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What is a Value Ladder? (& How To Create Your Own!)
A value ladder took my revenue from $3-4 million to $30-40 million literally overnight.
And for one reason: nobody else was doing it!
Around 10 years ago a bunch of top marketers in America were selling offers like courses, training and resources.
But I was the only one actually calling my buyers to later pitch them a $5,000+ coaching service.
When I asked some friends of mine, “Why aren’t you doing this?”
The response was, “I’d love to but I have no time.”
So I built a call center and sold expensive products for A-star marketers like Frank Kern to their own buyers lists – and created a 7-figure business for myself in the process!
I’ve been crazy about value ladders ever since and all those top marketers have realized the money they can make by building one themselves.
But I wanna tell you a secret.
A lot of your competition still has no idea what a value ladder is… and how it can 10x or 100x your revenue without winning any new customers.
In this blogpost you’ll find out exactly how to make a value ladder.
Ready?
What is a value ladder?
The difference between a ‘micro’ and a ‘macro’ value ladder
5 examples of a micro value ladder
5 examples of a macro value ladder
PART 1 – UNDERSTANDING VALUE LADDERS
In this section, we’re going to talk about the basics of value ladders and what they are!
What is a Value Ladder?
I really want you to understand what a value ladder is as fast as possible.
So here’s a super simple example.
I started my first successful business 20 years ago selling DVDs that told people how to make their own potato gun.
But there was a problem.
In 2003, Google suddenly made an update and the cost of Google Adwords literally 10x’d overnight. It wasn’t profitable for me to buy Adwords and sell DVDs anymore!
So I got thinking… What would people who buy a DVD on potato guns want next?
Then I hit upon the answer: They want the equipment to build it too!
As soon as someone clicked to buy my DVD, I showed a one-time offer to buy all the equipment for an extra $250.
I made tens of thousands of dollars as a result and remained very profitable.
But here’s the important thing.
I bet you few people would buy if I sold a DIY kit to make a potato gun for $250 right off the bat.
This is because:
- They don’t know if the DIY kit works
- They don’t know how to put it together
- They don’t trust me
But by offering them a DVD and including clips on the sales page that showed me building and shooting the gun… I provided the value they needed to trust me and buy my DIY kit.
Make sense?
When you build a value ladder leading up to an expensive product… you make the sale so much easier and your business so much more profitable.
On the flip side.
If you already already have a list of buyers who love your products then you can almost instantly build new revenue streams by asking… What would these people want next?
I first wrote about the Value Ladder in my book DotCom Secrets.
It was the first book I wrote in my Secrets Trilogy series… and it’s one of the most powerful ideas that continues to drive success for hundreds of thousands of businesses the world over.
The Difference Between a ‘Micro’ & a ‘Macro’ Value Ladder
You need to understand there are two different kinds of value ladder.
- A micro value ladder
- A macro value ladder
A micro value ladder might be called a sales funnel.
In this kind of value ladder, you show your buyer the next step of the ladder right within the same transaction.
It takes seconds to bump someone up a micro value ladder.
A macro value ladder might be called a ‘customer journey’.
In this kind of value ladder, your buyer might not be ready to take the next step for months or even years.
Both types of ladder are hugely profitable depending on what you’re selling.
See some examples below.
5 Examples of a Micro Value Ladder
Here are some examples!
1. Marketing Book With Video Training Upsell
Here’s an example from one of my own products.
In case you haven’t read it yet, I offer my best-selling book called DotCom Secrets for free (plus shipping & handling).
I show potential a ton of value in a video I made on the sales page, and after you enter your shipping information to get the free book I offer two upsells:
- The audiobook
- An exclusive video training
This micro value ladder turns a free offer into a cart worth $153.95 within a couple seconds.
Here’s the landing page…
And here’s the checkout page with two order bumps…
2. Physical Products With Equipment & Warranty Upsells
Trey Lewellen is an Internet marketing legend.
He launched a funnel that made over $20 million in six weeks – a record that I haven’t seen broken yet.
It was a funnel selling flashlights.
There were a couple different variations but it was all based on a value ladder.
A customer clicked to buy a tactical flashlight for around $18… they were then offered rechargeable batteries… and then offered to buy a 1 year or 3 year warranty.
