Quite often, merchants use such well-known marketing techniques as cross-selling and upselling to boost sales and revenue. They are extremely effective and beneficial. But there are exceptions when these methods don’t work. It cuts across budget-conscious buyers. Such customers prefer to choose more budget-friendly goods even when these products have fewer benefits and features. Then, it’s the right time to implement downselling.
What is downselling? What are its main advantages? How to use this technique the right way? For these and other questions regarding downselling, we’ve tried to find the answers in the article.
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What is Downselling?
Downselling is a marketing technique of offering more budget-friendly alternatives to products or services to buyers regarding their initial choice. This tactic is normally used when shoppers can’t afford or refuse to make an order. Due to downselling you may suggest your consumers a solution that will fulfill their needs and expectations.
Downselling is the surest way to close a deal even when a shopper can’t afford to buy a premium product. Even though it seems like a loss, it’s still an opportunity to make a sale. When you provide your buyers with low-priced alternatives, it helps you build brand loyalty, as well as show care about your consumers, their budget constraints, and their purchasing power.
Downselling vs. Upselling
Now, let’s define how downselling differs from upselling.
Upselling seems to be the surest way to give your consumers more value and increase the average order value of your store. With the help of this marketing tactic, you can entice customers to spend more by buying a premium version of the original product or service. When upselling, it’s crucial to make relevant suggestions to customers’ needs and the goods they intended to buy first.
Conversely, not all the customers can afford premium goods. For buyers, who don’t want extra features or have limited budgets, less expensive items may seem like a better value. Thus, offering cheaper products and services can be more profitable for retailers as it helps expand customer base. When upselling, you have to convince consumers that the better value is more important than price. When downselling, on the contrary, you pay buyers’ attention to more loyal prices.
Pros and Cons of Downselling
As well as any other sale technique, downselling has its strengths and weaknesses.
- Not having an opportunity to buy premium products, shoppers still buy something even of low-price.
- Merchants get some return for sales efforts.
- It’s a good chance to build brand loyalty.
- Downselling is the surest way to gain more consumers with varying budgets.
- Customers get a good experience with your brand thanks to downselling.
- Buyers are more likely to make higher-priced purchases from your store in the future as they feel satisfied.
- When consumers have decided not to buy some product and you continue to hold them up and make another offer, it might be annoying.
- Downselling can encourage bad buying behaviour. If you make a ‘better offer’ every time customers decide not to buy the original offer, then shoppers will always refuse to purchase more expensive goods.
Art of Downselling
Downselling is a great sales tactic. When implementing it in your online store, the very first thing to do is to consider your customers’ needs. You should remember that even if you offer lower-priced products to your buyers they still should meet customers’ interests and have any value. Otherwise, such offers will be hardly successful. Thus, you should select your downsell wisely.
You can downsell in one of the following ways:
- suggest a different and lower-priced product after a buyer rejects the first upsell;
- offer the same product at a slightly lower price with bonuses.
A great opportunity for downselling is to provide customers with sample or trial offers as a lot of consumers want to ‘try it out’ first. But you shouldn’t look at this strategy as last-minute desperation to get something of a buyer. Take it as a chance to bring new customers who are likely to return.
Ideas to Increase Downselling
Most merchants mistakenly diminish the meaning of this sale technique, as they have never seen examples of downselling applied in real life. Here are a few ideas to increase it.
Use Exit-Intent Pop-Ups
When your customers are about to leave your website, make use of exit-intent pop-ups with attractive offers enticing them to stay longer. It can be a discount, free shipping option, or something else.
When using such pop-ups, you are free to choose, which buyers see the discount, instead of giving it to all the visitors to your store. Thus, you’ll target only shoppers who are going to leave your site, hoping to convert them into paying buyers.
Offers of exit-intent pop-ups can be customized according to your customers’ needs. Before implementing them, make sure your customers are interested in the product. You can do it by analyzing their activity on your website.
Create a Value Package
Another way to use downselling is to create a package for a lower price than existing ones. You can make these packages budget-friendly by removing certain features. For example, Business Growth Dynamics implemented such a downsell program in their coaching division. As a result, their sales conversion rate increased by 125% in the first month.
If you don’t want too many customers to make use of such packages, on the pricing page, you can recommend high-revenue packages first or suggest them as ‘best deals’ and offer low-cost ones as another option.
Send Cart Abandonment Emails
According to a study conducted by Baymard Institute, the average online shopping cart abandonment rate is 69.57%. Why does it happen? For 56% of buyers, the main reason is unexpected costs. For 36%, it’s an opportunity to make purchases cheaper somewhere else. For 32% of customers, too expensive overall prices are a reason to abandon their shopping carts.
As you can see, it’s all about pricing. In this case, downselling is the best technique to turn abandoned carts into actual purchases. One of the ways is to send out cart abandonment emails when customers have already exited the page and don’t show any sign of coming back to complete the purchase. In your emails remind buyers about items left in the cart and provide them with a time-limited exclusive discount, or make any other special offer.
Offer Multiple Buying Choices
Suggesting multiple buying choices for the same products is also a great way to downsell. You should highlight items giving the highest revenue not forgetting about providing budget-friendly options. Even though some buyers may not even look at the other options when they intend to make a purchase anyway and choose the highlighted high-revenue options, there are still budget-conscious customers. Thus, your chances to make a sale increase.
Amazon is the best example of downselling. With appropriate product recommendations, the company improves the chances of making more sales. Thus, in its book section, customers can find various versions of the same book getting more buying choices.
What to Avoid When Downselling?
Now, you know how effective downselling can be and ways to increase it. But there are still some things you should avoid when applying this technique in your marketing strategy:
- Downselling is rather risky if you overdo it. Offering discounts to your customers every time they abandon the shopping carts can lead to undervaluing goods by shoppers.
- Targeting every buyer is also a mistake. You should focus on customers who are seriously interested in making a purchase. Remember that downselling to potential buyers is more profitable than to every visitor of your store.
- Don’t be too annoying as it might seem desperate. You may lose a consumer who could become your potential buyer and encourage bad buying behavior. Thus, your downselling must be perceived as offering value to the prospect.
- The use of this technique at an inappropriate time may lead to objections to confirm the original sale.
In spite of the fact that downselling doesn’t allow selling more products at one time or for a higher price, it’s still an effective technique for increasing conversions and sales. Applying it in the right way and time can bear fruit undoubtedly. For easier implementation in your Shopify store, make use of the Cross-sell & Upsell Suite plugin by Mageworx.