In the previous post we spoke about Alice and her unfortunate run in with a deal site.
Her business had one product to sell with a bunch of variations, but her back end was non- existent.
I can’t express strongly enough how important it is for business owners to have a robust back end to their business.
Larger businesses I consult with don’t usually encounter this problem as they tend to have large inventories and plenty of high priced items to leverage.
It cost me around £2,500 in seminar fees to get my head entirely around the concept of the value ladder, but since I’ve been selling it as a part of my own services I have made that money back many times over.
I’ve condensed it down to a few pages as it’s not really that complicated and should be easy for you to use.
Rather than explaining the concept first, I’m going to share how one of my Diamond members is taking advantage of this concept right now.
Sally sells canvas prints. Her inventory of images is second to none, but the market is saturated beyond belief.
Sally sells a small book for 99p on Amazon detailing how to choose the right coloured artwork for your home. She includes colour theory and explains why certain colours work well together, helping the interior designer in most of us to get just the right image to make our home more cosy.
In this book Sally also offers a discount to her online store which allows people with their newly found knowledge, to carefully select images based on colour.
Using particular tactics from our consulting calls, Sally found out that many of her competitors didn’t offer picture hooks or instructions on how to hang their art.
With every sale made, Sally now upsells people with a variety of different fixtures to attach their picture to their wall.
Not only that but every order comes with leaflets to hand out to friends and family for them to also get the book for free + shipping and discounts to her store.
If you’re a really busy person, Sally will come to your house, take measurements of the walls that you want furnished, sample colours that you have in each room, personally create a collection of suitable images which will perfectly complement your room, come back the next day and personally hang them for you using the most appropriate method for your wall.
Sally’s home visit service costs her about £20 extra in petrol per sale and two hours a week per customer, but nets her over £1,000 per sale.
She’s not trying to become the next billionaire in town by any stretch of the imagination but with a value ladder in place for those few customers who have the funds, along with the sales coming from the 99p book, Sally has added over £10,000 a month to her business.
Not bad for someone who has an average selling price of £25 per product.
Every man and his dog can buy a printer and start churning out canvas prints, but very few will go to the additional effort that Sally has. The value she provides outweighs the cost of the high priced service.
I used this example because Sally’s business is in one the most annoyingly difficult niches to break in to, but it can be done.
If we look at this value ladder in greater detail you’ll see how it can apply to almost any business and add much larger profits than Sally has.
Building The Value
I’m going to give this to you in a condensed format so that you can quickly turn the information around and start implementing it today. We’re going to use Sally as an example.
I need you to dream up the biggest, most valuable package you can offer to your ideal customer. All the bells and whistles, full price and with massive value. We’ll call this Package X.
What is the end result they achieve with Package X? Write that down.
Sally thought up the home visit for her business. The end results were that it saved people time by getting in an expert to choose art based on their current interior design.
Now break off a tiny piece of that final end result (Package X), something that could impact your ideal customer’s life today and offer that as a lead generation product.
Internet marketing master, Frank Kern, calls this approach Results In Advance.
You’re enabling the customer to get closer to their end result without necessarily involving you. However, when it comes to achieving that end result there is a very high chance that they’ll choose the person who has been most helpful on their journey.
Sally created a guide on choosing art for your home. This book was sold for 99p plus shipping. People don’t think too much about that kind of investment. Sally’s book is a break even lead generation product.
Her book appeals to, and is only really bought by her ideal customer, sending qualified leads to her site who are ready to choose art for their home.
So you now have this massive end result and a piece of that as a lead generating, lead qualifying product which will be sold at a breakeven price or better yet just free, right?
From here you can now fill in the blanks to lead your customer, step by step up your value ladder. If they don’t quite make it all the way to the end, it’s okay – you have a new customer who you can follow up forever until they do.
In my own business I only have four, sometimes five steps to the top of my value ladder. Yours can be as simple or intricate as you so choose, but I’ll explain why it works.
- Small Piece of “Package X” as lead in = £
- Irresistible Offer = ££
- Next Step 1 (product/service) = £££
- Next Step 2 (product/service) = £££
- Next Step etc = £££
- Massive “Package X” = £££££
Generally speaking, we always want immediate results and this is the job of your lead generation product
“Just do this one thing to see results which will move you closer to your end result.”
Once we have the info, we start looking for the next step to get closer to the end result. This is where I advise my clients to plug in their irresistible offer.
Sally’s ideal customer now knew which colours to choose. Her next step? She gave them a discount to her online store.
After a customer has consumed your lead generating product, simply place your irresistible offer right after it and bring them into your world.
You just keep giving your ideal customer “The Next Step,” each time leading them closer and closer to your ridiculously huge, value stuffed Package X (which is their ultimate end result).
There is also no reason why your business cannot have multiple value ladders all leading to different outcomes, but each ladder must start by answering that one question or solving that one problem which your ideal customer wants right now.
Even on the off chance that your lead generation product doesn’t convert them into an actual lead, just be happy that you’ve helped someone on their journey.