Are you a business owner who want to get more clients and increase profitability of current customers?
Then you will be aware of these challenges when acquiring new clients:
- One option to find new clients is to entice them with a deeply discounted offer, but you won’t make profit from that first transaction, so what to
- On the other hand, if you charge full prices to new clients, the conversions will be very slow and competitors will try to undercut you.
And for current clients
- How can you increase profitability if your client is using your full service offering already?
These are the questions business owners must often weigh up.
We’ve got good news. There’s a strategy which solves all these problems
- It converts new clients fast
- Increases profitability from current customers in a consistent manner
- Works very effectively in all industries
- Can be automated
It’s called a value ladder and here is how you can implement this in your business
1) On boarding a new client is like dating. We can’t ask for marriage on a first date and we can’t expect a prospect to make a large purchase immediately or else we let him go as a potential customer.
With dating, we make small commitments at a time, grow to like and trust the other person more and more over time and eventually we are ready to commit to marriage.
The same with new clients.
2) Look at your current product offering and ask yourself “How can I create lower cost offerings for first time buyers” and “How can I create more expensive products which my loyal customers might be interested in”
I.e. for a gym owner: Instead of having one main offer: A monthly paid gym membership of $100, he can craft a lower cost entry point for new members like a reduced fee of $25 for the first few months or a body assessment and personal plan at a fixed low price.
On the other side of the spectrum he can design a 3 month “body transformation package” which includes personal training, meal plans, supplements and a customized plan for $600.
This is an example of changing 1 into 3 offers, from low to high, but this can be repeated to add several offers in between.
3) For new clients, serve the deeply discounted offer to prospects by using detailed audience targeting capability of Facebook and Google Ads
The goal is not to be profitable with the first deal. The goal is to get the new client through your door.
Once they visit and experience your business, you make the next small up sell.
As they get to know and like you they are interested to see what else you offer and buy from you.
This process continues as you gradually take them up the value ladder to buy higher profit products from you over time.
4) For current clients, the same process applies, depending on where they start on the value ladder
5) “A lot of times, people don’t know what they want until you show them” – Steve Jobs
So ask yourself “What else can I offer my clients which is related to my current offering”. Creating more solutions will mean more up sell opportunities to current clients and an increase in profitability per client
For the gym this can mean adding:
- Supplement sales
- Other forms of fitness classes like yoga / boot camp
- Meal plans
- Ad hoc fitness challenges etc.
6) Automate the process
It can be quite cumbersome to keep track which products each client is using and what the next suitable offer for him can be.
By integrating smart systems with your CRM and using email sequences and tagging functionality you can automatically offer certain up sells to pre-selected clients.
In terms of new clients: It’s important to use an effective system which leads to high conversions. Such a system will automate
- Facebook and Google Ads
- Unique offer landing pages instead of a general website
- Client bookings via a tool like Calendly
- CRM updates with new leads
- Email sequencing to build trust and increase the probability of the client visiting your business
Below is a free video where we share more detailed nuggets and show you how to implement this in your business: