A value ladder is a framework for how you organically increase the perceived value of your product or service — without having to raise your prices. In this guide, we’ll show you how to create a value ladder so that you can increase your leads, sales, and average order value.
What is a Value Ladder?
A value ladder is a framework that allows you to increase the perceived value of your product or service — without having to raise your prices.
The idea is simple:
You start by giving away something of low value for free (or at a very low price).
This generates leads, builds trust, and establishes authority.
Once you have built up a relationship with someone, you then offer them something of slightly higher value at a slightly higher price.
As they keep moving up your value ladder, you keep offering them more and more valuable products and services — each step along the way increasing in price.
Done correctly, a value ladder allows you to organically increase the perceived value of what you’re offering — without ever having to actually raise your prices!
How to Create a Value Ladder
Now that we’ve answered the question, “what is a value ladder?” it’s time to show you how to create one.
The process is actually pretty simple:
- Decide what problem you’re solving
- Identify your target market
- Figure out what they need
- Offer something of low value for free or at a very low price
- Increase the perceived value while keeping the same general format
- Keep going until you hit your goal!
Value Ladders in Action
The best way to understand how all these work is to see them in action. Here are some examples of real-world companies using value ladders to close more sales and increase their revenue
- HubSpot offers free tools, ebooks, and templates
- WordStream offers a free keyword research tool
- LeadPages offers a free landing page builder
- AppSumo offers heavily-discounted deals on popular software tools
As you can see from these examples, almost every company uses some form of a value ladder — even if they don’t realize it!
Value Ladders vs. Funnels
One final thing we want to clear up before we wrap things up is the difference between value ladders and marketing funnels. Even though they are similar, they are NOT the same thing! A marketing funnel refers to the process that someone goes through when they become aware of your product or service, consider whether or not they need it, decide whether or not to buy it, and then actually make a purchase.
A value ladder refers specifically to the products or services that you offer at each stage of the marketing funnel — with each successive “rung” being of higher perceived value (and higher price). So while all successful businesses need both a marketing funnel AND a value ladder, they are two distinct concepts. We hope this article helped clear things up for you!
If you’re an entrepreneur or marketer, then understanding what the value ladder is and how to create one is critical for your success. We hope this guide has been helpful for you today.