I know that this exercise seems simple, but it is the key to everything else we will be discussing in this book. So take a few minutes now and really answer these four questions.
Up Next: In the next chapter, we are going to dig a little deeper and focus on the steps you need to follow to lead your dream customer from taking the “bait” to consuming your product offerings to arriving “where” you want to take them. If you structure this correctly, people will naturally ascend to where you want them to be. They will give you more money, and you’ll be able to serve them at a much higher level.
Russell, are you a smoker?”
“What?” I responded. “No, I’ve never smoked in my life … why do you ask?”
“Well, I noticed that your teeth are turning a little yellow, and I wasn’t sure if you
were a smoker … or maybe you drink coffee?”
“No, I don’t drink coffee either …,” I said. “My teeth look that yellow!?”
Those were the first words my new dentist said to me about 10 minutes into our first
When I started my new business a few years earlier, my wife and I had no insurance
of any kind. I was just hustling to sell things online to try and put food on the table.
Then about four or five years into my business, I started hiring employees. What I
didn’t realize when I first hired them was most “real” companies give their employees
benefits. Because I had never had a real job before, I wasn’t really sure what benefits were
(besides hanging out with me all day, which I assumed was the best benefit ever!). No,
they wanted health insurance and dental insurance. So I decided to cave and get them all a
“benefits” package. Within days of getting our new dental insurance, I got a postcard in
the mail offering a free teeth cleaning.
“Sweet! We’ve got insurance. It’s a free cleaning. I’m in.”
And that’s where it all started …
Within minutes, the dentist commented on my “yellow” teeth.
“No, I don’t drink coffee or smoke. Are they really yellow?”
“Yeah, they are. But don’t worry. If you want, I can go out back and make some
custom teeth-whitening trays for you. You’ll have to use them for a few weeks, but if you
follow the system, your teeth will be white again.”
Well, I’m sure you know what my response was …
“Yes, please! I don’t want yellow teeth.”
The dentist kept working on my teeth, and a little while later, he said, “So, did you
have braces when you were a kid?”
“Yeah, I did. How can you tell?”
“Well, your two bottom teeth are shifting again, and that usually happens to people
who had braces.”
“My teeth are shifting? Seriously? What can you do about that?”
“Well, if you want, I can build a retainer for you, which will help keep your teeth in
When I walked into the dentist office that morning, I had come in for a free teeth
cleaning. And in less than an hour, I walked out paying over two thousand dollars for my
whitening kit and my new retainers. This dentist had strategically taken me through a
powerful process that I call a Value Ladder.
First, he had created bait (free teeth cleaning) that would attract his dream client (me).
Second, he provided value to me by cleaning my teeth and noticing that my teeth had
become yellow. Because I had received value, I naturally wanted to move forward and get
additional value from him.
He then found another way that he could provide value to me—the retainers—and
again, I naturally took him up on that offer as well.
Now, for many dentists, they make the most money and provide the most value for
their patients by offering cosmetic surgery. Luckily, I didn’t need any cosmetic surgery on
that visit, or I could have been out ten thousand dollars or more.
On my way out the door, the secretary scheduled me for another appointment six
months later, adding me to their “continuity” program. Continuity is where you continue
paying on a weekly, monthly, or yearly basis until you decide to cancel. This dentist had a
perfectly executed Value Ladder (fig. 2.2).
One of the first things I explain to people when I start working with them is the concept of a Value Ladder, and it’s the first thing you have to build out before you can start working on any sales funnel. If you look at how we structure it, you’ll see that on the left hand axis we have value, and on the bottom axis we show the price (fig. 2.3).
Now, on the top right hand corner of this graph, you’ll see the big $ sign. This is where you want to take your client. This is where you can provide them the most value — and also charge them the most.
For dentists, this is usually cosmetic surgery. For my company, it’s going into your
business to build out your sales funnels, set up your backend systems, and generate leads
for you. We currently charge our clients one hundred thousand dollars plus 10% of their
profits (up to one million) to provide this service for them. So the total cost to my clients
is a million dollars for this service. But it’s the BEST thing I can provide them, and it gives me the ability to serve them at the highest level.
Now, ideally we would like to sell everyone our best thing, right? You want to serve your customers in the highest way possible. But the sad truth is that if I were to walk up to you on the street and say, “Give me a million dollars, and I’ll help you to grow your company,” you would either laugh in my face or run away, thinking I was insane.
Why is that?
It’s because we just met, and so far, I haven’t provided you any value.
