SFR 258: Part 1 - Designing Your Value Ladder

Follow along and create your own Value Ladder as I show you how I designed my personal one.

 

It’ll probably come as no surprise to learn that I love the book DotCom Secrets ;-) 

 

DOTCOM SECRETS - MY FIRST TIME

 

 I first read DotCom Secrets when I was in the army…

 

I was on a security line training - it was ten days lying prone in the dirt.

 

It might NOT surprise you to find out I have a very active brain, and I can only study bugs for so long…

 

Army uniforms have these cargo spots where you can store things 

 

I kept DotCom Secrets in a plastic bag in my pocket to keep it from all the dirt and the crazy intense rain. 

 

With my M16 in my right hand, I’d pull out DotCom Secrets… 

 

I’d take out my pen from these pen slots on the side of my uniform, lay my weapon down and take notes. 

 

I don’t have my original copy, which kinda stinks, but it was marked to death 'cause I really go deep.

 

Before I read DotCom Secrets, I was probably on business try number 10/ 11/ 12, or somewhere around that…

 

But it wasn't long after reading DotCom Secrets that things started really working for me, and part of this was because of the topic I want to talk about today, which is value ladders. 

HACKING THE VALUE LADDER

 

So what is a value ladder? 

 

Right at the bottom of page 23 of DotCom Secrets, it says:

 

A value ladder is where you want to take your client. 

 

*THAT’S IT* 

 

… that's all a value ladder is. 

 

It's where you want to take your client. 

 

Funnels are NOT the only thing that Russell's popularized in the Internet marketing space- he's kinda credited for being the one that popularized value ladders too.

 

And now,  I wanna teach you…

 

1. How I use value ladders after reading DotCom Secrets..

 

1. Where most people kind of mess up when they focus on creating a value ladder. 

 

 After reading DotCom Secrets, all my college notebooks were crammed with drawings of funnels and value ladders …

 

They were HUGE value ladders with tons of steps - they were MASSIVE value ladders.  

 

However, one of the things that I got stuck on was thinking that I needed the entire value ladder planned and designed before I could even start building a funnel. 

 

I want you to know, that's actually NOT true. 

 

That's NOT the way ClickFunnels builds their funnels, that's NOT the way I built mine, but most people think that’s what they have to do. 

 

When I ask "What's the model you're following?" A lot of times what that means is what’s the value ladder? 

 

Do you know the value ladder/ the model that your industry uses most and has all the success with? '

 

… ‘cause it's the template. 

 

When I started realizing that there where models,  I’d be sat in classes thinking, "Man, all I gotta do is follow the model! What’s the info product model?" 

 

YOUR CORE IDEA

 

Now, if you don't know, we have OfferMind coming up, and OfferMind’s purpose is to to help you find your core idea. 

 

The reason I’m bringing this up is that…

 

• I'm following the info product model

 

• If you’re in the e-commerce model there’s a value ladder that is proven to work really well for that too. 

 

• If you’re in, B2B, there's also a value ladder model. 

 

• ClickFunnels follows the software plus info product model. 

 

If you guys aren't watching on YouTube, this might be one of those episodes that’s powerful for you to watch, and actually see how I draw this out. 

 

So if we take the DotCom Secrets definition of a value ladder, remember that...

 

A value ladder is where you want to take your client. 

 

This is a cool framework that you can use to develop your entire company. 

 

But there are a few specific things about this model that I want to share with you that’ll help you get the MOST from it…

 

HOW TO NAVIGATE THE VALUE LADDER

 The goal of the the value ladder is to ascend your customer to very tip-top, (I'm gonna put a star there) - that's where you want to take your people. 

 

The top of your value ladder is where you want your dream customers and your dream product to be.

 

It's also the MOST expensive step on the ladder. 

 

It's the one where you give the most value, and the most amount of your time, (if you want to design it that way). 

 

And at the bottom, it’s the exact opposite. 

 

It's NOT that you don't want to sell people at the bottom, but the whole point/ the whole idea is that you want to start qualifying people. 

 

I can't draw very well, but let's say this is a phone… 

 

(There we go, there's a little phone right there) 

 

This phone, (a.k.a, value ladder step), is what's calling out to your dream customer. 

