The Art of The Downsell: How to Make More by Charging Less
Updated: Dec 9, 2020
The humble downsell doesn't get enough credit.
Why? Because humans being humans and money being money, the lower the price, the easier a product is to sell.
As an eCommerce merchant, you've probably heard lots about upselling and cross-selling. But you may not know as much about downselling.
Today we're going to dive deep into the topic. You'll learn how to use downselling to convert browsers into buyers and capture revenue that you otherwise may have missed
So strap in and get ready to learn how to to make more by charging less!
Table of Contents
What is Downselling?
Simply put, downselling is offering your customer an alternative product that's cheaper than the original one they were considering.
For example, imagine you're looking to buy a new phone. You like the latest model, but you think the price is a little too dear.
Instead of letting you leave the shop empty-handed, the salesman decides to show you a less expensive model.
Given that price is your only objection, the cheaper option is attractive for you, so you whip out your credit card and buy it.
That's about as straightforward as downselling gets. For this post, we'll mainly talk about downselling in eCommerce; however, most of the principles will apply to other business models as well.
So, with that basic downselling definition under our belts, let's keep going!
The Benefits of Down Selling
There's lots of reasons why you should add downselling to your sales strategy. But here are three of the best:
Downselling boosts revenue: A good downsell captures revenue where there may otherwise have been none. What's more, by gaining a customer, you make it much easier to sell to them again in the future.
Downselling attracts a broader audience: Downselling allows you to appeal to customers with budgets of all kinds without offering huge discounts or sacrificing your brand's integrity.
Downselling cements brand loyalty: Sometimes, a customer doesn't need your most expensive product. By steering them towards a more budget-friendly option that meets their needs, customers will be grateful you didn't overcharge them and more inclined to shop with you again.
5 Clever eCommerce Downselling Examples
Right, we know what downselling is and why it's useful. Now, let's look at four examples to see it in action.
1. The Installment Plan Downsell
When you're selling higher-priced items, it can be challenging to get customers to front up the cash for your products.
That's because, at some stage, we've all experienced a hit to the bank account that left us reeling in a state of mild anxiety. For most of us, dropping $500 is a much larger commitment than agreeing to pay $40/mo.
For most of us, dropping $500 is a much larger commitment than agreeing to pay $40/mo
Electronics retailer BestBuy understands this and utilizes the payment plan downsell on most of their higher-priced items:
In this instance, customers will pay about the same for the TV as if they bought it outright. On the other end, BestBuy receives the same revenue. So it's a win for everyone involved.
BestBuy's 'open-box' offer is another downsell tactic worth noting. This offer allows shoppers to buy showroom products that have minor signs of wear and tear.
This downsell allows the electronics giant to offload 'used goods' at a great price. Below, you'll see how you can save up to $90 on the new TV price by opting for an 'open-box' version:
If you want to downsell on Shopify using this approach, you can do it with an excellent app called affirm. To see it in action, check out leather-goods store WP Standard who offer payment plans on their gorgeous rucksacks:
2. The Entry-Level Product Downsell
Some brands can't offer payment-plans or run big sales because their unique value proposition is accounted for by their products' exclusivity and price.
For example, would a Prada handbag really feel like a Prada handbag if you didn't spend north of $1,000 on it? Probably not. But here's the rub: Prada knows that there's a wealth of consumers who aren't quite ready to drop four figures on a bag but still want to flaunt some Prada kit on the streets.
How to solve this dilemma and get those customers to buy? Answer: A $250 phone case.
Instead of only offering products at prices that would make even the healthiest of bank accounts wince, Prada also provides less expensive items to allow more consumers to get in on the action.
Yes, $250 is still an exorbitantly high price to pay for a phone case, but it's not out of reach of most US consumers if they really wanted it.
It's worth saying that this downsell tactic doesn't apply only to luxury brands. For example, consider the likes of the iPhone SE. It's a device that gives customers the iOS experience at a much lower price point than Apple's flagship models.
The reason? Apple knows that acquiring a customer is most of the work. After all, you've got a 60-70% chance of selling to an existing customer. Compare that with just a 5-20% likelihood of selling to a new prospect, and it's easy to see the power of the downsell.
3. The Classic Downsell
The classic downsell does exactly what it sounds like: it offers shoppers a more wallet-friendly product or option. Here you can see gym-wear retailer Ellie, giving browsers three options for each of their hand-picked outfits.
The regular price for the top, bottom, and bra is $44.95. But you can leave the bra out and pick up the other two for just $39.95.
All visitors will not want the bra - so rather than have them fork out for it, Ellie gives them the option to save $5. It's as simple as downselling gets - but that's precisely why it works so well.
Interestingly, Ellie also offers shoppers an upsell; you can pick up the full outfit with accessories for an extra $5. With a broader price range like this, you'll stand a better chance of converting more visitors regardless of their budgets.
With a broader price range like this, you'll stand a better chance of converting more visitors regardless of their budgets.