But if you came to my website and saw that I was giving away a free book with 108 of my BEST split tests and all you had to do was cover the $9.95 shipping, do you think that you’d order it?
If you’re in my target audience you would—because the price is low, and you have a chance to receive some value in a non-threatening way, allowing you to see if you like the experience. Just like I did with the dentist.
Now, if you order that book from me and receive value from it, you will naturally want more. You’ll want to ascend my Value Ladder (fig. 2.3a) and see if there are other ways I can provide value for you.
You may buy one of my home study courses or attend one of my live events. If you receive value from that, then you may decide to sign up for my $10,000 Ignite program, or maybe my $25,000 Inner Circle program. And if I provide awesome value there, then you will naturally want to keep ascending … and THAT is how we sell our million-dollar packages. We provide insane amounts of value at each step of our Value Ladder, so our clients naturally want to ascend, get more value, and pay us more money.
Oh yeah, and just like the dentist, no Value Ladder is complete without a good continuity program. There are many ways to structure your continuity program. It could be organized around software, membership sites, or ongoing coaching, but it should be something you can bill for each month. That residual income will become the lifeblood of your business. For my DotComSecrets business, our main continuity program is our software ClickFunnels, which allows people to create sales funnels with the click of a mouse. Our clients pay us monthly to use this software to help run their businesses. It saves them a ton of time and money and provides us with residual income. Win-Win.
WHAT DOES YOUR VALUE LADDER LOOK LIKE?
Now I’m aware that everyone reading this has a different type of company. At this point,
you’re probably trying to figure out how the Value Ladder applies to your business. I want
to share with you a story that will show you how we were able to create a Value Ladder
for a business that doesn’t seem to have any type of ascending products or services.
I have a chiropractor friend, Dr. Chad Woolner, whom I’ve known for a long time. In
fact, it was his urging that got me to create this book. Like most chiropractors, he makes
his living doing adjustments for about fifty dollars each. He runs ads, patients come in, get
adjusted in about ten minutes, pay him fifty dollars, and leave. Sometimes, if the person
has a more serious condition, Chad may put the client on a continuity plan and have them
come in a few times a week over the next few months. But that’s about it.
One day my friend and I were talking. He wanted to know what I would do differently
in his business if I were him. I thought it over for a few days, when a funny thing
happened. At the time, I was working with a group of wrestlers who were training for the
Olympics. Each week a chiropractor came in and adjusted all of the wrestlers. One week,
the regular doc couldn’t make it in. So, instead of waiting for a week, one of the athletes
jumped on YouTube, typed in “how to give a chiropractic adjustment,” and watched a few
videos until he felt like an expert. Then he walked into the other room and quickly
adjusted everyone on the team.
Now, before I move on, I feel like I should give a disclaimer or a warning or
something. Don’t get me wrong. The point of this story is NOT to say you should go
watch YouTube videos and then start practicing medicine! (And no emails telling me
that’s illegal or crazy … okay?) The point is that in about thirty minutes, someone with no
formal training at all learned to do what we were paying the chiropractor for. I started
laughing, called my chiropractor friend immediately, and told him the story.
Naturally, he wasn’t as amused as I was. He launched into a long rant about why that
was dangerous and why we shouldn’t have done it. Then I stopped him and said, “Look, I
wasn’t just calling to be a jerk. I want to teach you something really powerful. You went to
college for years to learn how to be a chiropractor—yet, within thirty minutes, one
wrestler was able to learn EVERYTHING that you currently do in your clinic.”
“I’m curious, while you were going to school, did you learn anything else besides
Defensively, he started to tell me about all sorts of other things he had learned and
knew how to do.
“I spent years learning nutrition and natural healing. I can help stop fibromyalgia,
carpal tunnel syndrome, and …”
And that’s where I stopped him …
“Have you ever provided ANY of these services to your clients? Or do you stop giving them value after the fifty dollar adjustments?”
Now I want to pause here, because most companies I work with, even if they think
they have a Value Ladder, really only have part of one. Almost always, I spend my time
working with them on adding products and services to the front of their Value Ladders, as
well as the back.
After that discussion, I sat down with my friend and we mapped out his current Value
Ladder. It looked kind of like this (fig. 2.4):
Then we looked at other ways he could provide more value to his clients. We figured
out where he really wanted to take them. Ultimately, he created a new wellness program,
for which he could charge five thousand dollars. The clients who participated would get
ten times more value from each visit to his clinic. That was the backend—the highest
point—of his ladder.
