The Three Income Tiers of Successful Side-Hustles

The side-hustle value ladder
The side-hustle value-ladder

Three Income Tiers of Successful Side-Hustles

As a side-hustling entrepreneur, it can feel like you’re not accomplishing much some days. Maybe you get a bunch of new customers, but sales fall flat a few days later. Perhaps you check your growth at the end of the year. This year did about the same as the year prior.

Well, there’s a way out of the slump.

Many entrepreneurs think all they need to do is add more customers to the issue. But adding new customers is expensive and time-consuming.

Maybe you think you need more entry-level products.

Many side-hustlers get nervous about asking for too much money, so they create a steady-stream of low-cost options, but need to sell hundreds (or thousands) to earn a decent living.

What if you only had to make one sale to earn a year’s income?

While we should always work to add new customers to our pipeline, your existing customers can be worth much more than you think. Using the value ladder strategy, we’ll get you a product level for each step of your customer’s buying cycle.

There are only three ways to grow a business:

  1. Get more customers (the most-expensive route)
  2. Increase the dollar amount of each order
  3. Sell more to your existing customers

We’ll focus on the last two methods. In a minute, I’ll show you the ‘value ladder’ strategy you can apply to your side-hustle.

This method will help you earn more from your existing customers. Not only will you serve them better, but you’ll grow your business in the process–all without having to spend a lot of money adding new customers to your pipeline.

The Side-Hustle Value Ladder

I got the ‘value ladder’ expression from master marketer, Russel Brunson. Russel explained it best when he shared the three different tiers with which we can serve our customers:

  1. Do it yourself
  2. Do it with help
  3. Do it for you

Each of the rungs on the value ladder result in a large boost in income.

The Do it Yourself Level:

This level represents entry-level products: books, kits, inexpensive courses, and videos. This is the level where we earn the trust of our customers.

Most of these products cost less than $100.

We provide the recipe, the kit, or the road map. The customer provides all the work. There’s little to no help or feedback given. The teaching is all one direction. I sell you a book. You read it and follow the advice on your own time.

The do-it-yourself level is a great way to start your side-hustle. You create a product once and sell it repeatedly. The customer doesn’t have to make a big purchase decision. If you can prove you’ve got a solution to her problem, these low-cost products are fairly easy to sell.

The downside is, most of these products go unused.

The customer purchases your product with good intentions, but without a mentor or coach in place, much of this content goes unused.

The Do it With Help Level:

This is the second level of your value ladder. Here, you’ll create a higher-end course, or subscription model. Maybe a mastermind group.

The customer has the ability to ask for direct feedback, either from the group, or the entrepreneur directly.

These mid-level programs can cost $500-10,000, depending on the income level of your market.

The ‘do it with help’ level will require more hands-on commitment from you. Depending on the way you structure this second tier, the number of customers you can serve at a time, will be limited.

When you create a product at the second level, start with the end in mind. Understand how many people you can realistically serve at this level and plan your pricing accordingly.

If you open a mastermind group, but you can only serve 10 people per month, you’ll want to make sure the monthly investment is worth your time. Your market will determine your pricing, but this middle-tier is not the place to compete for a good discount.

The Do it For You Level:

This third level is the Cadillac of your value ladder. The customer is almost completely hands-off, save for some basic decisions.

She pays you.

You do all the work and deliver the desired result.

Whether it’s building an entire email marketing platform and campaign from scratch, designing software, or building a brand–if you’ve got a product at this level, we’re talking $20K and up.

The customer is trading her money for the opportunity to save time.

We all get the same 24 hours in a day. High-earning clients know the value of time more than anyone. If you can prove you’ve got the answer to her most-pressing problem, and you can provide a done-for-you solution–you’ll get the work.

Every Customer is in a Different Place

A big mistake entrepreneurs make is assuming where your customer is along the value ladder.

Some customers may not have the money to invest in your high-dollar products, but they do have time. These folks will choose the DIY approach.

Other customers may not have a lot of time, but they’ve got the money. These folks don’t mind a little work, so they choose the ‘do it with help’ level.

The final group of customers has plenty of money and zero time. They want the problem solved now and they’re willing to pay dearly for it. This is the most time-consuming level, but by-far the most-lucrative.

The point is, you won’t always know where you customer is along the value ladder.

Not everyone climbs the steps in order.

Some might skip to the top, while other customers need to develop a trusting relationship with you before they’re willing to write you a check for six-figures.

When we provide a solution at each price-point, we cover our customer along each step of the ladder.

This is how we keep customers for life. And the reason we can increase the lifetime value of each customer. If all we do is provide do-it-yourself products, we might lose many opportunities to serve high-level customers.

If you want to grow your side-hustle to a full-hustle, you need to map your value ladder. Each tier serves your customer in a different place in her life. She might not have time to read your $5 book, but she’s got an extra $25,000 she’d be happy to give you for an entire marketing plan.

Don’t assume your non-buying customers don’t want your work.

It might be a case that you have yet to create an offer for their position along the value ladder.

Now, you don’t have to wait to start your business before you have all the levels covered. You’d never open your doors. Instead, open your business with the entry product. Continue to serve your customers by offering them a steady stream of increasing value over-time.

The Value Ladder Starts with Free Content

Whether you provide free articles, video, or audio–most customers enter our tribe through our free content.

Our free content builds our trust and credibility before we ask for the sale.

If your free content provides enough value, the customer may ask “if this free stuff is this good, the paid stuff must be amazing!”

Not only do we create trust and value with our free content, but we also use it to build our tribe. We want the ability to contact our customers directly, in a measured way. For this, we’ll use email.

Email is the most-lucrative app in your pocket.

Although it may not be the most-glamorous app on your phone, email is where you’ll grow your side-hustle.

At the bottom of all our content, end of each video, or in the tail of our podcasts, we’ll create a call-to-action to join our email list. When a customer joins our list, we’ll send her an automated welcome sequence that begins the sales process, working her up the value ladder.

Here, the customer will decide how she wants to invest.

Some customers will work in a linear fashion, over many years. Other customers may write a big check on the first day. They’ve got a huge problem and you have the solution.

By creating a valuable, free lead-magnet (I call these your Easy Invite) at the bottom of your content, you’ll create an irresistible, low-barrier-to-entry into your tribe.

You want the transition from prospect to lifetime customer to feel effortless.

A new customer relationship is fragile.

The more value you can deliver up-front (show people you can help them by actually helping them), the more trust you’ll earn. Eventually, convincing a certain percentage of your clients to move up the value ladder.

Each step of the process is a small hurdle for the customer.

When you make each decision a no-brainer, you’ll be that much closer to a group of high-income clients on the top rung.

When you deliver a regular email to your tribe, not only do remind them you’re still in business, ready to serve them, but you add additional reminders that you’ve got transformation solutions to improve their lives.

Email will help nudge your customers up the ladder, while you sleep (or spend time doing your work that matters most), which gives you more time to serve them better in the future.

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August Birch is an author, email expert, and entrepreneur from Michigan, USA. As a self-appointed guardian of writers and creators, August teaches indies how to make more work that sells and sell more work once it’s made. When he’s not writing or teaching, August carries a pocket knife and shaves his head with a safety razor.