Contents
- What is a downsell?
- Why is a downsell necessary?
- Downsell strategies
- Where to place offers?
- Downsell mistakes
What is a downsell?
A downsell is a sales method in which a customer is offered to purchase a product or service at a lower price or with a discount. This approach not only helps maintain customer interest but also allows them to acquire the desired product without significant expenses.
Why is a downsell necessary?
The main goal of a downsell is to retain the customer and prevent them from leaving empty-handed. For example, if a user visits an online store and is interested in Adidas sneakers, but they turn out to be too expensive, the seller can offer more affordable alternatives. Thus, even if the main product is not purchased, the seller still has a chance for a sale.
At first glance, offering cheaper products may seem unprofitable for the business. However, it is important to understand that the audience of customers is diverse, and not everyone can afford expensive items. If a customer sees no alternatives, they will leave the store without making a purchase. As a result, the company loses potential profit. Offering more affordable products or discounts can significantly increase the chances of a successful sale.
Thus, a downsell:
- Stimulates sales and increases profit;
- Enhances brand loyalty;
- Expands the customer base, including people with different income levels.
Generating income, even in small amounts, often proves to be more important than having no income at all. For stores, especially those that offer a wide range of products, it is essential to sell the entire volume of goods to free up retail space for new arrivals and recoup investments.
Downsell strategies
There are several downsell strategies that are often combined to maximize store profits:
- Similar product at a lower price. Alternative products should be similar to the initially selected one but cost less. For example, if a customer does not want to buy sunglasses for 1390 rubles, they can be offered other models of the same brand at a lower price.
- Discounts. To retain the customer and encourage a purchase, a discount on the product can be offered. This is especially relevant during holidays when people are actively looking for gifts.
- Personalized offers. If a customer has added a product to their cart but has not completed the purchase, a unique offer can be sent to them via email, reminding them of the abandoned cart.
- Installment payments. If a customer cannot pay for a product immediately, offer them the option of installment payments. This is convenient for both the buyer and the seller.
Where to place offers?
To effectively communicate information about price reductions or the offer of cheaper products, various placement options can be utilized:
- Homepage of the website. It should attract visitors' attention to popular products and special offers.
- Product page. Discounts can be announced here, a countdown timer can be set, or alternatives can be suggested.
- Cart. Even in the cart, cheaper alternatives can be offered if the customer hesitated due to the high price.
- Pop-up messages. Use pop-ups to offer discounts or promotions, but monitor their conversion rates to avoid annoying users.
- Newsletters. Email newsletters work well for informing customers about discounts and promotions, as well as for personalized offers.
Downsell mistakes
Entrepreneurs should avoid common mistakes that can negatively impact the downsell strategy:
- Excessive pressure. Do not pressure the customer or push cheap products, as they may leave with a bad impression.
- Incorrect choice of alternatives. Alternative offers must align with the customer's interests to be effective.
- Poorly thought-out strategy. A downsell must be beneficial for both the customer and the seller to avoid losses.
Studying and understanding these aspects will help avoid common issues and make a downsell a truly effective tool for increasing sales and customer loyalty.