No matter what business you’re in, you have three avenues of growth available to you. 

The first and most obvious? Get more customers or clients! This is where most business owners focus their efforts — through driving more traffic, generating more leads, or converting more of them into buyers. 

It’s the most common way to grow a business… and also the hardest one. 

Why? Because turning a random stranger into a loyal customer or client is capital-T Tough. There are so many steps involved, and so many things that could go wrong during any one of them.

So instead, as a business owner, you might want to consider the other two growth levers:

  1. Boosting your average order value, or how much money your customers spend with you per transaction, and…
  2. Increasing your customer lifetime value (LTV), or how many times someone purchases from you over their customer lifecycle.

Your greatest potential for profit and growth can be unlocked with these two levers. And the reason for that is simple…

It’s much easier to sell to existing customers than to convert new ones — 60-70% easier, to be exact!

And today, I want to discuss growth lever #2 with you — boosting customer lifetime value. In this week’s article, I’m going to share with you actionable strategies and techniques that will help you multiply the LTV of each buyer. Literally! As in, 2x, 5x, or even 10x it.

Because having a truly thriving business isn’t about getting as many new customers as possible… 

…it’s about having as many repeat customers as possible.

Sound good? Then let’s dive in with the most fundamental principle of boosting lifetime value. 

Enter the Value Ladder.

Pictured: a tree house backlit in sunset colors, a swing set hanging from one of the branches. On the foreground, two silhouettes of a man and a woman are looking at the treehouse.

 

Part 1. Mapping out the Value Ladder for your business

Let’s start from the beginning: what even is a Value Ladder?

Simply put, it’s a lineup of offers that a business makes to each customer / client throughout their journey. Value Ladders are designed to meet the buyer where they are at different stages of their lifecycle, delivering exactly what they need from the business at that point.

Now, let’s break down what this concept can look like for different business models. For instance, a service-based business can have a Value Ladder that goes something like this…

 

A service-based Value Ladder

Just for learning purposes, I’m going to make up a service-based company and map out the Value Ladder for it. I was going to use a marketing agency as an example, but let’s get me out of my comfort zone a little bit and go with something unfamiliar…

Like, say a landscaping business.

So here’s a sample Value Ladder for a landscaping company:

  • Free offer — our made-up business needs something enticing and free to qualify leads and motivate them to share contact information. For this tier, a lead magnet (e.g. a lawn care guide or checklist) or a free landscape inspection / evaluation will work nicely.
  • Entry-level offer — to convert qualified leads into clients, we need something valuable but easy to deliver and not very expensive. A lawn care package that includes mowing and pest control could do the trick.
  • Core offer — this will typically be a service or a package that is most popular or most profitable for the company (or both). Let’s do a “grounds beautification” package that includes not just basic landscaping work, but also design and installation of new and delightful features: ponds, flower beds, outdoor lighting etc.
  • Premium offer — at the premium level, it makes sense to pull out all the stops and offer something truly comprehensive, like a complete landscape makeover. This type of service will only appeal to a small percentage of high-paying clients, but that’s totally OK.
  • Continuity offer — this is a monthly or annual service that doesn’t directly compete with all the others. E.g. maintenance work and seasonal work (leaf removal, ice management etc.) make for a great continuity offer for our made-up landscaping business.

See how each of these offers escalate in value and scope, keeping clients around for longer and capturing more value from each buyer? That’s exactly what makes Value Ladders so powerful for increasing lifetime value!

But this example applies just to service-based businesses. What would a product-based Value Ladder look like? Let’s investigate…

 

A product-based Value Ladder

For a business selling products, especially physical ones, the Value Ladder looks less like an ascending ladder and more like a spinning flywheel. Your goal becomes to attract buyers and keep them coming back with lateral offers — similar in value and scope, but different in content.

