How a Value Ladder Increases Customer Acquisition & Average Order Value

by Robin Hurtado | 5 min read

Attracting more customers and getting customers to spend more money are two important factors for growing a profitable business.

In this article, we will cover everything you need to know about value ladders including how to use them to increase customer acquisition and average order value.

What is a Value Ladder?

The best way to demonstrate a value ladder is to show an example of a business with a value ladder, and a business without a value ladder. Below is how an example would look for an author:

Author Without a Value Ladder

Offering only one book on website priced at $25

In this instance, this $25 offer can be considered one of the middle steps on the ladder. What the value ladder teaches is that you should add steps below and above this $25 offer. Below is an example:

Author With a Value Ladder 

Offering free content on the blog

Offering the first chapter of the book as a free e-book download with email signup

Offering one or more books at $25

Offering a four-book bundle for $75

Offering a bundle for all books + monthly coaching call with the author for $500

Adding steps below and above the $25 offer serves two main purposes:

If you have customers spending $25 on your business, a portion of them will likely purchase something more valuable if it were available. There are always premium purchasers who are willing to pay more for higher levels of service. Don’t miss out on these customers just because you don’t have an offer in place.

Ultimately, you want customers to purchase your top offer. In most cases, the way that happens is by bringing in customers through the bottom of the ladder and moving them up the ladder through incremental value upgrades. Bottom steps are essential for a high-performing ladder.

How Does a Value Ladder Increase Customer Acqusition?

A value ladder increases customer acquisition by opening your business up to more customers. This is important because customers are different and go up ladders in different ways:

Some start with the free blog and work their way up

Others start in the middle with your book

Others may be ready to leap straight to the top offer

If you only offer one thing, you are only allowing your business to convert customers on that step of the ladder. This means you are missing out on customers on lower levels of the ladder who either:

Don’t have $25 to spend on a book at the moment

Don’t know you enough to spend $25 on your book just yet

Without a value ladder, you close the door on that customer for good. And unfortunately, that customer will land on a competitor’s website who has a value ladder in place, and your competitor will reap the rewards.

For any business experiencing stagnant sales on its main offer, I highly recommend adding a few lower values offers to increase customer acquisition.

How Does a Value Ladder Increase Average Order Value?

A value ladder increases average order value in two main ways:

Like we mentioned before, if a customer is ready to spend $250 but all you have on your website is a $25 offer, you are missing out on opportunities to 10x average order value. It’s like a customer walking up to you with $250 and you telling them you only accept $25.

The best way to sell more high-value offers is to set a path for customers to cross. Most customers aren’t willing to jump over a river to get to your offer. But if you set a few stepping stones in the form of lower value offers, more customers will feel comfortable crossing over.

How to Build a Value Ladder

Now that we know how important value ladders are, how do you build one? The best way to build a value ladder is to reverse engineer high-performing value ladders. There are three main ways to do this:

Everyday Life

Start by looking at your purchasing patterns and looking for examples of when you went through someone else’s value ladder.You can also become more aware when you interact with businesses in general. Just by becoming more aware of value ladders, you will start seeing more of them.

Inside Your Niche

One of my favorite tactics is looking at top competitors inside my niche. I know these businesses have larger teams and have done a lot of the heavy lifting already. Look through at least 5 top competitors and you will find adequate value ladder inspiration.

Outside Your Niche

Sometimes a niche can get stagnant with everyone doing the same thing. Looking outside your niche for value ladders can provide out of the box ideas that can separate you from your competitors.

After you’ve done the value ladder research mentioned above, you will have more than enough ideas to start piecing together an effective value ladder for your business.

An Effective Value Ladder Example

I’ve seen my fair share of value ladders and one that stands out is the Dr. Squatch value ladder.

The bottom portion of the value ladder has diverse selection of low value offers

The middle portion of the value ladder has a few enticing mid-value bundles

The top portion of the value ladder comes in the form of a subscription program. This value offer can easily add up to a few hundred dollars per customer over time. 

Value Ladder Takeaways

The key to ensuring results is to focus on creating a value ladder and not a price ladder.

In that last example with the subscription program, the reason the program is effective is not just because it’s a higher-priced offer. It’s because the offer increased value to the customer as well.

The subscription program saves the customer money overall and they receive soap to their doorstep automatically every quarter.

To sum it up, in order to build a profitable value ladder, you need to keep these three things in mind:

Focus on value

Make sure your ladder has a bottom, middle, and top

Put the cherry on top with a continuity program

Web Design Digital Marketing Attract Convert Animation

Get More Customers

Get tips to grow your business straight to your inbox!

Affiliate Links

Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice.

I first learned about the concept of a value ladder from a book called DotCom Secrets. I highly recommend this book for anyone who wants more information about value ladders and other online business topics.

I am a Dr. Squatch customer and do recommend using them. However, the primary reason I included them in this blog is to show an example of well done value ladder.

