What is downsell and how can it increase my sales?
In a world where competition has become fiercer than ever with the advent of digitalization, companies are forced to multiply their efforts to define effective strategies. How do you sell when today's consumers are faced with so many offers?
This is where add-on sales strategies come in. Cross-sell, down-sell or upsell, these marketing concepts have proved their worth in a number of retail chains and business sectors.
What is down-sell? How does it differ from other sales strategies? How can you use it to increase your sales? Find out in this article.
What is downsell?
Downsell: definition
Downselling is a marketing technique that involves offering your customer a cheaper alternative to a product or service that they have rejected.
More often than not, downselling takes the form of moving downmarket. But this does not prevent you from benefiting from an equal or even higher margin.
Downselling can take place in a number of situations:
- Face-to-face sales (shops, shops, points of sale, etc.),
- Commercial negotiation (BtoC or BtoB),
- E-commerce (the strategy can be automated using recommendations).
How does it differ from upsell and cross-sell?
Upsell
Upselling is a sales technique that involves offering your customer a more expensive product than the one they had previously chosen. It therefore means moving upmarket.
👉 F or example: One of your customers wants to buy a printer. He has already chosen the model and seems confident. In the course of your discussions, you will suggest a more functional, higher quality printer at a higher price.
Cross-selling
Cross-selling is a technique that involves encouraging customers to buy more of what they had planned by offering to buy additional products linked to their initial purchase.
👉 F or example: Your customer wants to buy an evening dress. You can offer to complete her outfit by adding pumps and accessories. She will therefore end up buying more than she had originally planned.
These marketing concepts have one major thing in common: they are all 3 additional sales strategies. They enable the salesperson to increase turnover and improve sales.
Their difference lies in the way they work. Upsells offer a more expensive product, while downsells offer a cheaper product. The cross-sell, on the other hand, offers a multitude of other products to complement the initial purchase.
4 examples of downselling
- Example 1: A customer in an electrical goods shop wants to buy a dishwasher. You offer him one of the best products in your shop, but you notice that the price seems to be a problem. He refuses the offer. You present him with a more accessible model at a lower price, which nevertheless meets all his expectations.
- Example 2: A customer wants to buy a body scrub. The product you offer is fine, but seems too expensive. So you offer them a set of 3 body products at a lower price, but with smaller packaging and therefore less material.
- Example 3: A customer wants to buy a car. You offer them a complete model, but they don't seem to like the price. So you present them with the same model, but with 2 or 3 fewer features, which reduces the price.
- Example 4: A customer wants to buy a handbag on your online site. She' s added a bag to her basket that she loves, but hasn't completed her purchase. At the bottom of her basket, you offer her similar items at more affordable prices.
Why use down-selling?
To maintain the sale
Downselling is a strategy that allows you to avoid losing your sale by offering a more affordable product.
👉 One of the biggest barriers to sales is price. So downselling is an excellent way of keeping your customer buying while satisfying their needs.
Reduce basket abandonment
It's very common for consumers to abandon their shopping baskets and not go ahead with the purchase.
👉 According to Fevad, the average transaction abandonment rate is 67.4% : more than half of consumers who intend to buy a product do not complete their purchase.
Digital down-selling is based on cheaper recommendations presented at the bottom of the shopping basket page or directly on the site's product catalogue. This gives e-consumers more choice and therefore a greater chance of not abandoning their shopping baskets.
Increasing the average shopping basket
👉 Of the 64.7% of e-consumers who abandon their shopping baskets, 44% do so because of the price.
Downselling seems to be the ideal technique for alleviating this problem. Offering one or more products at a lower price will reduce this disincentive and therefore increase your customers' average basket, as they will buy more and more often. Repeat purchases will be easier if they know they won't be paying too much.
Keeping your customers
Finally, downselling enables you to retain your customers and improve their loyalty rate.If a customer feels that your products are too expensive for them, and that you have no alternative to offer them, they will go and see the competition. You lose your customer.
Downselling enables you to retain your customers by responding effectively to their needs. Consumers need to be able to find what they're looking for in your shop, and this builds loyalty over the long term.
What's more, it's easier to build trust between the sales assistant and the customer if the latter sees that the sales assistant is offering products that meet their expectations and is not trying to sell them the most expensive products at any price.
How do you downsell? Our 3 key tips
Choose the right moment
Downsell must be offered at the right time for it to be effective. Offering it too early or too late will cost you your sale and probably your customer too:
- Too early, the downsell risks lowering the value of the average shopping basket. This is a shame, because the very purpose of this sales technique is to increase the value of the average shopping basket.
- Too late, and the downsell will no longer be relevant in the eyes of the customer, who will already have made up his mind.
So how do you know when is the right time to offer it?
The answer is simple. The best time to downsell is when the customer is looking at the products. It can happen at the time of the sales pitch or negotiation in your sales tunnel.
When the customer is looking at the products, talk to them to find out more about their motivations. This is the ideal time to offer downsell: just before the decision is made and after the research phase.
👉 Example : A customer would like to buy a mobile phone. During your discussions, you notice that they are rather price-conscious and have a limited budget. When they are looking at the products, offer them a phone suited to their needs. If they object, move straight on to a more affordable offer, or to the same offer but with fewer features.
In the case of an e-commerce site, the downsell is often proposed:
- In the bottom or side banner,
- At the bottom of the shopping basket page,
- In recommendations on the selected product page (this is also the case for cross-selling).
Take the time to analyse customer habits
It is essential to analyse your customer's buying habits and motivations. Although price is known to be the main factor holding consumers back, this may not be the case for everyone. What's more, it also depends on the product in question.
So, to avoid offering a downsell when the customer was expecting an upsell, for example, you need to analyse their motivations and needs through discussions. For e-commerce sites, you can analyse their searches or the filters they have defined.
💡 Tip: Listen to what your customer wants, find out what motivates them, what their needs are and what holds them back. Understand their expectations and propose a suitable product before they make their decision. If they don't like your first proposal, don't panic! Move straight on to a more accessible proposal (if price is the main obstacle).
Offer cheaper top-of-the-range products
The customer may want the same product, but at a lower price. In this case, you can :
- Offer them a product from the same range, but at a lower price. For example: a customer wants to buy a Channel foundation. The price seems to be a problem, but she really wants a luxury foundation. You could offer her a top-of-the-range but more affordable product such as Lancôme, Laura Mercier, Fenty Beauty, etc.
- Offer the same product, but with fewer options and/or features.
For example: a customer wants to buy a particular brand of washing machine. But the products you offer are beyond their budget. You can offer him a machine of the brand he wants, but with fewer features to reduce the price.
So downselling is a real performance lever for companies, with many relevant advantages, but you have to choose the right moment to present it to your customers. That way, you can maximise sales and build customer loyalty.
Article translated from French