Four step product ladder
Reduce risk to increase engagement
In Britain, through much of the nineteenth century, cargo ships were habitually overloaded. Ship owners maximised their profits via this practice. However, this resulted in the death of many sailors with one in five drowning. Sailors, referred to the most overloaded as coffin ships, but they were legally obliged to work on them. In 1871, 856 ships sank just off the coast of Britain and nearly 2,000 sailors drowned. Few in power cared, but Samuel Plimsol did. In Parliament, where many MPs were ship owners, he fought for a safe loading line on all ships to be passed into law. Eventually, after twenty years of fighting, Plimsoll won. Today every ship must have a clearly visible safe-loading line painted on the hull. It's called The Plimsoll Line.
The product ladder
Products and services don’t make money. Product and service ecosystems do. - Daniel Priestley
Humans are creatures of habit and it takes a lot to get us to adopt new things. Change involves unknowns which is uncomfortable. For potential customers to purchase our products, likewise, involves risk. The smaller we make the perceived risk, the more likely people will engage, try and then buy. The product ladder steps customers through four products with increasing levels of engagement and value:
Gifts: Given away for free without expecting anything in return.
Product for prospects: For people who want to try us out with minimal commitment.
Core product: Solves customer problems in a remarkable way. Generates profits.
Value add products: A follow on to the core product. Highly profitable.
1. Gifts
I've found that giving gifts is transformative. It makes me better. It clarifies my thinking and allows me to do better work. - Seth Godin
Gifts are free products that we give away without expecting anything in return. They are thoughtful and valuable. They can be inspiring when given to the right person, at the right time. Your gift should entice people to want to know more about what you do and the value you could offer them. I share this weekly A Bit Gamey blog for free without expectation of anything in return. I hope it provides an interesting perspective on the world and sparks ideas.
2. Product for prospects
Product for prospects (PFP) are for people who want to explore what we offer without committing much time or money. It offers greater insight of potential things to come. PFPs are low-cost, high-value offerings that are designed to attract and engage potential customers. They serve as a way to demonstrate your expertise, build trust and generate leads. PFPs are exchanged for contact details. Examples include short training webinars, cheatsheets and on-line questionnaires which point to problem solutions. I plan to self publish a book, many copies of which I will give away.
3. Core product
The best products are those that make people say, Wow, how did I ever live without this? - Steve Jobs
Core products are the ones we want to be known for and are priced to make a profit. They are the main things we and our customers focus on. Core products solve our target customers’ problems in a remarkable way. We strive for them to be market leading. Websites and other brand resources must reflect the quality of our products. Apple’s core product is the iPhone. Google’s is search. My core products are apps, e.g. Scarper (a game) and Nip To (utility finder).
4. Value add products
Live in the future then build what's missing. - Paul Graham
Our core product should be so compelling that customers want more from us. Value Add Products are sold as a follow on to our core product. They are highly profitable, partly due to the fact that the cost of acquiring the customer has been covered. Such products provide the potential for longer term success. A garage that sells cars, their core product, have value add products such as financing, alloy wheels, sound systems and other add-ons.
Other resources
How to Use a Value Ladder talk by Josh Spector
How to Create a Hit Product post by Phil Martin
Our Product Led Growth post by Phil Martin
I think Seth Godin sums up the purpose of products perfectly. Don’t find customers for your products, find products for your customers.
Have fun.
Phil…
