Most businesses have more than one product, service, or level (plan) of service they offer… but, many of those same businesses do not have a clear path of those products mapped out.
The result is often a lack of team clarity, not knowing when or how to offer one product over another, not being able to guide the customer through that journey, and ultimately, leaving lots of money on the table that could otherwise be yours.
Businesses that fail to plan are planning to fail and I want to help you with that.
In this article, I will outline exactly what a value ladder is and how to build one for your company with minimal effort.
Armed with this new knowledge, you’ll be able to craft a value ladder that is not only seamless to your customer, but that helps you increase your income and profits at every stage.
Let’s dig right in!
What is a Value Ladder?
A value ladder is a mapping of your products/services visually showing an ascension of both value and price.
Essentially, you take an X Y graph and illustrate steps in it. The Y-axis represents value white the X-axis represents the price. Here’s an example:
So, how does this work?
Let’s say your business right now has a product that sells for $197.
That’s great and anyone that has $197 and believes that your product offers $197 in value or more, may buy this product.
However, what about the person who has only $27? Or what about the person with $997?
You’re essentially ignoring all of the other price points out by only creating one product/service offering.
Creating a value ladder allows you to create a single customer journey, based on the value you offer to them, in multiple price points.
In this example, we’d have 3 products/services to offer value to the customers.
The keyword here being VALUE. Don’t focus on price first. Build based on value, then input prices that make sense after.
Don’t worry… I have examples coming below to break that down.
Price vs Value
A common misconception among some business owners is that value and price are somehow the same things, but they actually are quite different.
Price is easy. Price is a monetary amount that you charge someone for a product or service.
Value, however, is really all about the perception of the product’s worth… or “perceived value”.
We can’t get into this too much here, but this is a huge part of crafting your core offers, creating funnels, copywriting, and more.
Understanding and articulating the true value of your product/service is a core requirement to be successful in pretty much any business.
Value Ladder Vs. Web Funnel
Another common misconception is that value ladders and web funnels are the same thing. They most definitely are not… however, they are closely related.
Here’s an example of a funnel and a value ladder:
Web funnels (or marketing funnels) are essentially a step-by-step mapping of all of the digital elements used to help you go from a traffic source to a customer.
A website funnel WILL naturally include your value ladder stages, but it does so in a much more detailed method designed to map out everything that is happening in your funnel while the value ladder is only a mapping of your products and not the pages, emails, ads, etc.
Examples of Value Ladders in Multiple Niches
Okay, so before I tell you how to build your own, let’s share a couple of common examples in various niches. You can pull from these example value ladders when referencing your own.
Generic Value Ladder Template
- Free Content
- Lead Magnet
- Intro Product
- Core Product
- Premium Product
As a baseline, this is always what I start with as it works for most businesses. Now, you can freely add steps, drop steps, and skip steps, but do so at your own peril. These steps are proven to work and most high-level businesses do at least steps 3-5 if they are using paid traffic and add in steps 1-2 if organic traffic is your thing.
E-commerce Value Ladder Example
So, most e-commerce websites out there don’t have any concept of a value ladder, unfortunately.
Instead, they focus on adding tons of products to their stores at various prices.
The problem is, this doesn’t focus on adding value and doesn’t focus on the persona’s core problem. I’ve said this a million times, but you can’t sell anything without a problem.
No problem, no sale.
So, how do we craft a value ladder for e-commerce then? Well, here’s one simple way. For this example, let’s say you are currently selling a foot massager for $67.
- Product 1: Low Value/Price < $29 – This is a new product to help someone with the same core problem but at a lower value and price point. You can’t sell your foot massager for less, but you can offer something else here to help with foot pain. Maybe there’s a foot scrub or cream you can offer for $9-29? Maybe there’s a manual foot massager you can sell for $17?
- Product 2: Mid Value/Price = $67 – This is your original product, the electronic foot massager for $67.
- Product 3: High Value/Price > $197 – So, once again, how can you create more value around the same problem so you can charge more? A complete home spa package including the electronic foot massager, an assortment of foot scrubs, maybe even some closely related products like face masks, lotions, bath bombs, etc.
Medical Clinic Value Ladder Example
For this example, let’s use a dentist’s office. This one is super easy and you’ve probably done or at least seen this one.
- Product 1: Low Value/Price – $97 New Patient Exam & Cleaning – This is a common way to get new clients in many service-based businesses, by offering some initial product that covers what most need.
- Product 2: Mid Value/Price – $200-5,000 a la carte Dental Services – The next step up the value ladder here is a la carte services, typically offered if anything is found during the exam that may be needed. Filling a cavity, offering teeth whitening or braces, etc. are some examples here.
