How To Increase Your Revenue WITHOUT Getting More Customers Using The ‘Value Ladder’ Secret (With Examples)

Most businesses only have a customer buy from them once, and they never see that customer again.

Sounds normal, right? But it’s actually leaving money on the table, which is so easy to make.

The next 3 minutes will teach you why this is the case and how to prevent it, using a secret called the value ladder.

The Most Important Metric You Must Track

Lots of businesses simply track how many customers they’re getting, but that’s not enough.

What you should be tracking is the LTV - the LifeTime Value.

In other words, how much is a customer worth to you over a lifetime?

If they buy one roof repair worth £400 once and then never use your services again, your LTV is £400.

But if they get a repair, and a monthly drone inspection, AND eventually a full roof replacement, your LTV can be something more like £20,000!

For the same customer!

Let’s go into how this works, and then a live example of how any local business can implement this.

How a ‘Value Ladder’ Works

This is a value ladder. (This concept was introduced by Russell Brunson in the book 'Dotcom Secrets'.)

You give customers something free (the bait), then a cheap offer (low-ticket purchase), then a more expensive offer (mid-ticket purchase), and then a premium offer (high-ticket purchase).

This works because you build up trust gradually.

If someone gives you something valuable for free, you trust them more and are more willing to give them something than if a man walked up to you on the street and said, “Hey, wanna buy my £10,000 course?”

You’d think that man was crazy. It’s like he’s asking you for your kidney.

That’s why we offer cheaper things at first. You get customers to trust you so that when they DO need to buy that expensive product, you’re the first business they think of because you’ve already provided so much value for them.

Let’s dive into an example.

Example of How This Works

Let’s use the example of a roofing company.

Let’s say a storm has just hit the area, and roofs are weaker than usual.

The first thing you would do… is offer some value for free.

Sounds counterintuitive, right? Why would you offer anything for free? That’s how a business fails!

Stay with me. We’ll get to making big money in a second.

Your free value can be a free roof safety inspection after the storm.

You inspect the customer’s roof, and you give them a report of how things are. Few weak areas, few parts are still working perfectly.

The next thing you do… is you offer a lower-priced purchase.

Let’s say it’s a monthly £50 drone inspection to ensure their roof is safe.

They buy the drone inspections, you send them monthly reports, but eventually… their roof needs some repairs, and you inform them of that.

Because you’re the expert and you’re the one checking their roof, they trust you to do the repair.

They pay you £400, and you repair some shingles on their roof.

After a longer time, they don’t want to keep getting repairs from you and want a longer-term solution. So you offer to add some protective coating for £1,000.

You do that, and now their roof is protected.

But eventually, a new roof replacement is needed, and because you’ve been their roofer for several years, you’re the first company they think of.

So we went from:

Offering something for free (roof inspection, £0) → Giving them cheap value (monthly drone inspection, £50) → Giving them more expensive value (roof repair, £400) → Giving them even more expensive value (protective coating, £1000) → Getting them to buy a premium product (roof replacement, £8000)

Let’s say this happens over 10 years.

Monthly Drone Inspections - 50 x 12 x 10 = £6000

1X Roof Repair - 400 x 1 = £400

1X Protective Coating - 1000 x 1 = £1000

1X Roof Replacement - 8000 x 1 = £8000

Total value over 10 years - £15400.

And most businesses do either 1 repair or 1 replacement, leaving one customer’s value at £400 or £8000 when it could be £15400.

This might seem like a lot of work to do, but just remember, you only have to do this once.

After that, you can use it for…

Every. Single. Customer.

If you found that article helpful, check out some others on this page! This is the 45th, so you’ll find plenty of good reading material.

Sincerely,

Filip Szemiczek