Why You Should Downsell (and How to Get Started)
Have you ever wondered if you should use downsells, cross-sells or upsells in your business?
Based on my experience in the digital marketing space for the past decade, the answer is a resounding yes to all three options.
Here’s the thing, you want to have more than one option for buyers to start working together. This will increase the chances of turning your audience into buyers, regardless of what price point they start at. Plus, if people buy one offer from you, they’re more likely to keep buying in the future.
But sometimes, your product or service might be too much of an investment for them right now. If this is the case, remember that you can always offer a downsell as an additional option. In this post, we’ll break down the ins and outs of downselling without feeling like a sleazy salesman.
What is Downselling?
So what is downselling anyways? Here’s a good definition from Ian Brodie,
“The downsell as used by internet marketers is where someone has declined your product or service offer (sometimes by simply clicking the close button on the web page) and you offer them an alternative product at a lower price.”
For this article, we’ll primarily talk about downselling in the terms of internet marketing but a lot of these principles will apply to other businesses as well.
Let’s say you’re an experienced photographer and have a digital course for $697 that helps new photographers move their business online and get fully booked.
Here’s an example of how downselling would work in your online business.
- You decide to run a live webinar where you teach a photography subject for 40 minutes and pitch your course at the end.
- After the teaching portion, you transition to the pitch and make them an offer to buy your course for $697 or an installment plan of $197 x 4.
- If they buy, they get instant access and can start going through your videos and worksheets.
- But if they don’t buy, they get hit with a downsell offer.
- In this case, you decide to downsell them one of your lower priced programs to help them buy the right camera equipment that costs $197.
This is an easy example of downselling. You’re offering your audience a lower priced program that is more affordable to get them to take action immediately.
The idea behind is that it’s better to sell something for $197 (Insert your lower end offer price) than nothing at all. Plus, once they become a customer of yours, they are much more likely to buy from you in the future.
My only suggestion is to make sure not to annoy people with tons of messaging and keep it a favorable buying experience. This way they have a good impression of you and your business for the long-term.
Other Types of Selling
While downselling is an effective strategy, there are other selling methods as well. Here are a few common strategies that should be a part of your business too.
The opposite of downselling is upselling. In this instance, once someone has bought a product or service, you offer them something else before the transaction is complete. The buyer can choose to say yes to increase the total purchase price or say opt out.
Ultimately, upselling is a phenomenal strategy for entrepreneurs and one that is commonly used in the internet marketing world. Here’s an example of how that would work in your online business:
- You offer your audience a $497 digital course during a sales webinar.
- Your audience hits “Buy” and once they’ve entered payment details, another offer pops up.
- For example, maybe you have another mini-course that aligns with your core offer for $197 but you give them a one-time discount to purchase for only $97. Or you offer them an hour of coaching for an additional $250.
- The buyer can either say yes and purchase with the click of a button or say no.
This works well in internet marketing as so many products are 100% digital and most online course platforms can easily add an upsell option. Always offer an upsell if you can to increase your total customer value!
The other alternative to down selling and upselling is known as cross-selling. This is slightly different from upselling as you promote a similar product but not exactly the same as a core offer. You can see this strategy in the real world when buying bigger ticket items like furniture, electronics, and more when they offer a warranty as an add-on item.
Cross-selling also works when you’re selling online coaching or digital courses too. Here’s how offering a relevant product/service could work in your business:
- Let’s say you offer a $997 group coaching program to your students on a sales webinar.
- Once they say yes (during or after the webinar), you can then offer them something related but relevant, like a lower end online course or physical product you offer.
- This cross-selling item will usually help your audience with the core offer but not directly related.
Similar to upselling, cross-selling makes it easier to increase the overall customer value.
When To Downsell
Now that you have a better understanding of upselling, cross-selling, and downselling, let’s talk specifically about when to downsell. This is a major pain point for a lot of entrepreneurs so let’s dive into it.
First off, when is the right time to downsell? Or, you might be thinking, should I downsell in the first place?
I wish I could say “X is the perfect time to downsell” but it wouldn’t be true. Every business is unique and has different programs and offers. In general, having a downsell offer is never a bad idea as it gives more opportunities for your audience to start working together.
You can do this a few ways. Let’s say they are on the checkout page to your offer and decide not to purchase, you could have a pop up offer with your downsell. Or, you could also introduce the downsell at a later date.
Going back to the photography example from before, let’s say you had a launch and a list of people who chose not to buy. After the webinar, you send out a survey to people asking “Why didn’t you buy” and one option is price.
You could email all the people who checked the “price” box letting them know that you appreciate them attending the webinar and offer them a lower price item. This way, it makes sense as price was their biggest objection while still selling with integrity.