 

You bring people in on the cheap step and then you start to ascend them to the top.

 

So the value ladder is somewhere that you wanted to actually take people to…

I want to show you how I personally design my own value ladder, but first, I want to teach you the principles I use to design my value ladder. 

 

So that next post, you’ll see the application of these principles as I actually teach you what my value ladder is.

 

HOW TO INCREASE CUSTOMER VALUE

 

Recently, I’ve been really geeking out lately on this idea of campaigns, and one of the issues I've found is that most of the time... 

 

People don’t buy from you because your offers NOT good enough,

 ...it's usually 'cause they don't know *WHAT* they can buy from you. 

So my role is to create:

 

• Cool marketing messages

 

• Cool offers

 

• Campaign noise around offers

 

… but it's also my role to educate my customers on what they can buy from me.

 

Sharing your value ladder with your customer base is one of the easiest ways that you can educate your customers on what they can buy from you.

 

•  How many of you guys, right now, as you guys are listening or watching this, how many of you guys, even know that there's the option for me to fly to you? 

 

(That's something we're probably gonna take away, but I’ve been doing it for a while though.)

 

•  Did you know that there's an option where you can fly to me for a day? 

 

...there's all these cool things that people just don't know about. 

 

And so I've realized, "Man, my role is to educate the value ladder, NOT just the product." 

 

I think it was Peter Drucker who talked about the only two obligations an entrepreneur has are marketing and innovation. 

 

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation - P Drucker

One of his definitions of marketing is education for a sale. 

 

Every enterprise is a learning and teaching institution. Training and development must be built into it on all levels - P Drucker

 

Drucker believed the marketers needed to educated people, so that they’d actually go buy.

 

My definition of marketing is:

 

Marketing is changing beliefs for the intent of a sale - S Larsen

 

(I can feel I’m not telling enough stories, so hopefully, you guys can follow me with this.) 

 

But anyway, I started to realize was that:

 

 I need to create mechanisms inside of my funnels that don’t just sell the product itself - I have to educate people on the other things that they can buy from me as well …

 

...and that I actually can automate huge parts of that process. 

 

(If you come to my events, I teach much deeper on this)

 

VALUE LADDER EDUCATION

There are eight ways that I create what I call value ladder education, and they're all automated ways that teach people how to go and make a lot of money. 

 

Now, let me walk through a few mechanisms with you guys. 

 

So I'm a One Funnel Away coach for ClickFunnels, I coach daily, and usually live (unless I'm traveling, sick, or something like that)…

 

There are like 6,000 people on this last challenge - it's a big one, we're having tons of fun with it.

 

One of the things we teach is that typically, (even if you're bad), you can make a dollar per person per month on your list. 

 

Typically, you can expect a dollar per person on your list per month. 

 

Now, what I've learned is that the $1 per person per month can easily become $2 with what I'm gonna share with you. 

 

Add a few other things, and you can make that $3 … then as you get better you can turn that into $4/ $5 per person. 

 
Right now, for every person on our list, (our list grew heavily in the past little bit here), but... 

 

With the list that I have right now, we do $3 - $5 per person per month on the list. 

 

What I'm gonna teach you right now is one of the easiest ways to manipulate this formula and increase customer value.

 

Value ladder education, (a.k.a, teaching your customers what it is they can buy from you), is one of the easiest ways to increase customer value.

 

There's a lot of automated ways so you're NOT having to be the one putting in more sweat equity. 

 

You just do it once, and it's all automated. 

 

SIX STEPS TO YOUR CORE OFFER

 

There are six steps that I use to create a core offer. 

 

… they have to go in a certain order as well. 

 

1. What is my market/ where is it?

 

1. Who is my dream customer in that market?

 

1. What problems do my dream customers have?

 

1. Identify the core problem

 

1. Find the core solution

 

1. Make the core offer

 

The first thing I do when I'm designing a new value ladder is...

•  I want to know what market I'm selling into. 

 

• I've gotta know what this red ocean is. 

 

• What is my market? 

 

Now once I know what my market is, I wanna know…

 

•  Who my dream customer is in that market. 