- Product 3: High Value/Price – $197/year Membership + 10% discount – Most dentist offices to the first 2, but completely miss out on the opportunity for this step 3. This is about creating customer loyalty through a membership. It’s far cheaper to keep a customer than to get a new one. So, offer them an annual membership that comes with yearly exams and cleanings, but also comes with a percentage discount off the extras they may need. Then, they get the annuals they need, you get predictable revenue, and they get a discount on things if they need more!
Note: you could easily modify this for any service-based business. My A/C contractor does the same… they offer an annual fee that includes checkups, plus a discount on coolant and parts, should I need them. I use it because I know I need my A/C maintained (I live in Florida… it’s always hot here) and I can get a discount at the same time!
Online Education/Course Value Ladder Example
If you have an online business that focuses on education, you can take the same approach to build a value ladder!
Let’s say you are a fitness coach for this example.
Product 1: Low Value/Price – $0 (free)
So, the great part about any value ladder that we didn’t touch on in the above examples… is you do not need to charge any money to get started. In fact, this blog you are reading now is part of our 1st value ladder step.
It’s a concept called “value ahead”, which means to offer free value ahead of any engagement when you might ask for money.
After all, if your fitness business is putting out free tips… imagine what the paid course would be right? That’s exactly what your visitors and followers will think.
Additionally, there’s no better what to add value while also driving up your traffic and building trust and authority than content.
Check out our Content Marketing Guide to help you start getting customers on near autopilot! (Link to full content guide)
Product 2: Mid Value/Price – $97 one-time
This could be any training, most commonly a course, and probably with some nutrition advice and a workout schedule.
In other niches, you can easily do a virtual live event, sell an app or cheat sheet, package up some SOPs, or anything of the like.
Basically, give them the tools they need to solve their problem with your guidance.
Product 3: High Value/Price – $97/mo
Next up is a coaching program, membership group, or some way that there is an added value of doing it with them.
By adding some interactive components, you are adding value.
Easy examples include private Facebook groups with unique content and peer to peer community, private live sessions like group coaching calls, or even 1-on-1 coaching calls
How to Build a Value Ladder
With all of that we just covered, let’s talk about the three steps to get your product ladder made.
Step 1 – Understand Your Customer
So, if you’ve been reading along, you should understand that the core element here is creating a map of products that all align to help solve your ideal customer’s pain point or problem.
You can’t do that if you do not understand your customer. Check out this article on how to build an ideal customer persona worksheet.
Once you have that, you should have absolute clarity on exactly what your ideal customer’s problem is… in their own words (not yours).
Step 2 – Create Your Core Solution
Now, armed with that info, you need to create your core solution. What is it that you solve… what big picture do you help your client/customers solve? How do you make their lives better?
Write that down!!!
Better yet, check out this resource on how to do that in more detail.
Step 3 – Break Your Solution & Create Value Ladder
Next, it’s time to map out your core solution into different segments or blocks of value and create your value ladder.
This is something we go over extensively in our SCG Method course, but the easy takeaway is this:
Use the generic outline I created above and fill in the blanks… feel free to drop steps as needed, especially on the high end. You can always go back and add higher steps later!
- Free Content – create great blogs, videos, social posts to help small micro issues around your persona’s core problem
- Lead Magnet – create a guide, workbook, app, schedule, email drip course, etc. to help them solve a slightly larger portion of their core problem.
- Intro Product – create your first paid product, physical or service but make it small enough to be affordable for your persona.
- Core Product – create a larger product that costs more (2-10x normally) that solves most of what they need.
- Premium Product – create a premium version of your product, subscription, big package, done for you, etc. that solved as much of the problem as you can… but be sure to charge top dollar for this step.
Pro Tip: You do NOT need all steps of a value ladder to start your business. In fact, I typically start most businesses I’ve done with only steps 1-3… later after I get enough action of step 3, I add step 4, and so on. There’s no point in having a premium product before you have intro-level clients.
Okay, so we covered a lot of information here about what a value is, went through a few examples of value ladders, and gave you some tips to start making your own.
If you haven’t yet, here are a few additional related resources in our blog (free value ladder step) to help you create an amazing digital marketing foundation for your business.
- How to Create a Web Funnel in 6 Easy Steps
- How to Write a Blog Post Fast In 4 Simple Steps (4 P’s Method)
- ROAS Calculation: The Ultimate Guide to ROI for Advertising
Lastly, if you want to take this up a notch, I invite you to check out our course, The SCG Method. In this course, we run you through all of our SOPs (standard operating procedures) as a digital marketing agency that’s helps businesses of all sizes and types grow online.