Then, after we built out my friend’s backend Value Ladder, we still had to find an
attractive front-end offer to get people through the door. A chiropractic adjustment just isn’t
that sexy. It’s not like a massage that people enjoy getting, and it’s not like going to a
traditional medical doctor where you think you’re going to die and need some medicine
fast. People usually wait until they’re in great pain before they’ll come in for an
adjustment. Chiropractic adjustments just aren’t that exciting. If you have a blah frontend
offer, your business will always struggle.
We sat down, thought through his business, and decided that a massage would be a
good thing to offer as the frontend of his Value Ladder. People love getting massages, and
it’s bait he could use to get people into his clinic.
Now he has two full-time massage therapists who give free massages to get people in
the door. And just like my dentist sells teeth whitening and retainers, these therapists are
trained to feel when a person’s spine or ribs are out of place and might need an
adjustment. Then they upgrade the client to the adjustments and then to the wellness
programs (fig. 2.5).
You might be selling a book right now on the frontend and have no idea how to build
up a backend Value Ladder. Well, what other value can you provide to people? Can you be
more hands-on with them? Can you offer more personal attention? Can you provide
ancillary services or physical products that enhance your primary offer? My very first
information product was a DVD on how to build a potato gun. (And that just goes to show
you can sell anything online!) But I figured out how to build a Value Ladder by also
selling “Do It Yourself” plans and physical potato guns to our customers.
The Value Ladder is the key to building your marketing funnels and mastering
everything else I’m going to teach you in this book. This system does not work if all you
have is one thing—like a book or an adjustment. You need to be able to build out a full
Value Ladder. Most businesses I look at have one or two pieces of the ladder, but they
rarely have all four. Once we add in the missing pieces, the business can start to expand
dramatically. There’s no end to the level of backend services and experiences you can add.
If you keep providing more and more value, people will spend more and more money to
keep working with you.
I remember paying twenty-five thousand dollars to be a part of the Bill Glazer/Dan
Kennedy Titanium Mastermind program. At the time, my highest backend offer was five
thousand dollars. Someone in that program asked me, “So, Russell, what do you sell next
to the people who paid five thousand?” I told him that I didn’t have anything else to offer,
and he responded, “Russell, that’s a five thousand dollar buyer lead— you need to sell
them something else!”
Interestingly, later that night the group (yes, the SAME group that had already paid
twenty-five thousand to be in the room) was offered a chance to be in the movie
Phenomenon with Dan Kennedy for an additional thirty thousand. And nine out of
eighteen people in our group bought the offer! That was when I realized that there really is
no end to your Value Ladder. It’s one of the reasons why we created our million-dollar program. Imagine my shock and excitement the first time someone said yes! A percentage of your audience will always want to pay you the premium to get more value.
The only limit to your value offerings is your imagination. Keep thinking of higher and higher levels of service, and you can keep charging more and more money. There’s always something else you can offer.
WHAT IF I DON’T HAVE A VALUE LADDER?
Often times, it’s hard for companies to figure out how to add more offers to their Value
Ladders. Typically, the process is very easy for someone selling information products because that ascension path has already been created and proven in thousands of different information-based companies. But what if you’re selling something else? What if you offer physical products, ecommerce, B2B services, or professional services where the path
isn’t quite as clear? Sometimes it takes a little thought and creativity.
If you already have a product or a service that you sell in the middle of your ladder,
what type of “bait” could you create to attract your dream customer? I have a friend who
owns a company that makes custom suits for people. He was stuck selling a high-end
service but unable to see how to construct a solid Value Ladder (probably because the
“front” at the time was two thousand dollars). After a while, my friend tried giving away
free cufflinks online. He put the offer up, started to advertise, and within days, he had
generated hundreds of perfectly qualified leads. He then took those people through an
ascension plan to get them to purchase their own custom suits.
Often times, companies have a front-end product but nothing more to sell on the
backend. For that, I love to look at what else they could bundle together. Could they offer
a coaching program? How about a live event? What other results or value could they give
I told you earlier that FitLife.tv’s core issue was not a traffic or conversion problem.
The only real problem was that they had no Value Ladder. Because of that, they couldn’t
build out a true sales funnel. They brought people into their funnel, but then the
relationship ended. People wanted to give them money, but there was no clear path for
them to follow. As soon as they added those things into their business, customers naturally
started to ascend the ladder, ultimately paying Drew and his team what they were worth.
While it’s not always obvious what you can add to the frontend or the backend of
your company, I promise that the solutions are there. I also know that if you want to
succeed and beat out your competition, you need to have this Value Ladder in place.