 

I'm not trying to sell the whole market. People mess that up all the time. 

Now once I know the who, that I'm trying to sell, I need to know…

 

•  What their problems are? 

 

• I list out what their problems are. 

 

• What problems are they trying to solve? 

 

Then ‘Who’ leads to ‘What’...  

 

This is where ‘The Dream’ comes in…

 

 Because NOW, from the ‘What,’ I can identify what I call ‘The Core Problem.’ 

 

"Stephen, what does that have to do with designing a value ladder?" 

 

It has EVERYTHING to do with it! 

 

And *this* is the reason why you may NOT know what's on my value ladder yet because I'm testing out my core offer...

 

I've had people offer me $1 million.

 

It's NOT a joke... 

 

They're like, "I'm dead serious, Stephen. I will give you $1 million for a funnel." 

I've said “NO!” - which it's baffling to them… 

 

And,  the why, is because of what I'm sharing with you right here. 

 

I don't want to be in a scenario where I'm like, "You know what, I could do that…” 

 

But the REAL question is, “Is it what I'm designing? 

 

The value ladder is the roadmap for my business and my activities. 

 

So if it's NOT time for me to be offering those kinds of deals, “A million bucks??? No thanks!” ;-)

 

I'm NOT saying I won't take 'em in the future, but, at that time, when the first BIG offer came, the answer was “NO!” 

 

I don't want to be in a scenario where I’m like, "Crap, I'm getting out of line with my value ladder." 

 

When I got hired by ClickFunnels there were only 14,000 monthly users - now there's 92,000. 

 

There were only 40 ClickFunnels employees - now there are 340. It's crazy! It has exploded! 

 

I joined ClickFunnels right before this major, explosive growth, and part of the reason why I know I can teach so much about this is because I was there:

 

• Helping 

 

• Experiencing 

 

• Designing

 

• Observing it

 

• Being a part of it

 

… I watched this HUGE, ridiculous growth happen.

 

 And so, these questions that I'm walking through are the kinds of things that were being tackled when I was at ClickFunnels.

 

When it comes to value ladder design, people are like,

 

•  Well first, I'm gonna do a free plus shipping book

 

• Then I'm gonna do a course

 

• Next, I'm gonna do a high ticket mastermind

 

• I'm gonna do a high ticket event

 

… that's all great, but *that* comes waaay down the road. 

 

 

 

What you need to know first is:

 

1. What's the market that your serving? 

 

1. Who is your dream customer? 

 

1. What are their problems?

 

1. Is there a core problem to be solved?

 

1.  You design a core solution

 

1. You create a core offer

 

Now, you’re finally at a spot where you can create an offer. 

 

You create a core solution, and from there you create a core offer - that's why I call it Your Core Offer. 

 

I place the core offer in the middle of the value ladder. 

 

And I start at that spot. 

 

WHY HAVE A CORE OFFER?

If you're NOT watching on YouTube, I strongly encourage you to watch this part of it - it graphically helps you to understand these pieces. 

 

I help people find out what their core offer is because the numbers work easier with ads. 

 

If I'm selling something that's mid-tier priced, I only need to sell one of 'em, and Facebook ads are covered for a while. 

 

Rather than me go straight to the top… and there are people who argue with me and say, "Go straight to the top..." 

 

I get it, and I've done that as well…

 

I'll be honest, the one I don't do first is the very bottom, and it's 'cause it's a little bit riskier. 

 

There’s a quote in my head, but I'm not very good at remembering the names of who said what…

 

 Anyway, the quote is something like:

 

 People spend more money for the same thing repackaged in a different way.

 

It's a powerful quote, and it's a quote that floats around in this space a lot. 

 

You have to understand that each value ladder is represented by an idea - it's actually a full idea.

 

I need to prove the idea almost more than the product itself. I’m proving out the idea, NOT just the offer! 

 

So once I know that…

 

•  My core offer delivers a core solution

 

• Which fixes the main problem

 

• Which helps solve my dream customer

 

• Which is targeted at one specific spot inside of my market... 

 

Man, now I can build a whole value ladder. 