A super simple value ladder done to perfection.
3. Real Estate Investing Lead Magnet To Coaching Upsell
Joe McCall is one of just 900 people to make over $1 million with a single sales funnel inside ClickFunnels.
His website Real Estate Investing Mastery is an amazing example of a value ladder.
On his homepage there’s a lead magnet with a free download.
But after you get the free download, you’re taken to a new page that offers a free video training.
At the end of the free video training you’re offered to join a real estate coaching programme.
A simple value ladder that Joe has running on autopilot.
Here’s the homepage with a CTA (call-to-action) for a free report…
Here’s the landing page for the free report…
As soon as a user enters their email address, they're redirected to another page with a CTA for a free video training that has an offer at the end…
4. Organic Skincare Products That End With YOU Making Money
Jamie Cross was one of the first 2 Comma Club Award winners at ClickFunnels – we give this award to anyone who made over $1 million with a single sales funnel.
Jamie has gone on to give insane value to customers in her organic skincare business Herbal Alchemy.
Here’s how it works.
All her products show a discounted price called ‘Subscribe with Benefits’.
If you choose to subscribe you not only get a discounted product, but you get 20% off every order and you can set up recurring deliveries.
But there’s more.
If you spend over $149 you get a free gift with your Subscribe with Benefits order.
If you spend $229 you get even more free gifts.
And then…
If you refer a friend to the Subscribe with Benefits program you can earn $300 dollars in coupons!
And then…
You can even become a brand ambassador and start earning money by selling Herbal Alchemy products via your own social media profiles and pages.
This whole process can take place within one visit to the website.
Here’s an example of a product with a discount if you ‘Subscribe with Benefits’...
Here’s what the ‘Subscribe with Benefits’ option offers…
On the same page describing the ‘Subscribe with Benefits’ offer there is an option to actually join the business as an Ambassador and make a commission on products you sell…
5. Gym Trainings That Guarantee You More Money
Alex Hormozi is one of the most famous marketers today – he also got started with ClickFunnels and is a 2 Comma Club Award winner.
Here’s what his current value ladder looks like.
First of all you enter your contact details to get access to a free video training that promises to help you ‘fill your gym calendar in 90 days’.
After watching the video…
You can book a strategy call which promises to help you earn up to $150k from the knowledge you’ll get on the call.
And on the call you’re offered one of Gym Launch’s coaching programs.
The up-front program used to be $16,000 paid over 16 weeks…
But it came with a guarantee that you will pay for it by the money you’re making from the system.
See how Gym Launch promises way more value than they ask in return at every step?
A value ladder that seems like a steal – even when it charges you $16,000!
Here’s the homepage with a promise to get your gym more members…
After giving your email address you’re redirected to a free video training…
Then there’s another CTA offering you a ‘$150k guarantee’ to book a consultation call…
5 Examples of a Macro Value Ladder
Here are some examples of a value ladder that can take months or even years before a customer moves up the rungs!
1. From a Free Trial to a $1 Million Offer
The business I co-founded, ClickFunnels, is a great example of a macro value ladder.
For a time I was offering a $1 million service where the team at ClickFunnels built a sales funnel for you and got it up and running.
Now… imagine I pitched a $1 million without any value ladder beneath it?
Who in the world would trust me that it’s worth it?
No one, that’s who.
Instead we had built a robust value ladder that started with a free trial of ClickFunnels and the free books in my Secrets Trilogy.
From there we provided 30-day challenges, live events and different coaching programs.
We also built out the Two Comma Club Award to give our community a goal to aim for and we built out a coaching strategy to get them there.
I could only offer a $1 million service to people who had seen tons of value and knew we had helped hundreds of people make multiple millions of dollars from their sales funnels.
2. A SaaS Value Ladder Worth $1.73 Billion
HubSpot is one of the best-known SaaS unicorns and it generated $1.73 billion in revenue last year.
But did you know one of HubSpot’s primary acquisition strategies is through building value ladders?
The Hubspot blog generates millions of hits every month.
And in every blog Hubspot offers a free download – for example on their blog about the ‘customer journey’ they offer a Free Customer Journey Template.
After you enter your details you’re offered to try out Hubspot’s CRM software for free.
