Downselling
In the latest version of the Outside In newsletter I discuss a number of things that professional services can learn from internet marketers. Each of the strategies is something I’ve adopted myself or seen results from with clients.
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One strategy which internet marketers use a lot is the “downsell” – it’s something I’ve rarely seen professional service firms use.
Downselling in Internet Marketing
We’re all familiar with upselling and cross-selling. 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.
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 smallest amount buying something. That means you get some return for your sales effort. And since they’re now a customer they will hopefully have a excellent 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 buy and chose 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 terrible buying behaviour in future. If a customer comes to believe they will be made a “better offer” simply by saying no to the first 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 anyhow, who cares about whether you incense them. But in reality they may still be potential customers for the future, and they may also make terrible publicity if they find the process very annoying.
To avoid encouraging terrible buying behaviour, the downsell must not simply be a cheaper version of the first offer. It must be significantly uncommon 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 excellent way to choose what the downsell should be is to survey customers to find out why they didn’t by – what their main objections were. Was it price? Was the offer too simple? Or too complex? Are they really more interested in a uncommon area? Once you know the main objection you can offer a downsell which 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 realise they just don’t have the money to meet the expense of 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 chose not to go yet to be – 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 place back on the agenda.
Perhaps you’ve proposed a major lead-time reduction programme across all the clients 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 realise a client is not going to buy what you’re currently offering. Don’t introduce it too ahead of schedule – it may be you just need to work through some objections to confirm the first 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 back down a small and go back to some of the things you were saying about the problems you were having with your lead era?”. Then rework the problem and solution and introduce the downsell.
A downsell can also be introduced later. For example: if you ran 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 theme. It could be they were hoping to work with you – but just weren’t yet convinced sufficient to justify the 10 day project. A half day workshop is much simpler to buy – and may give them the confidence to hire you for the huge 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 first 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?”
Making downsells like this can save the dialogue with a client who may not have been ready to buy – but who may have been pretty close. Certainly closer to buying than a completely unqualified lead that you might be working on as a replacement for.
What’s your experience?
Professional service firms often downscope an engagement if it’s just too much for the client to buy. But wider downselling – particularly coming back later with a uncommon offer – is a tactic I’ve not seen many firms use.
What’s your experience been? Have you had successes or failures in this area. Please share in the comments below.
To read more about what professional service firms can learn from internet marketers (and get a free copy of my Referral Masterclass ebook), subscribe to the Outside In newsletter. Click here.
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Downselling is a post from: Get Clients