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