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March 28, 2020
Value ladders and How They Help Sales

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Value ladders and How They Help Sales

Business owners will tell you – sales are where we live and die. If we don’t have a solid sales strategy, we will not last.   Savvy business owners have learned that one key to success is a Value Ladder, a range of products that ascend in price, from lowest to highest-priced, so you can engage customers at the free/no-cost level and drive them to your sweet spot, your higher-priced product line, or bullseye offer. value ladder graph

What is a Value Ladder?

Value ladders are part of an overall marketing and sales strategy and integrate with your sales funnel.   Here’s an example:   A chiropractic practice offers a free 30-minute massage to get people in the door. From there, patients can go up the ladder to massage therapy, infrared sauna, pregnancy chiropractic consultations, pediatric care, maintenance/wellness sessions, and finally a regular series of chiropractic adjustments that result in long-term services.   The chiropractic practice started the value ladder with a free, introductory massage and took the customer up the value ladder and ultimately resulted in long-term chiropractic adjustments, the bread-and-butter of the practice.   Businesses that offer only one or a few higher-priced services or products face an all-or-nothing sales proposition.   The psychology of the value ladder is simple. Customers are attracted to free or low-cost offers but once in the door, or on your website, they are inclined to respond to upsell sales techniques.   Businesses without a value ladder can easily build one. We recommend the stack version. Here are some steps to get you going:  
  • Establish your core services pricing
  • Identify mid-tier products/services and pricing
  • Identify low-tier products/services and pricing
  • Identify a free or low-cost loss leader to attract new customers
  By starting with the low-tier offerings first, businesses can reach a larger audience with initial marketing and outreach. Those efforts will provide a larger base of potential customers that can start the journey up your value ladder.   Once you have built that base of potential customers, there are multiple platforms and applications you can use to convert those potential customers into paying customers. Email, SMS, chatbots, phone calls, and social media marketing allow you to guide your potential customers up the value ladder. online shopping

Stay focused on the customer’s needs

It’s important to remember during this process that your focus should be meeting your customer’s needs.    Some businesses make the mistake of focusing solely on the upsell. A value ladder allows you to meet their needs no matter where they reside on your value ladder. The price is secondary. Making more revenue is a bonus.    Customers respond to companies that anticipate their needs and provide viable options to meet those needs.    The person who goes in for the free massage wants some relief from muscle discomfort. Once in the chiropractic practice, they are more likely to commit to follow-up treatments.   Remember, the goal of any branding strategy is to communicate the reasons why customers should choose your business over all other options.   When the customer perceives there is value in what you offer you will earn their trust and their business.  


Once you have closed the sale, now you can focus on retaining the customer for future sales. It is a well-known fact in sales that once someone makes a purchase, they are exponentially more likely to buy from you again.   It’s less expensive to keep an existing customer than to get a new one. The cost of acquiring a new customer is more expensive than retaining an existing one.   Businesses that cracked the code on keeping customers over long periods are reaping the benefits.   Create products/services that focus on the following:
  • Solving their problems
  • Offering value-based solutions
  • Reinforcing the sales pitch

Upselling and down selling

Once your value ladder is in place, you can guide your customers up or down, depending on what level of product they have already purchased. Car dealerships know that when they have built brand loyalty in a customer that customer is more likely to stay with that brand when they are ready to upgrade their vehicle.   Dealerships build generational loyalty and see several generations of car owners come to their lots to purchase autos and trucks.   There is no reason why other industries and businesses cannot replicate that generational sales pattern.  

Hub and Spoke Model

For those who provide physical products, as opposed to digital and service-based businesses, the value ladder might not be the best approach.  graph Product-based businesses can consider the Hub and Spoke model, more suited to those lines of business.  In the hub and spoke model, the hub is the core product and the spokes are all the accessories and peripherals that enhance the core product.   For example, a women’s clothing retail business concentrates on dresses (the hub) and the spokes are all the accessories that can be purchased with a new dress (shoes, jewelry, makeup, etc.)  


Another important aspect of the value ladder is a continuity program. Many businesses offer membership or frequent buyer discounts that build brand loyalty and keep the customer going back to that business.   It can take some customers, weeks, months, even years to move up your value ladder, depending on product replacement cycles and shelf life.  A continuity program, enhanced by ongoing communications, will keep the customer engaged and strengthen their brand loyalty.  
Don’t forget the basics
While a soundly structured value ladder can keep your sales operation on target, never forget the basics in the art of sales.   Danny Wong, writing in Entrepreneur, reminded us of five enduring principles:  
  1. Don’t be tone deaf – Build rapport with customers and listen to their needs.
  2. Ensure that your responses are personalized – Chatbots, personalized communications and true customer service go a long way. Don’t be afraid to stray from the script when necessary.
  3. Be mindful of a customer’s true despair—As a business, have empathy for customers who are frustrated with the buying process. Don’t be afraid to be human.
  4. Find interest in the exchange – Cultivate a culture within your sales force that understands the criticality of human interaction. Sometimes a few extra minutes on the phone can build a lifetime of brand loyalty.
  5. Know when to fold 'em – Sometimes the sale is just not going to happen. Teach your sales and customer service reps when it’s time to let one go.
  Sharon Michaels, writing in Forbes, said to succeed in sales you need three listening and relationship building skills:  
  • Sincerity – Listen without an agenda, it’s not about your needs
  • Ethics – Don’t try to talk someone into something, listen to what they want
  • Asking – Serve others by asking questions that will assist them in making a wise buying decision