For example, let’s see how an ecommerce brand selling lingerie might create a Value Ladder…

  • Free offer — for this, a straightforward discount coupon in exchange for an email subscription will be more than enough to capture qualified leads.
  • Entry level offer — lots of ecommerce brands use discounts and sales to drive first-time purchases… but offering a bestselling product, or a special bundle deal could work just as well.
  • Core offers (note the plural) — after the first purchase, keeping people buying mostly boils down to smart product recommendations, launches of new items, and themed collections that communicate a sense of novelty and cohesion.
  • Continuity offer — even a product-based company can implement continuity offers. For example, a subscription where they get X items delivered to them every month for a price, or a membership program with exclusive discounts and items that aren’t available to the general public.

And there you have it! This is how the Value Ladder works when applied to different business models. Now, I’d like to give you a little bit of homework to complete as an action item:

Sit down and map out all your existing offers, free and paid, into a Value Ladder. See if your business has enough offerings in place to serve customers / clients at every stage of their lifecycle — not just when they buy for the first time.

This is the secret to keeping lifetime value high, and your company thriving.

 

Part 2. Implementing the Value Ladder in your marketing

Now, let’s discuss the practical steps of implementing the Value Ladder in your marketing funnel. The specifics can look different depending on how you choose to attract and convert buyers, but the fundamentals remain the same.

Here’s what the process looks like at a high level…

  1. Leverage your free offer to qualify and capture leads. Driving as much targeted traffic as possible to your free offer will give you plenty of leads to work with. This should be the foundation of any high-performing sales pipeline.
  2. Nurture leads for 5-7 days before presenting your entry-level offer. To maximize uptake at this early stage, you want to make your offer as enticing as possible. Consider doing a limited time, one time only offering to capitalize on scarcity and urgency. The more exclusive and fleeting your entry-level offer appears, the more motivated prospects will be to say yes to it!
  3. Upsell, downsell, and cross-sell where appropriate. Average order value is no less important than lifetime value for growing your bottom line. Make sure that those buyers who are open to spending more money with you get the chance to do so — the worst thing that can happen is they will just say no and pay you a little less. Use our upselling guide to help you.
  4. Keep nurturing those new buyers into higher-level offers… OR recommend lateral offers based on what they’ve purchased before. The first tactic makes more sense for a service-based business, while the latter is more suited to a product-based one.
  5. Don’t forget to pitch your continuity offer as well. Chances are, your buyers will want to keep receiving the value you’re giving them, or maintain their results from using your products and services. So give them the opportunity to commit to you long-term! The best way to do that is after they’ve bought from you already and been benefiting from your offer for a while.

I know what you’re thinking, “Is Summer going to give me more homework?” Yes! Yes, I am.

Now, I want you to examine your marketing funnel closely, and see if it supports your Value Ladder. Do you have the means to market all your offers… or just some of them? If it’s the latter, think about how you can reorganize your funnel to cover the entire customer / client lifecycle.

For example:

Most business owners make the mistake of investing all their time and energy into the front end of their pipeline — the one that handles the conversion of leads into first-time buyers — and not doing nearly enough on the back end… a.k.a. the stage that turns one-off clients and customers into lifelong fans who buy again and again.

If this is you, then your first order of business is to make your funnel more comprehensive and robust, so each offer gets time in the spotlight!

And just in case you don’t have an existing high-converting marketing funnel in your business, I can recommend just the thing that will help you…

 

Go from zero to a high-converting funnel in just 5 days

Before you can make the most of your Value Ladder and skyrocket the lifetime value of each customer or client in your business… you need a robust funnel to make it happen.

Well, here’s the thing: funnels are an incredibly daunting subject!

There’s just so much to learn about lead generation, nurturing, conversion, friction, and a bajillion other things that it’s very easy to do nothing, and keep missing out on leads, sales, and profits.

You’ve spent enough time researching, learning, and doing nothing… it’s time for implementation.

Are you ready to take action — and finally start getting results from your funnel? Then you will love the 5-Day Lead Challenge created by Russell Brunson — Founder of ClickFunnels and a friend of The Draw Shop!

Check it out below:

Learn more about the challenge and create a high-converting lead funnel in 5 days


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