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What is a Value Ladder

rainmakershub August 4, 2022

I want to keep this as simple as possible so that we can quickly progress to the good stuff. So to describe what a value ladder is and how you construct them I want to share with you how I designed the Value ladder that we use for this business. We all know the importance of identifying your ideal client, the one that is going to gain the most value from what you do and as a consequence of that value will spend the most with you and buy into your ultimate product or service. That ultimate product or service also happens (by design) to be the ultimate aim of your ideal client, their aspirational goal at time of purchase. That was certainly the case for this business.

With a little thought you will soon realsise that while you are looking for this ideal client, the one thagt is going to buy your top of the range services or products, you will be talking to many peoplek who initially look as if they qualify but few will ultimately fit the bill. Its not that you’re doing anything wrong, its just the way business works in the freal world, not everyone will buy your ultimate offering!

When you think aboput it if the majority of people are not going to. buy your ultimate offering today, what then are tbey going to buy to at least get them on the right track to the aspirational goal? The answer is far eaiser than you may first appreciate. Perhaps the best way to describe the process is to illlustrate it in stages.

Let us start with the first step which is the identification of your ideal client and a true appreciation of what it is that they want and need from you.

This diagram illustrates this first phase, you have identifieed your target market and refined it as far as you can. For example you could say that my target market is start-up, micro and small businesses. While it is easy to see how this works it is in reality too wide and neds to be further refined. I say this because in truth not every start-up, micro and small business will gain vlaue from what I am offering and so there is little point in spednign time and money atracting those who will not gain benefit.

They will simply become disappointed and have the potential to damage your reputation. With your market refined, in my case to those start-up, micro and small businesses who are serious about building a business capable of working for them, rather then them working for the business the entire time, also those who want to produce exceptional and sustainable results, but who do not have limitless budgets to spend on their development.

So we now have our target market and we have a good understsnding of what there main objective is and it is your aim to provide them with or assist them to gain that objective, the ultimate aim. I have illustrated this phase in the diagram above. So our role is to make sure our service or product, the one we want ot selll to the market is capable of providing the market with their ultimate objective.

To do this we must design that solution. In most cases you’ve already done this but it may be worth a second look to make fine adjustments. Here’s the thing, having designed the product or service that allows the target market to acheive their ultimate objective, their vision for the future now you have to sell it to them, or perhaps create the right environment that motivates them to buy your solution. We need to recognise that the ultimate objective willcome at a cost and nt everyone will be able to accomodate that price initially. That measn in the traditional sense you hasve to get through many peopelk saying no before you find the one that says yes. But guess what it doesn’t have to be that way. The construction of a value ladder is the answer.

The process of designing the ultimate offering that achieves the markets objective will have created a sereis of by-products that you can use to create interest and revenue from those who would otherwise decline your ultimate offering, by taking them on a journey that gets them closer to the objective and at the same tine creates revenue for you and value for them.

When I designed the solution for my target market, the Accelerate Development Program the process produced a sereis of very saleable by-products that all have value ion their own right. For example buildoing the program required me to write a number of presentations, each presentation also needed  images, diagrams and video clips. The scripts and modules were also able to be batched together to produce e-books, physical books and workshops. Whiile togehter all of these components created the Accelerate Program individiually these items had a value and could be sold individially to those who were not yet ready fof the full monty but still wanted to progress up the laddr to ward the ultimate goal.

This makes perfect sense when you look at it from the prespective of sales. Take a look at this illustrative example: If you just focus on the ultimate offering you will need to present this to many people to find the one that is going to say yes. That might be say one in ten people identified as a legitimate prospect. That means to gain ten sales we will let ninety walk away! Imagine if you could speak to all one hundred and not only get the ten ultimate sales but also create additonal revenue and value from the majority of the ninety. That is what a Value Ladder can do for you.

You can see my point if you view this illustration where the only product avaialble is my ultimate outcome the one that my market aspires to acheive. If all I have toi offer them is this there is a gap in the offering and the first step in terms of cost is a big one, which is why so many will say no, the jump from nothing to full price is just too much at this stage for them to consider!

It may well be where the best revenue can be found but if you bridge the gap with your by-prodcuts you can start to earn revenue earleir and more frequently without compromising on the ultimate sales too. This is also a great mechanism for creating enduring relationahips, trust and confidence.

When starting out with Value Ladders I would avoid starting at one of the ends but instead start in the middle. There is a good reaosn for this, let me explain. If you stat at the top end you will have to wait for sales tom come in and many opportunities will be lost. So initially this end should not be where you start. The opposite is also true. If you start from the other end where the offering is a free trial or low cost, like my book offer you will gain much interst but little revneue. Therefore the best place to start the process of buidling your laddr is in the middle.

Step One

The first offering in my Value ladder, when I was first startign out with this business was the membership model that included workshops, networking, and business development resopurces in returrn for a small monthly subscription.

Step Two

There is no reason to delay, we are running a lean business and the sooner we can generate some revenue the bestter and so the next stage is to add to this step in the Value Ladder our first Funnel, this is the process for convering leads into sales. Don’t worry we will look at how to construct these a little later. For now I only need you to undestnad the basline construction model.

Step Three

Once the first offer and the funnel is established we can now start to look at the next level, which can be above or below the centre line to begin the process of actually establishing a fully functional value ladder and one by one build up the various sales funnels linking them togeter as illustrated below.

Once you have completed the next funnel you can link them together so that the buyer can eaisly continue through the value ladder if it is suitable for them to so. As you coninue through this process you will eventually end up with a fully functional value ladder that is equipped to deal with Cold, warm and Hot customers. More abou that later.