As an accountant, I understand the importance of scaling your business to increase profits, take home more money, and work fewer hours. One effective strategy to achieve these goals is by implementing a value or product ladder.
In this blog post, we’ll explore three compelling reasons why you need a value ladder in your business, focusing on the outcome or transformation it brings.
So let’s dive in and discover how a value ladder can revolutionise your business.
Progression and Customer Transformation
A value ladder provides a clear progression of products or services, guiding your customers towards a transformative journey. Starting with an entry-level offering, you gradually introduce higher-priced solutions that deliver greater value and address more comprehensive or sophisticated customer needs.
By offering a structured value ladder, you give your customers the opportunity to experience the full range of benefits your business provides. This progression not only increases their satisfaction but also nurtures their loyalty and trust, making them more likely to invest in higher-priced offerings. The higher the price of your product – the bigger the transformation for your customer.
Think about your customers and the transformation that you provide them. What is your value ladder? How does your value ladder support your income goal? How does your value ladder help your clients achieve their goals?
Increased Revenue Potential
A well-designed value ladder expands your revenue potential by catering to different customer segments. By offering products or services at various price points, you capture customers with diverse budgets and preferences.
Lower-priced offerings act as entry points, attracting a larger customer base. As customers progress through the ladder, they become more invested in your brand, making them more willing to pay higher prices for premium solutions. Why? Because they know your premium solutions will provide them with premium transformations.
The diversified nature of the value ladder ensures that your business isn’t overly dependent on a single customer segment or income stream. Revenue streams are distributed across different levels of the ladder, providing a robust and resilient financial foundation. This diversity acts as a protective measure, insulating and future-proofing your business from potential fluctuations in economic conditions or changes in customer behaviour.
Long-Term Business Growth
A value ladder sets the stage for long-term business growth by nurturing customer relationships and encouraging repeat purchases. By continuously providing value and addressing evolving needs, you keep customers engaged and loyal, leading to sustainable growth.
As customers experience positive outcomes and transformations at each stage of your value ladder, they become advocates for your brand. Their satisfaction and loyalty drive referrals and recommendations, attracting new customers and fueling your business’s expansion.
So let’s look at an example:
Here is my value ladder and how many monthly sales I would need to make each month to achieve £10k of sales per month at each level. Of course, the reality is a mix of each of these are sold in my business and the same would happen in yours.
1. The Academy – At £30 per month…
The Academy is my entry-level program for Bookkeepers who want to build a profitable bookkeeping business. It is also quite popular with new business owners who do the bookkeeping in their own businesses and want to be sure they are doing it right. At £30 a month, it’s a low-risk investment and gives the members a small taste of what it is like to work with me. I would need 345 members to generate £10k of Academy revenue per month.
2. Profit School is our entry-level business membership at £97 a month.
Profit School is for business owners looking to achieve a £5k monthly take home in their business. I would need x 104 members to make Profit School a £10k per month income generator.
3. At £597 I would need 16 members of The Profit Programme which is our group coaching and accountability program for ambitious entrepreneurs to generate £10k per month.
The Profit Programme leads from Profit School and is specifically for business owners looking to take home £10k per month from their business.
4. Virtual Finance Team – Growing. At £1,000 per month, I would need 10 x 121 clients of £500k – £1m in size who need a virtual finance team to help them from to their first or next £1m. This is the level of the value ladder where the customer is buying more of mine and my team’s time – they are getting a 121 service so this is the highest level of service in our value ladder.
5. A Virtual Finance Team for an ambitious and scaling business of £2-5m might come in at £2500 per month.
Our £10,000k product might be a 3-month growth and expansion program or virtual finance director service for a dynamic client. It might also be an R&D tax claim where we’ve saved tens of thousands in Corporation Tax.
Take a look at your own business, think about the clients you serve and the transformation you offer – now tell me your £10k value ladder!
In summary, a value ladder is a powerful tool for your business transformation. By offering a progression of products or services, you guide your customers towards a transformative journey, increase your revenue potential, and pave the way for sustainable growth. Implementing a value ladder strategy allows you to scale your business, make more profit, take home more money, and work fewer hours.
Ready to take your business to the next level?
How can I help you?
If you are currently taking home £1.5k to £3k – equivalent to a £25k-50k PAYE salary (before tax and NI) – then join me in Profit School to implement the strategies you need to take home £5k per month.
If you want to take home £10k per month equivalent to a £207k PAYE salary (before Tax and NI) – join me in The Profit Programme today and learn how to implement a value ladder for your £10k take-home business transformation.