Downselling

What is downselling?

Downselling is a sales tactic where you offer customers an alternative product or service that’s cheaper than the one they were initially considering. Let’s suppose you’re looking to buy a new car. You love the latest model, but the price is too high for your liking. Rather than letting you leave the showroom with nothing, the salesman directs you to a less expensive but really decent model. He’s not pushy and doesn’t interfere with your original decision, but you like his approach and decide to go with his suggestion. Downsell accepted! 

What is the difference between downselling and upselling?

Upselling is a technique where you suggest a more expensive version of a product to a customer. Downselling is used when the customer decides not to proceed with the purchase. You offer them a cheaper alternative, which improves your chances of making a sale.

Downselling is most effective when:

• The customer is about to walk away
• A product is out of their range
• The customer is hesitant to commit, such as to a time-consuming service

The ultimate goal of this approach is to acquire a customer, even though you may not profit as much right away.

Benefits of downselling

Downselling can be a great tactic for your business and help you gain customers over time. Here are its key benefits:

• Downselling allows you to place entry-level items in your product catalog. This way, you improve the customer experience for people who cannot afford to buy premium products. Later, the same audience has the potential to turn into brand loyalists and strong advocates.
• You can get better profit margins from lower-priced items (contrary to what we expect), and it will be easier to sell such items in volume, which will be more profitable. Such items can increase the footfall or website traffic and give you an edge over competitors who sell similar products.
• Downselling also creates a sense of urgency in the customer’s mind. They want to invest in the items before the prices go up. It motivates them to avail themselves of a limited-time discount and come for purchase again to your business because they feel more valued by your business.

When to downsell?

Now that you understand downselling better, it is time to talk specifically about when to downsell. It is a major pain point for many business owners, so let’s discuss this in detail.

We wish we could say that x is the right time to downsell, but this is not how it works in business. Every business has a unique program and offers. Generally, downselling is never a bad idea because it gives more opportunities for your visitors to start working together. You can achieve this in a few ways.

For example, let’s say that they are on the checkout page and decide not to buy. You can pop up the downsell offer here. Or, you can send the downsell offer at a later date with a cart abandonment email. If you had a physical launch and collected emails from attendees, you can email them later, asking why they did not buy. And then, you can give them a discount or a compelling CTA to bring them to your landing page. If the price was the biggest reason someone did not buy, the discount will bring them back and make them feel valued.