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What’s a value ladder? (And why you need one in online business)

It’s very important to have a value ladder in your online business to see actual success. But what’s a value ladder exactly? Read on to find out.

I won’t keep you in excitement for the whole article in case you are in a hurry. A value ladder is essentially a customer ascension model.

You see, customer generation is the most difficult part of running a successful business. You simply can’t run a business without buying customers, you need revenue.

How many customers you need depends on your overhead, the value of your products and how well you can convert those customers to buyers. To produce a profit, your profit has to exceed your overhead.

However, simply getting customers is not enough. To be truly successful you need to establish a trustful relationship with them.

So, when you do get a customer, it’s crucial to get them to make the initial purchase and stick with you after that.

This is because a customer that bought something from you once is much more likely to trust you and buy something from you again.

A value ladder is a concept that after the initial customer acquirement you can increase the value of the customer to your business by offering gradually higher value products.

As the customer ascends the value ladder, you generate a higher profit.

This concept applies to both offline and online business but in online business the opportunities for high-profit sales are much higher due to minimal overhead compared to brick and mortar businesses selling physical products.

This is why it’s very important in online business to do your best to build a trustworthy relationship with your customers, so they are more likely to move up the value ladder.

Confused yet? Let me explain how a value ladder works in online business through an example.

Step 1:  Customer acquisition

The first step of the value ladder is getting people to see your offer or offers. So basically acquiring customers for your online business.

It’s really not any different on a concept level than getting customers for a coffee shop for example. No one is going to buy your products if they don’t know they exist.

Of course, the actual acquisition happens differently in the online world. There are several ways to get people to see your offer. Both free and paid.

In the online world customers flow is called traffic. You can get traffic by paying for ads in services like Facebook and other social media, YouTube and Google.

Just remember that paying for ads will increase your overhead so you need to make more sales to make a profit.

That said, paid ads can be extremely effective as you can laser focus your audience these days so that only people who are already looking for your products and services will see them. Naturally, they are much more likely to buy than people not interested in your offers.

You can also get traffic freely by producing content on a blog or social media, that people can find through search engines and through your following.

Naturally, nothing is truly free, you need either time and talent or money to produce content people actually want to see.

If you, for example, run a website, you can create posts/articles that are search engine optimized for certain keywords. If you do things right, people will eventually find your content through Google without you actively doing anything.

This way in the online world it’s possible to create passive customer streams that are pre-selected to be more likely buyers. I’m sure you can see the potential in this compared to regular business.

Step 2: Initial sale

Once you have traffic for your site, video or other media,  you have two options. You can try to sell them something for a single commission through an affiliate link for example.

But if you want them to climb the value ladder, you need to get them hooked someway so you can offer them better offers. To achieve this, one of the greatest ways is to offer value by providing a free gift in exchange for an email address.

If you are unfamiliar with email marketing, it’s a very powerful way of directly communicating with your customers. By using an autoresponder you can automate your email marketing campaigns so that you don’t have to manually send emails to your customers.

To get your visitors to join your email list you will need some kind of incentive. This could be a valuable e-book, a course or some form of training. You can offer it for free or for a significant account.

I suggest giving free offers because this way visitors are much more likely to join your list. On the other hand, if you ask a small fee like $5, the people who do join your list will be much more likely to actually purchase something.

Both strategies offer benefits but in my opinion, you should do your best to convert as many visitors to subscribers as possible because it doesn’t really cost you extra and you can always clean your email list afterwards.

If you have a huge brand with people waiting in lines to buy your products it might be worth it to put a small premium but if you have a new online business just stick with the free gift.

After you get people on your list it’s all about creating trust. Remember you are dealing with real people here, not some automated bots from cyberspace.

You need to provide value to them so that when you eventually introduce a higher paying product, they will trust you enough to make the decision to buy that product as well.


Step 3: Upsell

Once you have them hooked by your initial offer, it’s time for an upsell. People who trust you enough to make a purchase are much more likely to make another purchase in the future.

They are also much more likely to make a purchase to a higher value product you offer later on. This is called upselling. You can offer an upsell at two points.

The first point is when they are making the original purchase. They are on the buying mindset and they have their credit card out. If you can provide additional value at this point, it’s much more likely they will buy the additional product or service at this point when compared to just trying to sell the additional product individually.

Another opportunity to upsell is when a customer has made a purchase and has tried the product for a while and finds it useful. If they bought the product because you recommended it, they will very likely trust you for future recommendations.

If you at this point recommend a more valuable product that is relevant to their problem, they are much more likely to buy it.

Step 4: Scaling the ladder

After you have built the initial trust and have buyers that actually trust you enough to take on your upsells, the sky’s the limit for scaling the value ladder.

The idea is to produce even higher ticket offers to these buyers. The higher you climb the ladder the less likely it becomes to make a sale.

Since in online business your overhead will be very small, it’s worth the effort to try and climb the ladder. The profit is worth it.

A typical example of a value ladder might look something like this:

  1. A customer visits your blog
  2. He/she makes takes up on your free offer of an ebook and joins your email list.
  3. In addition to the free gift, you should provide valuable tips for several days before selling anything.
  4. After a week or two, you recommend an affiliate product. At this point, you have created enough trust to make a sale.
  5. You continue providing valuable free tips for a while.
  6. You recommend another product, this time a much more valuable one. The customer will likely trust you enough at this point to also buy this one.
  7. You repeat the cycle. On each cycle it gets less likely to make a sale as you will recommend even pricier products. But the important part is that someone might always take you up on the offer.

Just remember this. It’s easier to make one sale of thousand dollars than a thousand sales of a single dollar. 


That’s it for today! I hope you found this article useful and will see the value of using a value ladder to improve your profits in your online business.

If you are interested in getting out of the rat race, creating an online income and learning about business opportunities please subscribe to my newsletter and bookmark my site. If you found this useful, social shares are also very welcome!

See you next time!

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