 

But too many times, people are all like, 

 

"I'm gonna build this funnel, then this funnel, then this funnel, then I'm gonna publish this, and then I'm gonna make this continuity program..." and it's so fast…

 

...they build too quickly. 

 

All their focus is on getting that next funnel out... which is great after you've proven out the main idea and after you've proven the core offer. 

 

I hope this is making sense to you? 

 

(It's funny, I wanted to trial close you guys, even though I can't see you right now)

 

... but hopefully, this is helping ;-) 

 

So, I focus on the middle of the value ladder to prove out the main idea. 

 

SAME IDEA DIFFERENT VALUE

 

 Now that the idea is actually proven for the entire value ladder, my whole goal is to go in, and develop varying levels of value on the same ladder. 

 

I can go do something more high-touch with my time up here. I can go develop a cool mastermind up at the top up here - that's lots of value. 

 

I have the same ideas at the bottom of the value ladder, but now I'm gonna have:

 

• The Book

 

• A Challenge

 

•  CDs 

 

• Courses

 

• A Continuity-based Program

 

...I'm gonna have all this stuff. 

 

And it works because I've proven out the main core offer and the main core idea. 

 

And with the cash flow from the middle of the value ladder, I get to:

 

•  Skip things like VC funding

 

• Build a business 

 

• Put systems together that free up my mental faculties enough to go build the rest of these funnels. 

 

HOW TO PAY FOR EXPENSIVE THINGS IN YOUR BUSINESS

 

As a business, we're running lean on purpose. 

 

I don't want a ton of people inside of my company as far as employees and stuff like that, I just don't. 

 

But the reason I get to do it that way, and the reason we're cash flowing so hard right now is that I follow my six-step model that helps to clarify the way the value ladder is used... 

 

• 'Cause you do want to upsell people

 

•  You should bring in the bottom of the value ladder individuals. 

 

… but all in good time. 

 

One of my favorite book, Ready, Fire, Aim, teaches that your goal, as a beginner entrepreneur, is just to get enough customers  

 

You're just trying to get a big ole list.

 

 Once you have a BIG list of customers, anything you sell to them afterward is MORE likely to be successful “because so many of your existing customers will buy it.” 

 

… that's exactly how the book it says. 

 

Now, when I need to get more people in a funnel/ business), then I go build something at the bottom of the value ladder. 

 

The reason I don't have a book right now is that I don’t need leads.  

 

It's the reason why I don't have a lot of cheap stuff right now, 

 

I don't need leads. 

 

Do you see what I'm saying? 

 

(I’m gonna make this a two-part series... 

 

I want you to know the principles behind my value ladder so that you’ll have the context when I teach you my value ladder… and it’ll make more sense to you.) 

 

HOW TO KNOW WHAT TO BUILD NEXT?

 

One of my favorite individuals is Alex Charfen,  in fact, I just interviewed him…

Alex Charfen is a BEAST. 

 

I've learned A LOT from Alex, the book Clockwork (great book btw,) and James Friel about building a business…

 

Now, there are five criteria that I analyze my business on, and this is how I determine what to build next in my value ladder...

 

 Ohh! What's up? 

 

The first thing, I go and I figure out what I'm gonna go build on.

 

I want to see:

 

1.  How well do I get leads? 

 

1. How well do I convert them? 

 

1. How well do I deliver the stuff that they bought? 

 

1. How well do I retain them?

 

1. How well do I upsell them? 

 

(This is how I personally do it - I know there are different formats here and there) 

 

And so, I break those categories out separately and I rank myself…

 

 For example: 

 

If I start getting low on leads, I’m ranking myself, “Oh, dude, your leads are kinda low right now, darn it..." 

 

I start asking:

 

• What should I go build on my value ladder next? 

 

• What would get me a lot of leads really quickly? 

 

ANSWER = BOTTOM OF THE VALUE LADDER STUFF

 

I don't need more leads right now! That's why I don't have bottom of the value ladder products. 

I've had a few people reach out, (and if a few people have reached out, it tells me a lot are thinking it), and ask, “Stephen, why don't you have a book yet?" 

 

The answer is…

 

Man, I got more leads than I can handle, so that's NOT what my personal business scenario needs right now. 