Connect With Us

Explore Services

How a Value Ladder Increases Customer Acquisition & Average Order Value

by Robin Hurtado | 5 min read

Attracting more customers and getting customers to spend more money are two important factors for growing a profitable business.

In this article, we will cover everything you need to know about value ladders including how to use them to increase customer acquisition and average order value.

What is a Value Ladder?

The best way to demonstrate a value ladder is to show an example of a business with a value ladder, and a business without a value ladder. Below is how an example would look for an author:

Author Without a Value Ladder

Offering only one book on website priced at $25

In this instance, this $25 offer can be considered one of the middle steps on the ladder. What the value ladder teaches is that you should add steps below and above this $25 offer. Below is an example:

Author With a Value Ladder 

Offering free content on the blog

Offering the first chapter of the book as a free e-book download with email signup

Offering one or more books at $25

Offering a four-book bundle for $75

Offering a bundle for all books + monthly coaching call with the author for $500

Adding steps below and above the $25 offer serves two main purposes:

If you have customers spending $25 on your business, a portion of them will likely purchase something more valuable if it were available. There are always premium purchasers who are willing to pay more for higher levels of service. Don’t miss out on these customers just because you don’t have an offer in place.

Ultimately, you want customers to purchase your top offer. In most cases, the way that happens is by bringing in customers through the bottom of the ladder and moving them up the ladder through incremental value upgrades. Bottom steps are essential for a high-performing ladder.

How Does a Value Ladder Increase Customer Acqusition?

A value ladder increases customer acquisition by opening your business up to more customers. This is important because customers are different and go up ladders in different ways:

Some start with the free blog and work their way up

Others start in the middle with your book

Others may be ready to leap straight to the top offer

If you only offer one thing, you are only allowing your business to convert customers on that step of the ladder. This means you are missing out on customers on lower levels of the ladder who either:

Don’t have $25 to spend on a book at the moment

Don’t know you enough to spend $25 on your book just yet

Without a value ladder, you close the door on that customer for good. And unfortunately, that customer will land on a competitor’s website who has a value ladder in place, and your competitor will reap the rewards.

For any business experiencing stagnant sales on its main offer, I highly recommend adding a few lower values offers to increase customer acquisition.

How Does a Value Ladder Increase Average Order Value?

A value ladder increases average order value in two main ways:

Like we mentioned before, if a customer is ready to spend $250 but all you have on your website is a $25 offer, you are missing out on opportunities to 10x average order value. It’s like a customer walking up to you with $250 and you telling them you only accept $25.

The best way to sell more high-value offers is to set a path for customers to cross. Most customers aren’t willing to jump over a river to get to your offer. But if you set a few stepping stones in the form of lower value offers, more customers will feel comfortable making the leap.

How to Build a Value Ladder

Now that we know how important value ladders are, how do you build one? The best way to build a value ladder is to reverse engineer high-performing value ladders. There are three main ways to do this:

Everyday Life

Start by looking at your purchasing patterns and looking for examples of when you went through someone else’s value ladder.You can also become more aware when you interact with businesses in general. Just by becoming more aware of value ladders, you will start seeing more of them.

Inside Your Niche

One of my favorite tactics is looking at top competitors inside my niche. I know these businesses have larger teams and have done a lot of the heavy lifting already. Look through at least 5 top competitors and you will find adequate value ladder inspiration.

Outside Your Niche

Sometimes a niche can get stagnant with everyone doing the same thing. Looking outside your niche for value ladders can provide out of the box ideas that can separate you from your competitors.

After you’ve done the value ladder research mentioned above, you will have more than enough ideas to start piecing together an effective value ladder for your business.

An Effective Value Ladder Example

I’ve seen my fair share of value ladders and one that stands out is the Dr. Squatch value ladder.

The bottom portion of the value ladder has diverse selection of low value offers

The middle portion of the value ladder has a few enticing mid-value bundles

The top portion of the value ladder comes in the form of a subscription program. This value offer can easily add up to a few hundred dollars per customer over time. 

Value Ladder Takeaways

The key to ensuring results is to focus on creating a value ladder and not a price ladder.

In that last example with the subscription program, the reason the program is effective is not just because it’s a higher-priced offer. It’s because the offer increased value to the customer as well.

The subscription program saves the customer money overall and they receive soap to their doorstep automatically every quarter.

To sum it up, in order to build a profitable value ladder, you need to keep these three things in mind:

Focus on value

Make sure your ladder has a bottom, middle, and top

Put the cherry on top with a continuity program

Web Design Digital Marketing Attract Convert Animation

Get More Customers

Get tips to grow your business straight to your inbox!

Affiliate Links

Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice.

I first learned about the concept of a value ladder from a book called DotCom Secrets. I highly recommend this book for anyone who wants more information about value ladders and other online business topics.

I am a Dr. Squatch customer and do recommend using them. However, the primary reason I included them in this blog is to show an example of well done value ladder.

Connect With Us

Explore Services