Pros & Cons of Downselling
Now that you know when to downsell, let’s get into the pros and cons of downselling and figure out if it’s worth it in your business.
Pros of Downselling
- More revenue to help offset ad costs.
- Good chance to build brand loyalty with new buyers.
- Offer your audience several buying options for any budget.
- More people can join your programs (even if it is at a lower price).
- A buyer is much more likely to purchase higher end programs in the future.
Cons of Downselling
- More work with email marketing on your end.
- Might have to create a downsell stand-alone offer.
- If not done correctly, it could ruin the buying experience and reduce the chance of future sales.
5 Best Practices For Downselling
Hopefully by now you can see the advantages of having a downsell offer and are ready to implement into your business. Before getting started, check out these five best practices to set yourself up for success and make it the best experience for your audience.
1. Be Transparent
One thing I can’t stress enough about downselling (or selling anything for that matter) is to sell with integrity. Be 100% transparent about who you are and what you are offering.
The last thing you want is the buyer to feel slighted by having all sorts of prices for one offer. Instead, strive for excellent communication so you never ruin your reputation and build a strong relationship with your audience (even if they don’t buy right now).
2. Offer a Trial
Another easy way to downsell and sell with integrity is to offer a free trial period. Instead of giving them a discount on the total investment, offer your program for 3-7 days so people can test the waters.
If you do choose this option, make sure it’s clear if buyers need to cancel, if it’s done automatically and what the next steps are for the buyer to keep going.
3. Don’t Downgrade Your Core Offer
Chances are, there are other entrepreneurs out there who are offering a similar product or service to you. One of the worst things you can do is compete on price by slashing your core offer or signature program.
You don’t want to be the Wal-Mart of your industry, you want to be the Nordstrom.
The goal is to attract buyers who are the best fit for your business. Competing on price will never let you do that and only create razor thin margins that make it hard to scale (especially if you’re running a lot of paid ads).
Instead of slashing prices on your core offer like it’s a Black Friday sale, make sure to offer a stand alone, lower priced program.
4. Create Installment Plans
As I mentioned in the previous section, you never want to compete on price. But, your offer might cost too much for people right now and that’s a good thing. Your offer should stretch them so they get out of their comfort zone and make it a worthwhile investment in their future.
A workaround to having too high of a price point is to offer payment plans. This way, more people can get started quickly but it’s also affordable for them.
One caveat, don’t make the payment plan the same total price as the one-time investment. Otherwise, more people will choose the installment plan and you might have issues with billing or non-payments down the road. Incentivize buyers to go for the one-time investment if possible but having a 2, 3 or 4 pay can help make it more affordable for a larger number of people.
Final note: always label them as installment plans not payment plans.
People don’t like payments (think about your car payment for example), instead, use the word installments. The small tweak can do wonders for buyer psychology and make them more willing to invest (not pay) to learn from you.
5. Cart Abandonment Emails
The final best practice is to integrate your checkout page with your email marketing so you can see if people hit “Buy” but never actually followed through. This way you can help get people to finish the transaction and join your programs.
With your cart abandonment emails, make sure to add a deadline. For example, you could say, “You have 48 hours to save $500 or the price goes back to normal.” Or, something like “The doors close tomorrow and won’t open again for 2-3 months” (or whenever you launch). Adding a firm deadline will help them make a choice and hopefully join your program.
The final thing you can do with cart abandonment emails is to offer a small discount as well. While you don’t want to compete on price, maybe sending a 5 or 10% discount code is all they need to finally pull the trigger. A discount plus firm deadline will help get a lot more buyers on board.
As you can tell, there are a lot of ways to downsell effectively in addition to cross-selling and upselling. At the end of the day, I always think you should have a combination of the three to widen the net of getting people into your programs. Once they are a part of your business, they’re much more likely to purchase something again and again.
Remember, the old marketing slogan, a buyer is a buyer is a buyer.
Downsells are so effective because it helps more people get to learn about you and your offers at a deeper level than free content. It’ll help turn your side hustle into a full-time business! Once anyone joins your programs, this will help build the know-like-trust factor between you two and increase the odds of purchasing a higher end product down the line.
If you don’t have any downsell in your business yet, now is the time to get started with one. Don’t complicate the process either, simply pull a module out of your core offer and price it at a fraction of the price.
I’d also suggest having some sort of upsell and cross-sell as well (or at least have it on your radar) so that you increase your customer value during each promotional launch period.
Don’t forget, webinars are one of the best ways to teach your audience about your offer and introduce products at different prices. If you’re already running webinars, make sure to add a downsell and/or upsell as well.