And then… if you enjoy the value from a free trial you become another paying customer.
Hubspot constantly over-delivers on its software solutions and a number of paying customers will upgrade to Professional CRM Suite priced around $20,000 a year and Enterprise CRM Suite priced around $60,000.
Here’s a free download that HubSpot offers each visitor to a blog on ‘Customer Journeys’…
After entering your email address and other details you’re taken to a page that offers a free trial to one of HubSpot’s marketing or CRM software offers…
HubSpot continues to give value in follow-up emails or onboarding during the free trial to bump a user up to one of its paid plans, for example HubSpot’s CRM Suite…
3. From a Loss-Leader to a $540 Million Exit
I love the story of how Diapers.com built a 9-figure business off the back of a loss-leader.
What’s a loss leader?
It’s a product you sell to your customer at a loss.
Most supermarkets actually make a loss on the diapers they sell… but they stock them because they get people in the door and those people usually buy a bunch of other items.
The co-founder of diapers.com (Marc Lore) saw there were hundreds of thousands of people Googling for ‘diapers’ and not a lot of websites actually selling them.
So he figured he’d make a profit by selling other baby items alongside the diapers.
It worked because diapers.com offered unbeatable value:
- Cheaper diapers than the supermarket
- Free shipping
- Overnight delivery
- Huge discounts on other baby products
Customers loved the value and kept on coming back for more and more diapers and products.
That’s how the business made $2.5 million in its first year, $11 million the next year and then $300 million before Amazon bought them out for $540 million in 2010.
The initial loss actually locked in customers who kept on coming back for more.
4. How Apple Makes $8,000+ From Each Customer
You’re probably thinking that value ladders only work in sales funnel-style selling.
But it works for huge tech companies like Apple too.
For example, Apple estimates that its iPhone customers spend $700-900 on a new device every two years.
Apple’s whole business model is built on offering so much value that customers never buy a smartphone from another tech company again.
Which means they make around $8,000 per iPhone customer over a 20-year period.
But how does Apple acquire a new iPhone customer?
For a long time the strategy involved selling a low-priced iPod for $199.
Then, they offered a subscription to iTunes… then they offered EarPod wireless ear-buds… then they offered an Apple Watch.
If somebody got hooked on Apple products they were much more likely to choose Apple when they want to buy a smartphone, an iPad, a laptop and a desktop computer.
5. Becoming the World’s Most Valuable Automotive Company in 20 Years
Elon Musk recognised the importance of giving tons of value before a customer felt ready to buy a Tesla.
This is why he installed coffee bars, Wifi access and open service bays at Tesla stores.
The idea was people could pop in just to hang out and watch what was going on – no pressure to buy.
Then, inside the store they could watch Tesla Stories featuring real owners’ experience of living with an electric car.
They could design their own roadster and share it on social media.
From there, they could sign up for a free test drive of a Tesla.
And then if they were really interested in buying an electric car Tesla offered a number of different cars at different price points to build increasing value and trust in the consumers.
Here’s a Tesla showroom in San Jose, California, with a TV showing Tesla Stories, a Design Studio and coffee bar.
PART 2 – 5 BENEFITS OF VALUE LADDERS
By now you should be ahead of your competition.
Why’s that?
Because the majority do not know what a value ladder is and they don’t know how it applies to companies either large or small!
Below, find 5 reasons to cement the benefits of a value ladder in your mind.
1. Improving Your AOV (Average Order Value)
If you’re thinking of implementing a ‘micro value ladder’ then the AOV is super important.
Like I said above, you can’t always sell your most expensive product off the bat.
You have to bring the customer in with a free or low-ticket product that offers huge value to them.
In my book DotCom secrets I talk about the ‘100 visitor test’.
Here’s the theory:
- If you’re selling a $197 product on your sales page the higher investment means probably only 1 in 100 people will buy – you make $197 profit
- If you offer a free CD on your sales page then the lower investment means that 8 in 100 enter their shipping details, and then if you show the same $197 product on an upsell page at least 25% of people will buy it – you make $394 profit
Offering value is so important to build up trust.
If you do it well, you will find that you increase your AOV even if you’re getting the same number of visits to your sales page.
I'll get to why this is so important in just a second.
