• Facebook groups
• Youtube videos
• Blogging
• Forums
• Facebook or other social media ads

In order to get quality traffic for your products to be sold, a certain amount of money is invested in paid traffic (ads). And to be able to breakeven (cover that investment), products of higher values need to be sold.

Therefore the aim and reason to do business now are not just to make money, but to make a profit. No matter how much value your products hold, you can’t sell a product valued at $100,000 (Most expensive) directly to a new buyer. They will definitely say “NO THANKS” as that person doesn’t even know what value that product holds.

So, that’s where the concept of Value Ladder comes in.

What is the Value Ladder?

The value ladder is best described in a graph of Value v/s Price where an ascending stair-like shape is placed between two axes. The vertical axis represents the Value while the horizontal axis represents the Price. As the value of a particular product increases, its price also increases.

Example of Value Ladder

Let’s say that there was an ad about “free basic gym membership for 3 months for the first 20 people” in your local newspaper. You went to check it out and you were among the first 20. This gym already got 20 members joining in by spending a particular amount of money through ads. After those 3 months, if you find value in the services being given to you, you would most likely become a normal member or even a VIP member.

You might also pay them for their services of diet plan and coaching. This is a win-win situation for both parties as you are satisfied with the services being given to you and you do not mind paying for it. If the gym owner gets more than 50 people who would buy his high-value service, the profit being generated will eventually break even (cover the cost of the ads) as well as his investment for in the gym itself.

The sales between the first two steps in a Value Ladder are done only to cover up the money spent into bringing traffic to buy your product or services. Since the aim is to make sure high-value products or services are sold, selling them right from the start is practically impossible and by doing so you might lose potential buyers. However, selling those high-value products is possible with your potential buyers who already bought your products and services before and found value through them.

Steps in the Value Ladder

Bait

The first part of the Value Ladder is to attract traffic to check out your first product also known as “bait” or a “Lead Magnet”, in order to build value. This lead magnet can be in the form of a free service, free ebook or something that costs for a very small price. You then collect information such as “First Name”, “Email Address”, or “Phone Number”, etc… of your target market (traffic) so that you can send them that first offer.

Front End

In this step, the original product or service that was intended to be sold initially can now be introduced. Since the buyer is getting more value he ascends the ladder and buys it.

To maintain the business going and ongoing cash flow, most of the entrepreneurs offer a monthly, 6months or yearly subscription offer and this can be called a continuity programme.

Middle and Back End

Now, if you are able to provide more value to your customers, your customers would eventually want to ascend the ladder as many times as you are offering products of great value that are benefiting them until you are able to sell your final product or service (Highest priced product of this particular ladder).

How to maximise profit?

The purpose of this ladder is simple. This helps an entrepreneur understand that not all of your customer would not want to buy your high priced products. they can be situated in the different steps of the ladder and this valuable information helps the entrepreneur to retarget those particular with other tempting offer having similar or greater value.

The personal information that was collected in the initial stage of the value ladder, are saved in a digital database also known as email database. This information is used to either sell the middle and/or the back end products to those potential customers who needed to be convinced or to sell products or services from other value ladders that have similar solutions to their needs via a strategy called email marketing.

Conclusion

To conclude, any type of business, whether it’s small or big, all of them require their own planned value ladder. Through that, they can always scale their products and keep providing value where it’s necessary in order to maximise their profit.

If you want deeper knowledge about Value Ladder  and its various examples, get your 14 days free funnel trials here and download your free ebook

In order to have a deeper knowledge about how to leverage high ticket products and set your own business, I would highly recommend you to watch this short video of Dave.

You can always comment on your views and if this brought you value, feel free to share it with your friends and partners. Stay blessed.