Upselling is always on marketers’ minds, and for good reason – it’s a great strategy for boosting revenue and driving profits. Did you know that the opposite tactic can be equally effective? In this article, we will answer the question “what is downselling?”.
Most importantly, we will discover four ways in which downselling is a viable alternative to boost sales and drive overall revenue.
So, stay tuned because there’s plenty of great info coming your way!
If upselling involves getting customers to spend more by purchasing more expensive items, downselling is essentially the opposite approach. In downselling, you offer customers more cost-effective alternatives.
Wait a minute, can we encourage customers to spend less?
Here’s the lowdown:
Often, customers want to make a purchase, but they can’t afford the item they want. Customers are, therefore, willing to walk away because they can’t afford or are unsure about the item they want. In short, your store loses a customer.
Downselling consists of offering a lower-tier alternative to close a sale. In other words, you give customers a lower-priced or lower-tiered option in hopes of making the sale.
Let’s consider this situation:
A customer wants to purchase a specific watch. The price tag is $1,000. The customer realizes they can’t afford this watch. Instead of letting them walk away empty-handed, you offer them a number of other less expensive alternatives. You show them similar-looking watches for half the price. In the end, the customer makes a purchase.
What’s the moral?
Even though the customer did not purchase the item they first had in mind, they nonetheless purchased because you provided a viable alternative.
Ultimately, downselling should be a part of your sales arsenal. While upselling and cross-selling are the talk of the town, you must not disregard downselling. This strategy can provide you with a great alternative. In short, downselling enables you to cover all of your bases. You can upsell, cross-sell, and downsell customers.
It’s a win-win all around!
In principle, upselling and downselling are very similar.
On one hand, upselling involves encouraging your customer to purchase an upgraded, premium, or more expensive version of a product.
When you downsell, you are also encouraging your customer to purchase a different version of a product. However, in this case, you are encouraging your customer to purchase a less expensive or more basic version.
For example, a customer is viewing a computer. Upselling would involve offering the customer a three-year warranty with their new computer, for an additional cost. On the other hand, downselling would involve instead showing the customer the same computer, but with less RAM, making it a cheaper option.
Please note that downselling should not be your main selling strategy.
Think about it. Why would you offer a lower-priced or lower-tiered alternative when a customer is willing to spend more?
Naturally, upselling and cross-selling ought to be your main strategies. Thus, downselling should be an alternative when you can’t get a customer to pull the trigger on a purchase.
Downselling is about giving customers options. Suppose a customer is simply unwilling to purchase for whatever reason. In that case, downselling is much better than merely letting them walk away.
Downselling is an effective tool when customers are willing to purchase a higher-priced item. Consider this situation:
A customer is looking for a sweater. The sales clerk shows the customer several similarly priced options. Then, the salesperson shows them a lower-priced item. The customer immediately purchases the lower-priced item.
On the surface, the salesperson did well because they closed the sale. However, the strategy was ineffective because the salesperson offered a lower-priced item too soon. As a result, they let go of a much larger sale.
In this example, the salesperson should have shown the lower-priced item if the customer was ready to walk away. In a way, downselling is a last resort. It should be a type of last-ditch effort to save a sale.
Beyond “saving” a sale, there are three powerful reasons to use downselling:
Introduce your brand. When you have a new product or brand, downselling may be a good way of getting the customer to purchase. The customer can then become familiar with the product leading to more purchases down the road.
Brand loyalty. Once customers become familiar with a product or brand, downselling can become a way of fostering brand loyalty by giving customers options to continue choosing your products.
Blocking competitors. When your customers choose competitors, particularly based on price, downselling may become a viable alternative. Downselling can become a good way of keeping customers instead of letting them go over to the competition.
On the whole, downselling is a great alternative to discounting products. In particular, downselling can help you avoid discounting your top-selling products by offering cost-effective alternatives. So, the next time you think about discounting one of your best products, consider using downselling as a tactic.
How does downselling work in practice? Let’s take a look at three great examples of downselling:
Best Buy is a renowned brand in electronics. Shoppers can find consistently good deals on some of the world’s best brands. Best Buy also gives shoppers various alternatives to these great deals. Let’s take a look at how they do it:
How does Best Buy get downselling right?
Best Buy gets it right because they offer various alternatives. In the ad above, we see an iPad retailing for $329. We can see below an open box offer for $299.
What does this mean?
It means that customers that want an iPad have a more cost-effective alternative. They can purchase an open box item for about $30 less. But there’s one key element here. The ad does not overly highlight the open box version. Doing so would draw the customer’s attention to the retail item. Nevertheless, a customer looking for a different deal can still easily spot the open box option.
Ellie is a fashion brand focused on women’s activewear. The brand gives customers full ensembles to match their fitness routines. Each ensemble comes in a full package design. Let’s take a look at how Ellie does downselling:
How does Ellie get downselling right?
