Why You Need A Product Ladder
Attracting leads and increasing sales are age-old dilemmas facing all business owners. Whether you’re selling products or offering services, your business relies on finding customers and getting them to buy, so you can increase your all-important bottom line.
While worrying about sales and profit is something that occupies your mind at the best of times, the current state of economic and community uncertainty has most likely pushed these concerns to the forefront. How can you attract leads and increase sales, even in times of crisis?
It can be a challenge, but it’s not impossible, especially if you’re clear on your brand, understand your product and service offerings and know the value you deliver to your target market. If you’re clear on these points, you can create a range of offerings that will guide your clients or customers along a path that will provide them with more value and deliver you increased sales.
This approach encourages incremental sales as your customers get to know you, come to like you and build their trust in you, eventually leading to your high value offer. Taking the time to establish the foundations for long term relationships with your customers will build trust and reward you with increased sales, repeat customers and loyal clients.
Sound good? This approach is known as a product or value ladder and it has the potential to transform your business, whether you provide services or sell products.
DRIVE REAL RESULTS FOR YOUR BUSINESS
The product ladder explained
A product ladder (also known as a value ladder) is a way to introduce your business to new customers and build trust by guiding prospects through a series of offers. The idea is simple.
Create a pathway for customers to follow as they move through your sales funnel, offering them products of increasing value at an increasing price.
As clients move down the sales funnel (from awareness through to interest through to decision and finally action), they are simultaneously moving up the product ladder (from free to low to mid to higher cost products or services). Matching your products and services to their position in the sales funnel is an effective way to capture their interest and earn their trust.
- Clients at the top of the funnel, as they are just getting to know you, will be offered free and low-cost options. These are low risk for your customers and go a long way to building trust and confidence.
- After customers have seen the value you offer, they move into interest and decision mode as they consider buying from you. This is where you can use mid-range offerings to deliver better solutions to their problems.
- Finally, your clients or customers will reach the bottom of the funnel and the top of your ladder. This is where they know, like and trust you and are primed to take action and make a significant purchase.
Benefits of a product ladder
A powerful marketing tool, putting time into developing an effective product ladder is a great investment, whatever your business. With a product ladder in place, you can build trust over time, increase conversions and, ultimately, get the greatest value from your customers.
Product ladders increase the lifetime value of every customer beyond the price of your premium offering. By encouraging sales at every price point, a good product ladder boosts your sales and profit in the short and long term, laying the groundwork for repeat sales and ongoing customer loyalty.
Even more importantly, having a product ladder in place increases your chances of building long term relationships. Giving your customers the potential to make a low risk purchase in the beginning of the buyer journey encourages increased take up of your offer. This allows trust to be developed more quickly through the provision of low price/low risk options.
If you don’t already have a product ladder, it’s time to start putting one together!
Creating a product ladder
Every product ladder will look different and there is no set number of steps to follow. We’ve given a guide below using 5 steps, but small product ladders might only feature 3 (low, medium and high). More complex ladders might have 10 ten steps, leading incrementally to an ultra-premium product or service. The number of steps will differ from business to business.
We’ve included examples of offers that could be used by product and service-based businesses on each rung of the ladder. While the detail of each step of the ladder will be different, the main idea is always the same. Start with a free offer and deliver exceptional value along the way so your customers learn to trust you and will be more willing to buy from you.
Your guide to building a product ladder
Step 1: Offer something at no cost to your customer in exchange for their email address. While this is free to your customer, it needs to deliver real value so they see that you can deliver the goods and build trust. As this is the first rung on your ladder, it’s important that your free offer goes some way to solving your customer’s problem, encouraging them to move up the ladder.
Service-based: offer a free ebook, webinar, how-to video series or a checklist.
Product-based: offer a low-cost item for free or a complimentary store voucher.
What could you provide for free that adds real value to your customers or clients?
