One of the main reasons that I failed at generating enough sales consistently in my last business was that I was selling high end products at a couple thousands straight of the gate and was only selling one product, an app or a website. There were a couple problems with this including: not extracting more value out of current customers, not retaining clients for monthly revenue, and not using lower priced products to get clients to make an initial purchase. The value ladder which is taught by Russell Brunson is the answer to these problems. A value ladder is a sales concept that has been around for a long time, but has become much more important with the prevalence of online marketing. It is the process of taking a client from a free offering into an initial offer and continually providing value as long as they are interested. It’s not a difficult concept; however, it is not implemented in most small businesses I’ve encountered which often have one product only.
By offering a free product that provides value to your perfect customer, you will attract and provide them immediately value. This is used to get a client’s email and preframe them to make a purchase. If a client is unwilling to give you their email, they will not make a purchase from you. This is why the first page on a website from an ad will ask for an email. People are defensive with their email due to the amount of spam out there. Therefore, you need to give them something of equal value that they want. After they have opted in, the free material can be used to interest a potential client in an initial concept. This free material is often used as a preframe which puts the client in the position to be persuaded in advance to an offer. From there, an initial offer is used to identify who is a buyer and who is not. Even if it is a small $7 purchase, this identifies them and differentiates from the people who do not take action. You can continue to make offers to identify hyper active buyers.
Brick and Mortar Example
This is all very interesting for an online business, but how does it help an established online business? Take a chiropractor for example. Many chiropractors provide only adjustments for $50 to $100 each session. If you think about all the experience a chiropractor has, you will begin to realize they can provide so much more value, but don’t because the one service is the norm. If a chiropractor begins to provide a free massage to get clients in the door, he will get more potential clients coming in. From there, he will be able to identify people with the need of an adjustment and notify them. They can then come in for three to four adjustments. Now that they are loyal customer, many chiropractors will just keep having them come in for the one service, but this is a client that has a relationship with the practice and trusts them. They have already been qualified as a buyer, so why do these businesses just stop right there. Instead, they should develop higher end services that build on top of what that client needs.
Professional Marketer Example
Next, let’s analyze how professional marketers execute the value ladder. Most of the successful influencers in the marketing or coaching space give away a ton of information for free or products at crazy discounts. This is so that they can attract clients and get them into their funnel. From there, they have small items that are no brainer deals. This identifies who is interested in actually making a purchase and who is not. From there, they have their main product which is a course or a product that is in the hundreds. Their backend has an inner circle which allows their followers to get one on one work for upwards of $5,000. They continue to provide value and increasing rates which ascend their clients from just attracting them, qualifying them as a buyer, and continuing to extract value. Russell Brunson even has a million dollar program where he charges 500 thousand up front and 10% commission up to a million dollars. Though that sounds crazy, it is just the product of continuing to ascend clients up the value ladder.
Why A Value Ladder is Important
One product is not a business. A business needs the sales infrastructure to attract customers and provide as much value as possible to each client. One product restricts a business from actually creating this infrastructure. Even if one product is central to the business, there have been value ladders built around almost every product and it is no different for a startup looking to generate more sales.