An effective way to increase your profits - Establishing the value ladder

What is a value ladder? How can you make most out of it? Before anything else, let me tell you that people will pay different prices for the same content packaged in different ways. Why is this so? Because every individual has a different lifestyle. For example, one person would go buy a book and read it. But the other hate reading but would love to know the content of the book as well, instead bought a CD version and listen to it. It's still the same book, same content but he's willing to pay more for a CD and listen to it rather to read it.

So out of it, as a business owner you can increase the price of something as you increase the value of it. So rather than focusing on making money, focus on establishing the value ladder for your business. If you did so, money will just follow.

Here are the steps you need to establish a value ladder for your business:

• The bottom step of the ladder is text—an e-book or a hard copy book. People will pay the least amount of money for a book, and it will probably cost you much time and effort to write it. For example, I’m writing a book right now that we’ll sell for about $15 online.

• The next step is audio. Same content, but people will pay a little more because it’s. In other words I jump up from a book to CD courses. With a little more depth to the teaching, we sell courses from $97 to $997 depending if it’s a one-CD or 15-CD teaching.

• The next step on the value ladder is video. Here people can watch the presentation, see the power point slides, and watch you give examples on DVD. And, yes, they’re willing to pay more for that.

• Next come seminars. This is a live setting where people can ask questions, and you can explain things better in response. You provide more value, and you can charge more for it.

• The next step is live training, like one-on-one coaching. People have one-on-one access to a coach, which means again higher value.
  

• Then you can become a business partner with others. For example, in our partnership program, I’m a business partner with nine people. I’ve got some skin in the game. I want to make sure they succeed because when they make money, I make money.

• The final step is ownership. You can do franchising—provide the opportunity for people to own parts of your company.
  

Obviously the price increases as the value you provide increases.