What is a Value Ladder and How it Can Help Businesses?

BY Chris Loomis

Every business owner wants to generate more leads, capture more customers, boost sales, and be more well-known in their industry. To achieve your business goals, business owners should provide the best value for their customers. 

Aside from knowing different digital marketing strategies, a value ladder can help boost your business. This post will explain a value ladder and how it can help promote your brand. 


What is a value ladder? 

Also known as the sales ladder, the value ladder defines the steps a customer should take to get the most out of your product or service.

The value ladder is a concept that any business can use, but it is especially relevant for retailers. They need to understand what their customers want and how they want to get it, so they can provide an experience that will keep them coming back.

A good example of the value ladder in practice is grocery stores. Customers looking for bread might go straight to the bakery section, while those looking for ready-made meals might go straight to the frozen food section.

You start with the least expensive product or service with a value ladder. Then, you work your way up to the most costly goods you have. This effective marketing tactic will help get new customers and retain the current ones. 


Benefits of a value ladder 

A value ladder is an effective marketing tool. How does it work? For example, you can start by offering a free item or an introductory price for a new item. Of course, people will take it because it's either free or cheap.

After sending the free item or selling the item at a lower price, you can offer another product with a slight upgrade or charge. Then you can continue offering new products until you have sold the premium item or the customer decides not to accept new offers. 

It's okay if your customer did not reach the sales tier. At least you have made more sales through the value ladder strategy than trying to sell your products/services outright. 

A value ladder is effective because you start with a good deal, like a free item. Then, you can slowly increase the value of your product or service until you gain sales without shocking your customers. At the same time, you get an idea of how much your customers are willing to spend. 


How to create a value ladder strategy effectively

To ensure the effectiveness of your value ladder, you should structure your value ladder strategy properly. Here is how to create a value ladder: 

  1. Offer a low-value item (a free item or a product with an "introductory price"). 
  2. Make a tier-two offer (from free to a $5 deal, which is still considered cheap). At this early stage, keep the momentum going. 
  3. If they stop at tier two, it's okay. At least they have benefited from the services/products you have offered and even earned from it. Perhaps the customer may have second thoughts and decide to avail of your latest offer later. 


The value ladder strategy may not be as fancy as you think. However, it can bring value to your business better than you think. Contact an experienced digital marketing agency in Franklin, TN, today for other trending marketing strategies!

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