 

Now you might be like, "Stephen, I need leads." That's great, but don't compare yourself to me. 

 

I just follow the formats and formulas that cause success.

 

In order to decide what to build next, I answer the questions:

 

 

• How well do I convert leads? 

 

 

A: You know what, I convert pretty high. So I don't need to focus on the actual sales message or the offer. 

 

 

• How well do I deliver? 

 

 

A: I deliver really high! I know I do. 

 

 

• How well do I retain an upsell? 

 

 

A: Well. 

 

 

• How well do I upsell? 

 

 

A: *NOT WELL*

 

… so the next thing I'm building is an upsell. 

 

Meaning, there's NOT a lot at the top of my value ladder…

 

So the next thing I'm focusing on is on top of the value ladder…

 

... because that’s the thing that I'm suckin' at the most at right now. 

 

I just look at it the value ladder objectively and think,  "Oh man, I gotta do this.” 

 

 I was listening to the book Clockwork while mowing the lawn, and that's where I learned this...

I've had so many epiphanies mowing the lawn, it's crazy. I'm always nervous to get somebody to go do it for me because I have so many epiphanies. 

 

I need to look objectively at my company, and ask:

 

• Do we have leads? "Oh yeah, lots." 

 

• Are we converting them? "Yeah, we are." 

 

Okay, so that's not the issue, so where's the weak spot? 

 

So…

 

PLAYING TO MY STRENGTHS & WEAKNESSES

 

As an individual, and a solutions provider, I sell my strengths, but as a business builder, I solve my weaknesses. 

 

That's a big statement, (that has a lot to do with the value ladder)...

 

As a business owner, I fix my weaknesses, and I only focus on the weak part, to fix these five formula pieces. 

 

However, as a solutions provider, I sell my strengths, which makes total sense, right? 

 

But too many people get it switched. 

 

INSTEAD...

I let the model tell me what to go build on my value ladder. 

 

I know what purpose each phase of the value ladder is for:

 

•  The Bottom of the value ladder is hardcore about acquisition.

 

• The Middle is all about ascension, (whether I'm ascending them from the red ocean into my value ladder, or I'm ascending them from the bottom up) - it's a place of monetization.

 

•  The Top is the MOST monetizing.

 

And if I am not in a spot where I've tested out and proven the main idea of the whole value ladder, I shouldn't even be looking anything else. 

 

All I'm doing is testing ideas. 

 

Now, I know I've spit a lot at you in this blog- so if you need to re-read a few times, go for it (or check it out on YouTube). 

 

This is how I think about my value ladder, and this is the premise I design under. 

 

I know that I'm tossing A LOT at you with this - it was kinda heavy, but if you like this kind of stuff, we cover a ton MORE in this depth at OfferMind.

 

 Guys, go get a ticket at offermind.com.  

 

We’re, we're pushing pretty hard on tickets right now - so it's super-exciting…

 

There's a chance this baby will sell out.

 

 So anyway, go get a ticket at offermind.com, so I can teach you how to do this for your own business.

 

You’ll create a roadmap of what you actually need to do - not just from a business structure standpoint, (which is kinda what I'm showing here), but also from a marketing standpoint of how to actually get your offer out the door. 

 

Thanks for leaving reviews -  I just can't even tell you how much that means to me. It's very exciting to see those. Gets me pumped.

 

We spent a lot of money and a lot of time putting this content out, so your reviews are super fun, and I really love 'em. Thankful You.

 

 Get Rich - Do Good

 

BOOM! 

 

If you're just starting out you're probably studying a lot. That's good. You're probably geeking out on all the strategies, right? That's also good.

 

But the hardest part is figuring out what the market wants to buy and how you should sell it to them, right? 

 

That's what I struggled with for a while until I learned the formula. 

 

So I created a special Mastermind called an OfferMind to get you on track with the right offer, and more importantly the right sales script to get it off the ground and sell it. 

 

Wanna come? 

 

There are small groups on purpose, so I can answer your direct questions in person for two straight days. 

 

You can hold your spot by going to OfferMind.com. 

 

Again, that's OfferMind.com.

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