Step 2: Follow up with an introductory offer at a low price point, typically under $50, which should be enough to cover your costs for subsidising the first two rungs of your product ladder. Offering more to your clients at a low price point means this is still a low risk for your customers, especially if they appreciate the value you’ve already provided with your free offer.
Service-based: sell an ebook, mini-course or paid webinar.
Products-based: sell lower-level items, adding in free delivery or a 2 for 1 offer to increase value.
List ideas for a low-cost introductory offer that builds on the value of your free offering
Step 3: This when you start offering your mid-range products or services. It requires a bigger financial commitment from the customer, but they’ve already been impressed by your two previous offers so they know and like you and are well on their way to trusting you. This means they are more likely to take this next step to benefit from a better solution to their problem.
Service-based: promote courses, workshops and group coaching.
Product-based: promote mid-priced items, extra value bundles, higher value solutions.
Think about mid-range products or services that could be the next step for your ladder
Step 4: For most business owners, this is the ultimate step, where customers purchase your premium product. Not every customer will reach this step, however, the ones that do will already know what you can offer and love what you do so they will be primed to make a larger investment. This is where flagship service offerings and premium products are positioned best.
Service-based: 1 on 1 coaching, mastermind groups, personalised consulting or live events.
Product-based: high-end goods, premium products, complete end-to-end bundled products.
What’s the end game for your customers or clients? What’s your premium offering?
Step 5: So, what do you do with your best customers when they reach the end of your ladder? You create a new rung, focusing on recurring income by offering exclusive benefits to your most loyal and committed customers. This provides predictable income while rewarding your clients with more access to you and your offerings, keeping them primed for your next big offer.
Service-based: paid memberships, exclusive groups, subscription content.
Product-based: subscription services, paid memberships, exclusive groups,
What could recurring income look like in your business model?
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Let’s Look At A Real-Life Example
If you’re struggling to see how this could work for your business, I’ll be the guinea pig and give you a glimpse into how I use a product ladder in my own marketing business!
Step 1: Free brand statement worksheet
I currently offer a free brand statement download as an optin to entice business owners to join my email list (I have also offered a free 7-day email marketing challenge in the past). These free offers instantly provide a solution to a problem, helping business owners understand their ‘why’ and recognise the value in taking the time to strategically work on their marketing investment.
Step 2: Free 15-minute discovery call
I follow up my free offer with a complimentary 15-minute discovery session which serves two purposes. It gives businesses direct access to me for free, so they can get real value straight away, with no risk. It also allows me to vet potential clients so I can see whether we would be a good fit moving forward and helps me understand how I can best deliver value to them.
Step 3: 1-hour marketing coaching
The next stage in my product ladder is a 1-hour coaching call. If a business owner finds value in the free brand statement worksheet and initial discovery call, my $149 coaching call is an affordable next step, giving them oodles of value for their money. I cover a lot in an hour to ensure every client comes away with more clarity and confidence.
After getting results from a 1-hour session, many business owners want more. That’s why I then offer 6-hour coaching packages, working with business owners to develop a marketing process over 6 regular sessions. Clients can also select my 4-week mini marketing plan, which reviews their current situation and helps them develop a clear and practical strategy for future growth.
Step 5: Strategic marketing plan
My premium offering is a complete strategic marketing plan, where I work with clients to build an effective marketing strategy to meet current and future needs. This includes a full analysis of the business, including all products or services; evaluation of competitors; and review of previous marketing activities to develop a customised marketing strategy for success.
As you can see, my product ladder includes a range of services designed to move clients through the process from awareness to research to consideration to decision. Creating a product ladder not only helps more clients know, like and trust you, it also increases sales along the way and demonstrates the value that you provide, every step of the way.
That’s why every business needs a product ladder – now more than ever!
Marketing Sense is here to guide you toward marketing success. Give us a call to discuss your needs and make sure you download your FREE copy of our Brand Statement Worksheet to get crystal clear on your business, your offering, your audience and your competition.
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