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What is a value ladder?
A value ladder is a marketing term to describe a relationship between a brand and a customer in which, as a brand adds more and more value to a customer, the customer is willing to spend more. In some cases, this may be a growing relationship of trust that leads to one final high-ticket sale. But in many cases, it’s a growing relationship where the customer spends a little more at each level.
For example, a coach might put out free videos on YouTube or social media. They may then have some of their followers join a community. Some of those community members might join a group coaching session, while a few of those may pay even more for individual coaching. The coach is offering value to people on every rung of the ladder, but as the value increases the cost increases. That’s a customer value ladder.
Remember the old adage, “People do business with those they know, like, and trust.” A value ladder is a way for a brand to build trust with potential customers rather than throwing a huge offer right away.
In online marketing, a value ladder often begins with an opt-in, followed by an email sequence that gives the reader useful information, followed by an offer for a low-priced product, and so on. The more customers trust you, often the more they are willing to spend.
What are the benefits of a value ladder?
- You can offer value to potential customers, showing them that you have the solution to their problems before ever asking them to buy.
- You can build a more diverse business model, monetizing everything from small initial products to high-ticket items. In effect, you can serve both those who are willing to spend a little AND those willing to spend a lot.
- You don’t have to cold call or try to make huge sales right away. You can take your time to nurture a client relationship first.
Now Read: How to Sell Digital Products