Here's another example from Scandinavian bag manufacturer Sandqvist. The brand's premier bag 'Stina' retails for €299. However, you can see they're using the 'related products' section to suggest the more affordable but very similar 'Myrtle' bag, which retails for €50 less.
4. The Free Trial Downsell
If you're running a subscription-based ecommerce business, a free trial can boost conversions by reducing the risk involved for your customers. Instead of a discount, offer customers a couple of days or weeks where they can test the waters.
For example, mindfulness app Headspace lets interested parties try out the service and see if it's right for them.
Headspace uses a free trial because they know potential customers may have reservations about paying more than $60/yr for an app, especially if they're new to meditation.
So, rather than charging the fee upfront, they downsell access (for free!). This lower-commitment approach allows Headspace to capture revenue from customers who otherwise may never have signed up.
5. The Abandoned Cart Down sell
If you shop online, you've probably added an item to your cart only to get cold feet when payment time comes around. Things like unexpected shipping costs or the thought of finding a better deal elsewhere can make us think twice about completing a purchase.
As a retailer, this is where an abandoned cart email comes in handy. The abandoned cart email is the perfect place to downsell your customers. If the price was too high, recommending other more affordable products is a smart way to recapture a lost sale.
For example, check out the related products in this email from LeSportsac:
See how they suggest an $18 bag when the original item in the cart retails for $40? While the less expensive product is not the $40 that LeSportsac wanted, it's certainly better than nothing.
You can also downsell by offering customers bonuses like free shipping and discount codes. It's not technically a downsell as you're not offering an alternative product, but it's still a downsell-esque move that can earn you a lot of additional revenue.
Downselling Best Practices
When it comes to best practices for downselling, the rules are similar to upselling and cross-selling, but there are a few exceptions to be aware of.
Know when to introduce the downsell
Like any type of selling, timing is key. If you're too eager in presenting cheaper options to your customers, you may persuade customers who were willing to spend more to opt for a more affordable alternative.
Worse still, customers might become confused by the various price points and back out without buying either option. So, use it sparingly. Downselling is only appropriate when it's clear that a customer won't buy at the price you're offering.
Downselling is only appropriate when it's clear that a customer won't buy at the price you're offering.
In practical terms, this could mean show presenting your downsell exclusively to browsers who've spent time on your site or added to cart but haven't checked out yet.
Don't be pushy
A customer's chances of converting on a down-sell aren't great compared to an upsell, or a cross-sell. That's because they haven't already committed to a purchase.
If you're pushy with your down-sell, you'll end up leaving customers with a bad taste in their mouth.
So, if a customer has already 'got one foot out the door' so to speak, then let them go. If you try to force a sale, you can bet they'll never come back.
Like most digital marketing tactics, getting your downsell right is something you'll have to keep testing. To find a formula that works, play around with:
Different price points to determine what's most appealing to your customer
Different downsell offers: for example; you could try a free ebook instead of a product
Other triggers for your downsell based on customer actions
The more data you collect, the better you'll be able to make decisions that'll lead to your creating a killer downsell.
How to Start Down Selling Today
As you can see from the mixed and varied examples, there's no one-size-fits-all approach to downselling. So, here's three practical ways to implement a downselling strategy on your store:
1. Downsell via live support
When contacting support, 41% of consumers prefer live chat over any other channel. So, why not use it as an opportunity to guide customers towards better purchases with downselling, cross-selling, and upselling?
2. Downsell via cart abandonment email
People who abandon carts on your store are high-qualified shoppers. Most of them abandon their carts because of unexpected costs. A downsell solves this problem by lowering the price of their order.
Use downselling in conjunction with an abandoned cart recovery app like Carti to drive customers back to the checkout and recapture lost sales.
3. Downsell via pop-ups
Exit-intent pop-ups can be a great last-ditch effort to make customers re-think their decision to leave. If a product was too expensive, you can leverage pop-ups to present a more affordable alternative before the customer closes their browser.
4. Downsell via product recommendations
According to Bariliance, product recommendations account for up to 31% of eCommerce site revenues. So, what better place to offer your customers a related item at a lower price?
Use an app like Wiser to set up specific recommendations on more expensive items where you feel a downsell may catch some of your more budget-conscious buyers.
Go Forth & Downsell!
Sometimes your star products can be too much of an investment for a portion of your audience.
Along with upselling and cross-selling, downselling gives your shoppers the option to choose from a wider variety of price points.
A broader spread of pricing boosts your chances of turning browsers into buyers and allows customers to get acquainted with your brand where they otherwise may have not.
The best part is that once you've acquired a customer through downselling, you'll find that over the long term, they'll come back to buy from you again and again.
Dialing in your store's downselling strategy will require experimentation and effort. But once you find a formula that works, you'll be poised to grow your brand equity and pull in greater profits.
Do you use downselling on your ecommerce store? What's been your experience with it? Let us know in the comments below!