Ellie gets it right because they give customers various options. First, customers can purchase the full ensemble for the regular price. However, customers can choose the top and bottom pieces for a lower price. Customers can also add items beyond the full ensemble. As you can see, Ellie downsells and upsells customers simultaneously.
How is that possible?
Upselling and downselling simultaneously is a question of giving customers choices. By having choices, customers can choose the options that suit them best. Overall, the name of the game is options. When you give your customers options, you substantially increase your chance to make sales happen.
Sandqvist is a Swedish brand that specializes in handbags. This brand combines style with functionality to produce high-quality items. In particular, this brand is great at giving customers options. Let’s take a look at how Sandqvist does it:
How does Sandqvist get downselling right?
In the picture above, we see an ad for a tote bag. It’s listed at 119 EUR. This item is currently listed at full retail price. Now, let’s take a look at the options customers get.
When customers scroll down, they see “related products.” In this section, customers can see a less expensive alternative. As you can see, Sandqvist downsells customers by allowing them to choose a more cost-effective alternative. Ultimately, the brand tries to close the sale by enticing customers to purchase.
These brands get downselling right because they offer options. Upselling, downselling, and cross-selling are all about giving customers choices. When you allow customers to choose, you increase your chances of selling.
Being restrictive, that is limiting choices, your customers may lose interest. Naturally, it’s best to avoid giving customers too many choices. Downselling can become a fantastic alternative for brands looking to boost their sales without relying too much on discounts or promotions.
There are four specific ways you can use them to boost your sales when it comes to downselling as part of your e-commerce site’s strategy. Let’s take a look:
Popups are a common tactic when customers leave a page. Generally speaking, popups display messages urging customers to complete their purchases. However, you can use popups to downsell your customers.
Consider this example:
A customer looks at an ad for a pair of jeans. As they leave the ad, a popup suggests other products such as t-shirts. The aim here is to provide your customers with a more cost-effective alternative. The popup doesn’t guarantee the sale itself.
The popups ensure that customers take another look at your products. Hopefully, you’ll pique their interest just enough. By keeping them on your site long enough, you’ll greatly improve your chances of making a sale.
In the example above, Tentree uses an exit popup to encourage their customers to stay on the site longer. They are downselling by offering 15% off for customers who leave their contact details and sign up to Tentree’s mailing list. The popup doesn’t appear until a customer attempts to exist the page, so in theory, Tentree is not missing out on full-price sales by offering this deal.
Using a classic tripwire can help you both upsell and downsell. Let’s see how it works:
A customer purchases a t-shirt for $5. As they check out, your site displays a recommended product for $10. This suggestion is an upsell. If the customer passes on this item, your site displays another recommended item for $7.
Now, you might be thinking that this tactic is an upsell, not a downsell. While you’re upselling the customer in terms of the original item, it’s a downsell because your e-commerce site suggested a lower-priced object when the customer passed on the first one.
A tripwire works well because it gives customers the impression that they’re getting good deals by seeing a lower-priced item. So, don’t be afraid to suggest lower-tier items as you seek to entice your customers to purchase.
If your products are available in a six pack, you could also offer the option of purchasing a lower quantity. This could be important for customers who don’t want to spend money on six of the same product, or who simply don’t need six items.
It’s also important for new customers who may not be ready to commit to your brand yet – if it’s a product they haven’t used, forcing them to buy six may result in a lost sale. Instead, downsell your customers by making the product quantity flexible.
In the example above, sustainable beauty brand Dip offers customers the option of purchasing single or multiple products – this flexibility caters to returning customers who may be looking to stock up, as well as first-time customers who want to try the product first before buying in bulk.
One way of downselling without actually downselling is to remove specific product features.
Here’s how it works:
A car dealer offers a fully-equipped automobile for $25,000. However, customers can remove certain luxury features from the car and purchase the “base” model for $20,000. In this example, the customer still gets the same car. Nevertheless, they forego some features to save on the overall price.
Removing features works when you offer packages or products with add-ons or extras. This approach is quite common for services. In particular, subscription services offer various tiers. The higher the tier, the more services the customer gets. This approach explains why salespeople always pitch a more expensive product package before offering a lower-priced one.
PickyStory can be used for upselling, cross-selling, and downselling deals. If you want to set up a downselling deal with PickyStory, the “Bundles” feature is the perfect place to start. Bundles allow you to display recommended or related products to your customers, typically on an existing product page.
For example, if your customer is viewing the product page of one of your hats, you can display a downselling deal where you show the customer three different hats (ideally in a similar style to the hat they are viewing). If the hats you are offering your customers are cheaper than the original hat, voila – welcome to downselling!
If you’re looking for more e-commerce tips and recommendations, check out the PickyStory blog.
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