7 Reasons Why Online Startups Fail
# 2 - Value Ladders & Offers

Most startups or businesses that expand online fail because they have no Value Ladder established or they have one but it descends to oblivion.
Written by Shawn Stone on May 10, 2017
This is where we can all learn a lesson from McDonalds. It costs McDonalds just under $2 to get you through the drive-thru so they break even on the hamburger and soda but the fries are all profit. They begin to upsell you from there and McDonald’s incredible success has largely been based on this approach and their incredible marketing because their food is not very good.

The other day my wife and teenage son were talking about and anticipating the Apple Iphone8 scheduled to be released in a few months. They both have the I7 phone but they’re already talking about the I8. If you have a blue ocean market like Apple, you don’t need a complex value ladder. Apple’s strategy now…Just keep putting good products out there and people will buy them.

But you and I are not Apple.

We need a value ladder with incentives on the front end. Successful businesses online understand that to develop long term success, they must engineer a value ladder that probably breaks-even on the front end and makes profit on the back-end as their customer’s move up their value ladder of products and services.

This is hard for most businesses and entrepreneurs to grasp and then execute.
One of the main reasons that online businesses fail is their inability to monetize properly along the steps in their sales funnel. They never got the front-end right, so they couldn’t produce any back-end profit. Many times, they don’t even have a back-end.

I have seen numerous continuity ideas for low dollar membership services, particularly in the health-related field. 95% of them will fail because they don’t really have any value to offer up and down their funnel. Once you get the client to purchase the continuity package, if you don’t have any backend consulting or additional ways to enhance their customer experience, they will drop out and your profit won’t even cover your advertising costs to deal with the attrition rate.

Solution:

Start looking at your front-end offers as the price of doing business and getting new customers. The person that spends the most money on the front-end usually wins. Shift your thinking towards building a multi-step value ladder. This may take some time to fully develop.

Do you sell a physical product? How about doing a FREE +Shipping with one of your more valued products? Or doing the same with another company’s product to enhance your offer.

How about a free trial of your services for 2-4 weeks or a Free Book Offer?
What about a Free Video Webinar with really good content?

If you own a services or content publishing company you can do the same. Get creative and find out what your customers’ really want…not necessarily what they need.

Give your subscribers and customers personal and emotional value upfront and they will buy from you again further down your funnel.

Next Up: Dazed & Confused Traffic 

About Funnel Rush: 

Founded by a former Business Development Executive for a Fortune 50 company, now full time as an e-commerce business owner and consultant. He specializes in building sales funnels for small businesses and online startups. In addition to several of his own businesses where he puts his funnel building skills to use, he founded Funnel Rush as a creative outlet to share his experiences to the greater online marketing community. When he is not funnel building, he prefers to spend his time with his wife and two boys....fishing, hunting, and in the great outdoors and in fellowship with his church.  
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