What does Downsell Mean?
Downsell (OTO Downsell) – An offer that is presented after a customer declines an Upsell (OTO) offer. This is either a payment plan or product offered at a lower price that can provide value to the customer.
Downselling in Internet Marketing
The downsell is 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.
The advantage of a downsell is that even if a customer doesn’t buy the product, you’d ideally like them to buy, they are at least buying something. That means you get some return for your sales effort. And since they’re now a customer they will hopefully have a good experience with you and be much more likely to buy higher-priced items in the future.
The problem with downsells is twofold.
- First, they can be annoying. If you’ve pondered over a purchase and decided not to buy, it can be rather annoying to be held up and made another offer. And it might even seem desperate.
- Secondly, they can encourage bad buying behavior in the future. If a customer comes to believe they will be made a “better offer” simply by saying no to the original offer, then they will always say no.
To counter the annoyance issue, you need to make the downsell relatively pain free. Some marketers might argue that if you’re going to lose a customer anyway, who cares about whether you annoy them. But they may still be potential customers for the future, and they may also create bad publicity if they find the process very annoying.
To avoid encouraging bad buying behavior, the downsell must not simply be a cheaper version of the original offer. It must be significantly different in some way which justifies the lower price.
For example, a common offer in internet marketing is a free DVD with training material on it. A downsell could be for cheaper, downloadable versions with no physical DVD.
Or it could be for less advanced training material that may be a better fit for the potential customer.
A good way to decide what the downsell should be is to survey customers to find out why they didn’t by – what their main objections were. Was its price? Was the offer too simple? Or too complex? Are they more interested in a different area? Once you know the main objection you can offer a downsell that addresses it.
Downselling applied to Professional Services
In professional services we have the advantage that we’re selling face to face – so there shouldn’t really be a mismatch between what the client is looking for, and what we’re offering.
But no one is perfect. Sometimes we offer a service that’s more than the client was looking for. Sometimes it’s just not quite focused in the right area. Sometimes they realize they just don’t have the money to afford the service we’re offering. And sometimes they’re just not quite convinced we’re right for them – they haven’t seen us in action yet.
In these cases, a downsell can sometimes help.
For example, if you’ve been discussing a consulting project with a client, and they decided not to go ahead – perhaps a downsell to a training course in the same area for some of their team would get them to bite. After doing a brilliant job with the training course, the consulting project may get put back on the agenda.
Perhaps you’ve proposed a major lead-time reduction program across all the client’s major factories – and it felt like too much to them. You might be able to downsell to a pilot in one factory.
When to Downsell
A downsell is most appropriate when you realize a client is not going to buy what you’re currently offering. Don’t introduce it too early – it maybe you just need to work through some objections to confirm the original sale.
But if you know a client is not buying, then a downsell can work. It’s best to visibly rewind the discussions. “John, it sounds like what I’m proposing doesn’t fit well with what you’re looking for. Do you mind if we backtrack a little and go back to some of the things you were saying about the problems you were having with your lead times?”. Then rework the problem and solution and introduce the downsell.
A downsell can also be introduced later. For example: if you run a campaign to sell a 10-day analysis project to a qualified list of companies, try contacting the ones who turned you down a week later with an offer of a couple of places at a half-day workshop you’re running on the subject. It could be they were hoping to work with you – but just weren’t yet convinced enough to justify the 10-day project. A half-day workshop is much easier to buy – and may give them the confidence to hire you for the big piece.
In this case, you must be careful and have a logical reason why you’re proposing something new which you didn’t throw into the original proposal.
For example, “John, we’ve had a number of clients express an interest in a half-day workshop on lead time reduction. It wasn’t the right time to start up the analysis work together – but would you like to come along to the workshop?”
Creating downsells like this can reopen the dialogue with a client who may not have been ready to buy – but who may have been close. Certainly, closer to buying than a completely unqualified lead that you might be working on instead.