How To Get More Potential Customers to Purchase From You – Downselling
So far we’ve talked about 2 Lead Generation strategies. Now we’re going to the next step of talking about Lead Conversion strategies.
Downselling is a fun way to have that final chance to get the potential customer to purchase from you.
And if you don’t have a Downsell strategy we highly recommend you read this.
Quite simply, downselling is offering a potential customer an alternative product at a lower price if they decline your current offer.
Yes, you may not make as much revenue or profit as the current offer, but you still make some money and most importantly you get to build the relationship with the customer and increase the probability they’ll purchase again in the future.
Here’s an example. Many gyms try and sell new members a six or twelve month membership. If that fails, they’ll try and downsell them by offering a 3 month ‘body makeover. And if that fails, they may go to a 1 month or even a 1 week trial membership.
They do this because they know that if they can get them to buy anything then the odds of them staying with them long term is increased dramatically. The customers biggest fear comes before they open their wallet to pay.
Another example is a florist. Normally a bunch of nice flowers for Valentines Day, Wedding Anniversary, Birthday, Mothers Day is normally around $50 but lets assume the guy doesn’t have that much money (or doesn’t want to spend that much money) . So, if he has flowers on his mind, do you think he would be open to the idea of purchasing cheaper flowers that were just as romantic?
Yes he would! Of course he would. And so if the alternative only costs $25 and the florist only used the downsell strategy once per day (quite conservative) then this creates nearly $8,000 in extra annual revenue for them. And suppose they had this downsell option for wedding flowers, funeral flowers and other styles – that’s even more revenue.
To implement, the first thing to look at is the current price point for your product. See if you can come up with an alternative but similar product – for half the price. And how many of these do you think you could sell each week? And calculate how much extra revenue does that give you for 1 month and for the next 12 months.
The revenue created from the Downsell opportunity multiples with the more downsell products you have. And it continues to grow year after year.
We found one business owner $65,000 in additional annual revenue and this increased the valuation in the $200,000 – $250,000