2. Improving Your CLV (Customer Lifetime Value)
But first…
What if you don’t or can’t sell customers extra products and services during a single transaction?
Here’s where you need the ‘macro value ladder’.
It’s much easier to sell to someone who’s already bought from you once and had a great experience.
If you can then build out extra products and services then you can start figuring out how much you make per customer over a year or multiple years.
This is called the customer lifetime value or CLV.
Here’s why the AOV and CLV are so important for your success in business.
(Below find a graphic on CLV from CleverTap.)
3. Ramping up Your Advertising Budget
Dan Kennedy has been my greatest marketing mentor in business.
Here’s one of his quotes that’s had the most impact on me:
“He who can spend the most to acquire a customer, wins.”
What does that mean?
Think about it… giving tons of free value costs money.
So the business that can spend the most on their marketing and advertising should be able to provide the most value and win more customers.
But how do you ramp up your advertising budget while staying profitable?
By understanding your AOV and your CLV!
If you can bump up your AOV to $300.. You can spend up to $300 to acquire a single customer and at worst break even.
If you can bump up your CLV to $3,000… You can spend up to $3,000 to acquire a single customer and at worst break even.
Trust me, your competition is not thinking along these lines.
They want to get customers as cheap as possible and offer the least value.
But with a value ladder you can afford to give free trials, free trainings, free resources and still make more money in the long run.
4. Solving Your Customer’s Problems
I’ve said before that being successful in business is down to two things:
- Identifying a problem your customer is experiencing
- Solving that problem better than anyone else
But here’s the thing.
Imagine that ClickFunnels offered software subscriptions but we had zero marketing books, no live trainings, no events, no coaching programs and no awards.
You know what would happen?
A customer could buy up a subscription to solve their lack of a sales funnel…
Only to have an even bigger problem: they can’t get their sales funnel to convert!
If we didn’t offer them all the resources they needed to get their sales funnels to convert then that customer would either buy from our competition or exit the platform altogether.
See why a value ladder benefits both you and your customer?
If you can think ahead for your customer and create a value ladder that solves all the challenges that are coming their way, then you can retain those customers and build a hugely profitable business.
5. Selling to Different Segments of Your Markets
Let’s go back to the HubSpot example.
There’s a couple steps you have to take before you can get one of HubSpot’s free downloads – aka the first ‘rung’ of their value ladder.
I didn’t tell you about one of them.
But it’s this.
HubSpot asks you to tell them how many employees work at your business.
You can answer 1, or you can answer 6-10 or you can tell HubSpot you have 100s of employees.
Why do they ask this?
It’s because HubSpot has CRM software offerings for small businesses all the way up to huge businesses with thousands of employees.
Your answer at this step tells HubSpot what kind of free trial to offer you and provide the best value they can.
The answer also tells HubSpot what kind of content to send you if you opt-in to their marketing newsletters.
Makes sense right?
That’s why my 5th benefit of value ladders for you is the ability to personalize the messages you tell your new customers and the products that you offer them.
Don’t expect they will work it out for themselves!
PART 3 – CREATING YOUR VALUE LADDER
Below I want to walk you through 5 steps to take when building a value ladder.
You’re nearly there!
5 Steps to Build a Value Ladder for Your Business
Okay, by now you’ve seen how awesome a value ladder is.
Ready to build one for your business?
Check out these 5 steps to create a profitable value ladder for your business.
1. Know Your Target Market
Knowing your market is literally the be-all and end-all of your value ladder.
Why?
Because if you don’t know your target market you won’t know what kinds of content would be of huge value to them.
Remember…
Just because you’re offering something for free or for a small amount of money doesn’t mean people are going to want it.
So how do you figure out what your target market wants?
In my book Expert Secrets I talk about the 3 core markets or desires:
- Health
- Wealth
- Relationships
When people purchase a product or service they are always hoping to get a certain result in one of those three areas of their lives.
Customer avatars are a great way to figure out who your market is.
But if you want to offer value to this customer avatar you need to figure out what are they looking for.
Then offer them something of value that will get them closer to their desire.
