How to Create Your Value Ladder - Guide Your Customers From First Purchase to Loyal Fan

Week 8 - Value Ladders: Haff Notes 52-Week Business in Plain English Challenge

Welcome to Week 8 of our 52-Week Business in Plain English Challenge! Last week, we focused on designing your ideal product or services lineup. Now, it's time to organize these offerings into a strategic pathway that guides your customers from their first interaction with your business to becoming loyal, long-term fans.

💡 Your value ladder is an incredibly important topic for small business - and it’s one that is hardly ever discussed. Let’s dive in.

---

What is a Value Ladder?

A value ladder is simply a structured way of organizing your products and services from lowest to highest price point, with each step up providing increasing value to your customer.

Think of it as creating a clear path for your customers to follow as they deepen their relationship with your business.

Why Your Small Business Needs a Value Ladder

Take a look at this jewelry business - what do you notice about their offerings:

1. New customers had no obvious "entry point" to try the products at a low price point. Both types of products are relatively the same price. Customers may be more open to buying stud earrings if they were a lower price.

2. The business is missing opportunities to increase profits with offerings that meet different needs for their customers and offer more variety in pricing which broadens the customer base for the business.

Another option for tiers in this jewelry business may be:

1. By reducing the price of the stud earrings, now the business has a clear tier one offering.

2. Most of their sales will most likely come from the $29 dangly earrings (price increased to account for the decrease in the price of the stud earrings).

3. By adding in the necklace and pendant - enthusiasts of the brand will have an option to treat themselves or add another piece to their collection.

How to Build Your Value Ladder

Your value ladder should have multiple tiers, each representing a product or service that offers progressively higher value at a higher price point. Here's how to structure it:

1. The Entry Point (Lowest Tier)

This is often low-cost or even free, designed to introduce customers to your business with minimal risk. It should deliver real value while leaving them wanting more.

2. The Core Offering (Middle Tier)

These are your primary products or services that solve your customers' main problems. They represent the heart of your business.

3. Premium Offerings (Highest Tier)

These deliver your highest value, often through personalization, done-for-you services, or exclusive experiences, and come with your highest price points (and profit).

Value Ladder Examples Across Different Businesses

Product-Based Business Example: Candle Company

Lowest Tier: Wax melts sampler pack ($12) - Let customers try multiple fragrances at a low price point

Medium Tier:

• 4oz travel candles ($18)

• 8oz signature candles ($27)

• Gift sets with candle, matches, and wick trimmer ($45)

Highest Tier:

• Custom fragrance development ($120)

• Subscription box with seasonal selections ($35/month)

• Corporate gifting program with custom branding ($500+)

Service-Based Business Example: Business Coach

Lowest Tier: Free newsletter with business tips or a low-cost ebook ($7)

Medium Tier:

• Group workshop sessions ($97)

• DIY online course ($297)

• Group coaching program ($997)

Highest Tier:

• VIP Day intensive one-on-one consulting ($2,500)

• 6-month business transformation program ($5,000+)

• Ongoing retainer relationship ($1,500/month)

Following a Customer Through the Value Ladder

Let's follow "Sarah" through a value ladder for a nutrition coaching business:

1. First Contact: Sarah finds the nutrition coach through a social media post about "5 Foods That Fight Fatigue" and downloads the free guide by joining the email list.

2. Building Trust: Over the next few weeks, Sarah receives valuable emails with nutrition tips. She then purchases a $27 meal planning ebook (low-risk entry product).

3. Core Offering: Impressed with the meal plans, Sarah joins a $197 group program focused on energy-boosting nutrition.

4. Deeper Relationship: After seeing results, Sarah invests in a $597 specialized 8-week program with more personalization.

5. Premium Experience: After a year, Sarah signs up for the $3,000 VIP nutrition intensive, which includes one on one consultation, personalized meal plans, shopping trips, and in-home cooking lessons.

Each step delivered increasing value while building trust, allowing Sarah to solve her problems at the level of investment she was comfortable with at each stage.

Creating Your Own Value Ladder

Now it's time to organize the products and services you identified in last week's visioning exercise into your own value ladder:

1. Map Your Current Offerings: List all your products/services and their current price points

2. Identify Gaps: Look for missing tiers where customers might need to make too big of a leap in price or commitment or where there is not enough variety in your offerings

3. Create Connection Points: Ensure each offering naturally leads to the next through additional value

4. Consider Customer Journey: Think about how a customer progresses through their needs as they work with you - are you meeting all of their needs as it relates to your business?

Price Points and Value Perception

Remember that each step up your value ladder should represent a significant increase in value to justify the higher price. This doesn't necessarily mean more hours of your time - it means more transformation or results for your customer.

For example, a personalized consultation or product might cost more more than your DIY course, but delivers much more value because the customer gets the result without having to implement everything themselves.

Your Action Steps This Week:

1. Draw out your value ladder with at least 3 tiers, from free/low-cost offerings to premium experiences/products

2. For each tier, clearly define:

   • The specific problem it solves for your customer

   • The transformation or result it delivers

   • Why this offering naturally leads to the next level up

3. Identify any missing tiers in your current offerings and brainstorm products or services to fill these gaps

4. Review your customer journey narrative - can you clearly explain how a customer would progress through your value ladder?

5. Consider which of your offerings should be your "signature" product or service - the one most customers will purchase

Next week, we'll dive into researching your competition to ensure that the design of your small business is uniquely filling a much needed or desired niche in your community.

Congratulations - you’re doing great! Thanks for spending time each week learning how to level up your business. ♥️

Here's to building a business you love to own,

P.S. Have questions about creating your value ladder? Reply to this email - I love hearing from you!