How To Get The Diamonds In The Vault: Cracking The 5 Levels Of Market Sophistication

This post reveals one of the biggest critical factors to your success with your marketing.

And it’s only going to get more and more important to master the 5 levels of market sophistication.

The 5 Levels Of A Market

Before you start doing any marketing, you should be fully aware of the market sophistication that you’re going into.

Eugene Schwarz was the first to reveal this key concept in his amazing book: Breakthrough Advertising.

There are five levels of maturity to every market.

If you understand the five levels and analyze where a market is at, you’ll be able to go in, adapt your marketing to that level or to a level beyond and out-compete other companies. 

Here’s a cheesy metaphor: Lord Garland Jenkins The Great wants to give away his vast fortune.

The Epic Lord possesses a 5-story castle with 5 vaults – one for each floor.  And each floor offers even more amazing wealth and riches than the previous one.

On the first floor, there’s some copper pennies.  On the second floor, there’s some nickel coins.  On the 3rd floor, there’s some silver bars.  On the 4th floor, there’s gold.  And the 5th floor is filled with diamonds, and the greatest jewels the world has ever seen.

Lord Jenkins offers an open challenge to everyone: “The first person who cracks the lock of a door can get the Lion’s share of the treasure on that floor.”

There are 2 caveats:

  1. You have to beat everybody else to the punch.
  2. You have to know how to pick the lock on the door.  As you move up to the next floor, each lock is more and more complex.

The castle is the market you’re in and the locks are inside your prospects’ minds.

As the market evolves, your prospects keep adding stronger locks.  As the defensive walls in the prospects’ mind get higher, you need some better tools and strategies to get inside.

Here are the 5 levels of a market:

  • Level 1: Birth of market: Just make any claim.
  • Level 2: Make the claim bigger than your competition.
  • Level 3: Introduce a mechanism that offers a logical reason why your claim is achievable.
  • Level 4: Create a better mechanism, or an upgraded version of the previous mechanism.
  • Level 5: Because the market’s skepticism is at it’s highest, they may no longer believe in mechanisms.

So, you need ‘level 5’ marketing strategies that penetrate or go through the back door of the prospects’ minds.

Match Your Marketing With The Level of The Market

In this diagram, you can see that the level of market sophistication goes up over time. This happens when more and more competitors enter into a market.

This REALLY SPEEDS UP when scam artists come into a market. The scam artists hurt everyone, and the prospect then becomes a jaded skeptic — UNTIL something on the next level of marketing power comes along and hits them.

Level 1: Just make any claim

So, let’s just take, for example, the self-defence market.  Let’s market, a DVD product, and your headline or lead-in would be, “Win street fights”. If you’re the first person to get in the market, you don’t need to have big claims. You just need to say “win street fights”.

Here’s another example if you’re in the “dog training” market.  A level 1 claim could be: “Train your dog to do 25 tricks.”

Now, as the competition starts coming in, people become more selective with their purchases.  So the market then evolves to…

Level 2: Expansion of the claim

Competition naturally evolves in business and this includes marketing.  So if you’re a smart marketer and you want to get into a market you need to expand the claims being made in level 1.

In the self-defence market, it might be “Beat bigger, tougher men without years of training”.  So, that’s an expansion of the claim.  The first claim was “win street fights”, but now you’re saying “you can beat bigger, tougher guys without years of training”.

In the dog training market, that could be, “Train your dog to do 25 tricks in 7 days.”  The expansion here is “7 days”.

Most novice copywriters create level 1 and level 2 headlines. So, as more competition comes in, and your prospects get bombarded with lots of marketing messages. The claims get less and less believable.  And their attention-grabbing powers dwindle to zero.

Only in NEW untapped markets, can you use level 2 headlines.  However, those are very rare in today’s hyper-competitive online space.

In order to create effective marketing, the lowest level you should aim for is level 3 marketing.  This is where you can separate yourself from the crowd.

Level 3: Introducing the Mechanism

What is a mechanism?  A mechanism can be: a device, a process, a strategy, a new invention, a tool, software, or even a simple concept.

A mechanism INSTANTLY adds a new level of credibility and believability to what you’re doing.  Why?  It’s because there’s “something” behind the claim.  It gives the prospect the “reason why”.

And remember this:  you always want to back up EVERY claim with a “reason why”.  You must satisfy people’s need for logical explanations to resolve their objections and move them forward towards the sale.

Here’s an example:  You could say “New Lean Hybrid Muscle helps you build muscle and burn fat at the same time.”  What’s the mechanism here?  It’s the new hybrid training method that combines: powerlifting, bodybuilding and strongman style.

Let’s examine the “dog training” market… You could say, “New clicker system can train your dog overnight.”  The mechanism is “clicker system”.

At this point, the market is in a “mechanism war”.  People become more selective about which mechanisms they believe in and want to give a chance to.

So, as the Lord Harlan Jenkins adds another locking device on the door we move up to…

Level 4: Expansion of the Mechanism

At this point, the STRONGEST MECHANISM will win.

Just like the claims expanded from level 1 to level 2, the same thing happens here.  The defensive walls inside the markets head become tougher and tougher.

Sticking with the self-defence example, we could say, “New Russian nervous system technology, downloads ten years of black belt training into your body almost overnight.”

The expansion is going from a “new fighting system” to a “Russian nervous system technology”.  There’s a powerful level of intrigue that comes with a level 4 claim especially if somebody has been exposed to level 3 or level 2.

My level of success will depend on how solid my explanations, science, and logic flow are for the “Russian nervous system technology”.

Coming up with a sexy title isn’t enough (although it’s important).

NEVER FORGET:  Most of your prospects have a VERY effective B.S. detection system and it’s just getting better and better.

People’s B.S. detection system for claims and mechanisms is always improving.   As people buy an ineffective product and fail — their distrust grows.

In the dog training market, a level 4 claim could be, “New European Clicker Method Guarantees To Train Your Dog in 48 Hours.”

The mechanism evolved from a simple “Clicker method” to an “advanced European clicker method”.  If I’ve already heard about a “clicker method”, I’ll be very interested in hearing what is the “new European clicker method” is all about. People will be like “Wow, well that sounds interesting.”

Introducing NEW mechanisms into a market is a solid level 4 strategy.

Key Point

The key is to create rock-solid mechanisms.  You should always be power-thinking the strongest mechanisms possible, BEFORE you even start creating your product.


By having your marketing cap on as you create your product, you’ll automatically have much stronger products that can really deliver on the promise.

However, in the toughest of markets level 4 will not succeed.   Eventually, there’s a flood of mechanisms.  The market becomes jaded.  This is when a market reaches peak maturity.

This is where you must “evolve or perish”.

Only the marketers that evolve into something new can pick the level 5 locks and enter.

Level 5: Profound Connection

VERY, VERY FEW marketers and companies have any clue about how to do Level 5 Marketing.

And the majority of the ones that do, do it unconsciously.  It’s usually by accident.

In the last few years, I’ve developed and tested several Level 5 marketing strategies that has kept us on top of some of the most competitive markets online.

I’ll be sharing these at the Hyper-Growth Workshop.

If you’re in a competitive market and your business has been going down or you’re worried about it going down, then this event is for you.

If you’re interested, just enter your name and email in the box below.

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Meet the Author

Matt Gallant

Matt Gallant is a serial entrepreneur who's collected over 7 million leads in various industries, scientifically tested well over 10,000 different marketing ideas, generate tens of millions of dollars online and built his dream international lifestyle. Matt currently resides in Panama with his beautiful wife.

1 comment… add one
  • Lou Mar 4, 2017, 11:00 pm


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