2. Choose a Starting Place
There are three different paths you could take at this point:
- If you have no customers yet, you’ll need to focus on your free giveaway or low-ticket product
- If you already have customers for a giveaway or low-ticket product, you’ll need to start thinking about your next step
- If you already have a high-ticket product, you’ll need to start thinking about the first steps to get your customers ready to buy
Go back and look at the value ladder examples above for inspiration!
3. Outline Your Offers
Now it’s time to outline your value ladder.
I am obsessed with the idea of over-delivering.
Actually, I have this framework in my mind every time I outline my offers: I aim to charge 10% of the value my customer will get.
Building your value ladder will be so much easier when you think of your customer’s outcomes at each stage of the ladder… rather than thinking about how much you’d like to charge.
4. Start Promoting Your Offers
By now you should be ready to promote your new offers in your value ladder.
If you’re new to this way of thinking, then you should look a little deeper into what I call the ‘7 phases of a funnel’.
This kind of funnel is perfect for implementing a ‘micro value ladder’ – but you should still understand the psychology behind the 7 stages if you’re implementing a ‘macro value ladder’.
I go deep into this in my book DotCom Secrets.
Here’s a quick overview:
- Phase #1 Traffic Temperature – ‘Hot traffic’ means you can push your sales funnel out to an existing list of buyers. ‘Warm traffic’ means you can push your sales funnel out to potential customers already viewing your websites or social media pages. ‘Cold traffic’ means you’ll need to run paid advertising to get eyeballs on your sales funnel.
- Phase #2 Your Pre-Frame Bridge – This refers to the content a visitor has seen before they arrive on your landing page. This could be a blog post, a social media post, a referral link, an email, a paid ad, a YouTube video. The ‘hotter’ the traffic, the less you will need to give in your pre-frame bridge.
- Phase #3 Qualify Subscribers – This is an opt-in page where you ask people for contact information in exchange for a valuable piece of content or a low-ticket product. This is the first step in your value ladder.
- Phase #4 Qualify Buyers – This is the next page in your sales funnel, which is usually an upsell page offering a one-time offer that is the next step in your value ladder. If you don’t have an upsell page then this could be an email you send out to your list of subscribers.
- Phase #5 Identify Hyperactive Buyers – A % of people on your page will want much more than the first upsell you offer them. You can offer these people even more value to increase the AOV right off the bat.
- Phase #6 Age and Ascend the Relationship – By now the one-time transaction has been completed… but what if there’s still more you can give? To ascend your relationship you can offer your customers another chance to buy at a higher price, or join some kind of continuity program.
- Phase #7 Change the Selling Environment – With a strong value ladder you will reach a point where you can no longer sell directly online. It’s tough to get someone to buy a $15,000 product at the click of a button. So here you might want to add more value at a live event, during a phone call or in-person.
5. Scale Your Value Ladder
By now you should be seeing success from your value ladder, and you’re making sales.
You should have a clear idea of your AOV or your CLV.
This means you can start pumping money into advertising platforms to bring even more customers into your value ladder and move them further along the process.
Continue scaling for as long as your ad spend remains below the AOV or CLV!
BONUS: The ‘Linchpin’
The ‘linchpin’ is a concept I call the ‘Midas touch’ for your business.
It literally took ClickFunnels from zero to over $100 million in sales… and yet it’s so simple and so important to you if you’re building a business based on the value ladder.
Here’s a quote I love that explains the linchpin model:
If you don’t have continuity, you don’t have a business.
Look again at the first doodle I showed you about the value ladder:
See that ‘continuity program’ at the bottom?
I tell all my students to literally tattoo this concept on their arms because it’s the key to driving huge revenue with a value ladder.
The more you can build some kind of membership or recurring subscription into your value ladder… the quicker you will start hitting huge numbers with your business.
This was revolutionary when SalesForce first introduced monthly billing for its software products back in the early 2000s.
But the same ideas are still powering huge growth in a whole range of businesses.
Continuity is amazing because:
- It ramps up your customer lifetime value (CLV)
- It creates a recurring source of income for your business
- It creates a huge pool of customers who are hungry to buy more products
So that’s my bonus tip for you!
I’m super excited to see what amazing value ladders you come up with!
P.S. If you want a deep dive into the value ladder, I suggest you read my book DotCom Secrets now.
I’ve already bought a copy for you here.
Just tell me where to ship it!
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