Up Next: In the next chapter, we are going to talk about the basics of building out
your sales funnel. But please take the time to fill out your own Value Ladder. Again,
unless you have a complete Value Ladder, it’s impossible to build out an effective sales
The Secret Formula was created to help you figure out who you want to serve, how to find
them, what kind of bait you should use to attract them, and where you want to take them.
The Value Ladder was created to help you figure out what products and services you
need to add so that your dream clients move from your bait to your high-end services.
Now it’s time to bridge the gap between a Value Ladder and a sales funnel. In sections
3 and 4 of this book, we will go into a lot of detail about the strategy, psychology, and
tactics you need to build out your own sales funnels. But first, I need you to understand
what a sales funnel is and how that relates to everything we’ve discussed so far. This
section is short, but critical to your success.
In a perfect world, I would immediately be able to talk my dream client into
purchasing my best, most expensive service. But as we discussed in the last chapter, that’s
almost impossible because I haven’t provided value yet. Besides, my highest-level service
might not be the best fit for all people. It’s almost impossible to build a company just
offering your high-end services. You need a full range of offers. So instead of trying to
convince someone to buy the most expensive offering right away, we build a funnel that
will help us to do two things:
Provide value to each customer at the unique level of service that he or she can afford.
Make money and be profitable while identifying our dream clients who can afford our highest offer.
The best way to show you how this works is to draw a funnel:
Above the funnel is a cloud that represents all of my potential customers. At the top
of my funnel is the “bait” that will attract my dream customers. Notice that this bait is also
the first rung of the Value Ladder. As I start to place ads featuring my bait, potential
customers will start raising their hands, and a certain percentage of those people will
purchase my frontend offer.
Then I will move to the next step in my funnel. Here I will introduce the next product
or service in my Value Ladder. This will, of course, be something offering MORE value,
while also costing more money. Unfortunately, not everyone who purchases my bait will
also purchase this more expensive, high-value product, but a certain percentage of those
From there, I move deeper into the funnel and introduce the next product or service
on my Value Ladder. Again, not everyone will buy this product, but a percentage of the
clients who initially took the bait will. I will continue to do this through all the levels of
my Value Ladder, and at the bottom of this funnel, a handful of people will appear who
can afford—and may be willing to purchase—my high-end services. These are my dream
clients, the ones I want to work with at a more intimate level.
Now, before I “sell” you on why you need to be thinking about your company in
terms of “funnels,” I want you to understand that my approach wasn’t always this detailed.
When I first got started online over a decade ago, there was a lot less competition. I could
have just a frontend product, and I’d spend a dollar on ads and make two dollars back in
return. But as more people started businesses online and competition started to grow, ad
costs went up, the consumer’s buying resistance also went up, and it got harder to sell.
People I know who were making millions of dollars a year are no longer in business
because they didn’t adapt and change with the times.
When I started to feel the pinch, I was lucky enough to have some amazing mentors
who taught me the importance of building a deeper funnel with more offerings. The
deeper your funnel is, and the more things you can offer your clients, the more each
customer will be worth to you. And the more they are worth to you, the more you can
spend to acquire them. Remember this truth:
“Ultimately, the business that can spend the most to acquire a customer wins.”
Every product I sell online has a sales funnel that I take people through. In fact,
immediately after the customer buys something, they are offered an upsell or two before
they even leave the page. This is one type of sales funnel. But after they have purchased
something from me, I use other types of communication funnels to build a relationship and
encourage them to purchase other products and services that we sell. You’ll learn about
these special communication funnels in Section 2. Every product we sell has its own sales
funnel to provide value and convert the buyer into a higher-end customer. You’ll see all
seven of these funnels in Section 4.
The fact that you picked up this book and are reading it now is proof that this concept
works. I already know that a percentage of everyone who buys this book will upgrade to
one of my online web classes. I also know that from there, a percentage of those people
will upgrade to my Ignite program or my Inner Circle program. And a few, the ones who
are the right fit, will join my million-dollar program, and I’ll be coming out to set up this
whole system in their offices.
Let’s Review: So a sales funnel is just the online process you take someone through
to get them to ascend through the different levels of your Value Ladder. It’s the actual
webpages that will make the Secret Formula work. The Secret Formula will help you find
your dream customer, offer them your bait, and lead them to where you want them to go—
all while providing the customer value and making you money.
Up Next: So, the next logical question, after you understand the concept behind the
sales funnel, is WHERE do you find the people to put into that sales funnel? Secret #4 will
present three simple questions to help you find your dream clients and bring them to your
websites— with credit cards in hand.