Are you looking to build a sales conversion funnel? Or are you trying to write down what value you provide your customers with every product or service purchase they make?
THE LADDER OF VALUE
The Value Ladder is where you should start. As simple as it sounds, I recommend that you take out a piece of paper and draw a very simple diagram with only two variables as shown below:
- VALUE on the vertical axis
- PRICE on the horizontal axis (or vice versa if you prefer)
The value ladder shows exactly how the products or services you offer, and the price associated with their purchase, increase as you provide more value to your customers. One step at a time.
Before implementing any conversion sales funnel, it’s essential to draw out your company’s value ladder, as it ties closely to your sales funnel.
Insert VALUE on the vertical axis and PRICE on the horizontal axis. The dollar sign “$” in the upper right hand corner is exactly where you want to ultimately take your customer. This is where you provide them with the highest possible value but at the same time charge them a premium for the product or service.
When it comes to gyms, for example, the highest value product might be personal training services (along with diet planning and annual membership). In my specific case, for example, it is consulting and building conversion sales funnels for companies where I can provide them with the greatest possible value. Because of that, I can also charge them the most amount of money. They get the most value, I get the highest compensation. Win win.
In an ideal world, what we’d all like to do is drive every customer to the dollar sign “$” right away, but the truth is, most of your customers won’t go there, at least not at first. Why is that?
It’s simply because they don’t know you and you haven’t provided them with any value or much value yet. Until now, you provided them with a free ebook or showed them a free educational video and that’s how you got their email address and got them on your website. This is a great start, but it’s certainly not the time to take them directly to the dollar sign “$” at the top right. It will not work. This should be a gradual process that can take time depending on your business, strategy, and the actual value your customers gain as they move up your value ladder.
THE EXAMPLE OF THE LADDER OF VALUE: GYM
So let’s go back to the gym example and suppose you own a gym. Let’s say your main magnet was a free “10 Most Powerful Workout Routines” eBook. This ebook qualified your leads as clearly someone who downloaded this ebook and gave you their email address in return is interested in working out and could be your potential gym member. The key here is to make sure that this ebook is well written and provides a lot of great information. You gave it away absolutely FREE and as long as your customers perceive this eBook as a great resource, they will be more willing to open their wallets and pay for other services you provide.
As a gym owner, with the free eBook you can include 1 free workout session and the next step up the value ladder would be a 1 month membership. To encourage them, you can also have a free consultation with a personal trainer to discuss your goals. There is no upselling here.
If they are happy with their facility and the free consultation they received, if this provided them with enough value, they will continue to move up their value ladder until they reach annual membership; additional classes and diet planning and finally personal training where you are not only paid the annual membership fee but also paid for personal training services for which you can charge very high margins. This is exactly where you want each and every member of your gym to end up.
Sure, 70-80% of your clients may not be able to afford or interested in personal training services, but some definitely will. Not everyone will make it to the top, but many will, while others will move up 2-3 steps just because you gave them a FREE eBook!
The key to a successful value ladder that helps your customers climb one rung at a time is to make sure that each rung provides great value for them. This will automatically keep opening their wallets. Now incentivize your clients and ask them to bring their friends for a free workout and you’ll immediately get extra gym members without paying a dime to acquire them.
HOW CAN YOU APPLY IT IN YOUR OWN BUSINESS?
Now you are probably thinking about how the Ladder of Value applies to your business. If you’re selling any kind of service or product, there’s definitely a ladder of value out there, even if you can’t see it yet. If you sell only 1 product or provide 1 service, you need to think about how you can add more products or services to provide additional value and maximize revenue for each customer.
If someone is willing to pay you $100 for a consulting job, there is probably a service you can provide to get paid $1,000 or even $10,000. It all depends again on how much VALUE you can provide them.
Let’s say you’re in the internet marketing niche, you’re just starting out, and you have great SEO skills. You decided to help individuals and SMEs with their SEO at a low price of $37 for optimizing their website (single service).
If your business is new and you don’t have many contacts, it may be difficult for you to get new clients. You first need to provide them with great value. Write an eBook on “20 Best Performing SEO Strategies in WordPress” with a case study of your own work and offer it absolutely FREE in exchange for an email address.
You can then start building your relationship and presenting your next offer, optimizing your website for a one-time fee of $37. This doesn’t sound like much, but wait. If they are happy with your service and have noticed improvements in your website performance, you can start offering them ongoing SEO services at a monthly fee of $97 per month. It completely eliminates the headache for your client and is still a reasonable fee to charge. As your relationship with your client improves, you can start to educate them on the additional services you offer or they will most likely ask for additional help themselves.
For example, you can offer a complete website revamp and ongoing SEO, social media, and email marketing services at $997 per month (a fee that’s much lower than hiring a marketing manager) or $10,000 paid per month. advance annually. Many of these processes can be put on autopilot with very little time spent on your behalf. You can also hire freelancers who will take care of this for you so you can focus on expanding your customer base and growing your business.
There are many different approaches to designing ladders of value, and yours may be very different, depending on your niche and strategy. However, to build a sales conversion funnel, I recommend that you create your own value ladder, connect the dots, and watch your leads become your highest paying customers, just because you gave them something for FREE!
Health,
fart
