What happens when a prospect isn’t ready to spend the amount you’re charging?
Short version: they leave.
Whether by walking out of your brick-and-mortar store or closing a browser tab, if a prospect decides not to buy your offer, they’re gone. They might try to find a better option elsewhere, or they might not.
If you don’t have a strategy for capturing that prospect’s business, you could be leaving money on the table.
What is down-selling?
Down-selling is nothing more than offering a prospect an alternative at a lower price when they decline your original offer.
The goal is to turn the prospect into a client. You not only get the short-term financial benefit, but you also gain the opportunity to do business with them again in the future.
Gyms do this all the time. They always start by trying to sell new members a full one-year membership.
If the prospect declines, they’ll offer a 90-day “health makeover” membership. If that fails, they may go to a 30-day or possibly a one-week “trial” membership.
Gyms and health clubs know if they can just get a prospect to buy something, the odds of them staying with them in the long term goes up exponentially.
Small sales add up to big results
Consider the local florist.
Many people show up at a florist to buy roses for their better half—Valentine’s Day, a birthday, an anniversary, Mother’s Day, and so on.
But suppose a bouquet of a dozen roses costs $50, and they don’t have that much money to spend. If the florist didn’t have other options, that’s a prospect out the door and buying at another shop.
If the florist has a less expensive alternative—say, a dozen carnations for $25—the florist might make a smaller sale (instead of no sale at all).
This seems like a minuscule move, but it makes a big difference.
If our hypothetical florist only used that down-sell once each day, this would still add up to almost $8,000 in additional annual revenue.
I do this in my business, too: My highest priced offer is one-on-one coaching, but I also offer group coaching at a lower price point. More affordable still is my e-learning site. By providing high-quality options at multiple price points, I make my services more accessible to a wider portion of my prospects.
Having a solid down-sell strategy increases the value of each prospective customer by turning a no-sale into a smaller sale.
How to create a down-sell offer for your business
What’s your current price point for what you currently sell?
Cut that price in half and try to come up with an alternative for this new price.
How many of this new product or service would you conservatively estimate you could sell each week?
To see how this strategy can affect your revenue, multiply your reduced price by your number of weekly sales, then multiply that number by 52 weeks to reveal your annual increase.
And that’s just one down-sell. How many additional down-sell opportunities would you estimate you could easily develop?
In addition to less expensive bouquet options, our florist could create down-sell alternatives for weddings, lower-priced options for funerals, less expensive boutonnieres for prom, and so on.
Ultimately, a small sale is better than no sale. And if you really “wow” them, if you over-deliver on your promises, if you give them an exceptional experience, they’ll want to keep coming back and giving you their business over and over again.
Want to understand down-selling better or learn more about how this might fit in your overall profitability strategy? Grab your free copy of my e-book, Mind your Profits, from my website www.profitminds.net.