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Downselling

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Ian Brodie

Ian Brodie

Ian Brodie teaches consultants, coaches and other professionals to attract and win their ideal clients by becoming seen as authorities in their field.


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Selling Professional Services

Downselling

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Downselling

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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.

To subscribe to the Outside In newsletter to read the article click here.

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 least buying something. That means you get some return for your sales effort. And since they're now a customer they will hopefully have a good 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 purchase and decided 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 bad buying behaviour in future. If a customer comes to believe they will be made a “better offer” simply by saying no to the original 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 anyway, who cares about whether you annoy them. But in reality they may still be potential customers for the future, and they may also create bad publicity if they find the process very annoying.

To avoid encouraging bad buying behaviour, the downsell must not simply be a cheaper version of the original offer. It must be significantly different 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 good way to decide 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 actually more interested in a different 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 afford 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 decided not to go ahead – 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 put 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 early – it may be you just need to work through some objections to confirm the original 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 backtrack a little and go back to some of the things you were saying about the problems you were having with your lead times?”. 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 subject. It could be they were hoping to work with you – but just weren't yet convinced enough to justify the 10 day project. A half day workshop is much easier to buy – and may give them the confidence to hire you for the big 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 original 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?”

Creating downsells like this can reopen 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 instead.

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 different 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.

Comments

Ian Brodie

Ian Brodie

http://www.ianbrodie.com

Ian Brodie teaches consultants, coaches and other professionals to attract and win their ideal clients by becoming seen as authorities in their field.

Comments
  • user

    AUTHOR Christian Maurer

    Posted on 11:13 am February 23, 2010.

    Ian,
    this is a very interesting concept. I have used immediate down-selling in the past, mostly by shifting workload between me, the consultant and the client when negotiating an engagement.I have never used it as, what I would call, a lead recycling tactic.

    Classical lead recycling (some people call it nurturing) suggests to stay at the client’s top of mind because very often the the client does not want to buy right now. There are studies suggesting that a big portion of those will though buy within 12 to 18 months. You want to have top client’s top of mind when he/she is ready to buy.

    This is why I struggle a bit with using down-selling as a lead recycling tactic from a conceptual point of view. How do I distinguish a lead who will never buy what I offered (down selling candidate) from a lead who is just not ready to buy yet what I offered (classical recycling candidate)?
    Not being sensitive to this question could lead to bad buyer behavior. Something as you mentioned, we should try to avoid.

    Thanks
    Christian

  • user

    AUTHOR Ian

    Posted on 12:05 pm February 23, 2010.

    Good points Christian. I’m not sure of the answer on this one. That’s why I offered it up tentatively as suggestions to explore rather than definite solutions.

    The internet folks have the “advantage” of knowing that if someone doesn’t buy now, the chances of them returning to the site are minimal. Not so in the real world where the chances are that we will talk with them again.

    In the case you mention (not yet vs never going to buy) the thought that occurs to me is to focus the downsell on complementary but not replacement services.

    When nurturing/recycling leads, we’re trying to build our relationship with the potential client to establish our credibility and that they could work well with us. In some ways, what better way to do this that to actually work for them in a related field?

    The thing that’s in my mind though is that the downsell concept feels a little too product oriented rather than solution oriented. Again, on the internet there’s not much chance to explore exactly what a client needs – so you have to suggest products. In professional services we design solutions to exactly meet our clients needs. There shouldn’t be a need for a downsell.

    As I say, I’m still playing around with this one.

    Ian

  • user

    AUTHOR Reeta Luthra | Stress and Health

    Posted on 1:35 am February 24, 2010.

    Hello Ian

    I’ve never offered a downsell but have experienced them on websites – and I had to smile when I read your summary of the two problems because that’s exactly how I felt.

    It’s a risky tactic for a professional firm – unless it is:
    1) Included as a negotiable option
    2) Timed appropriately. Offer it too soon and it encourages bad buyer behaviour. Too late and the buyer has forgotten they even wanted it. With the right timing, it’s possibly reassuring for the buyer that you’re thinking about them.

    Like I said, I haven’t offered one myself, but it’s interesting thinking about it now.

  • user

    AUTHOR Ian Brodie

    Posted on 2:47 pm February 24, 2010.

    Thanks Reeta – I think there are definitely risks with it.

    One thing I’d say is that the internet marketers have the advantage of being able to test different approaches to see what works. Even if most of us dislike those “wait – don’t go away until you’ve seen” boxes – they work. The stats I saw from a recent downsell from a physical DVD to a digital download saw a 50% increase in take-up. So I’d say it’s worth playing around with.

    I think the secret is to have something different enough that it doesn’t just feel like a desperate discount – but similar enough that it hits the same area of need.

    Ian

  • user

    AUTHOR Paul Simister

    Posted on 12:00 pm March 2, 2010.

    Great blog Ian and there is plenty to learn from Internet marketing since it is a very pure form of direct marketing.

    It’s suitability will depend on the approach taken during selling and the results of win/loss analysis.

    If you sell with the approach of “make the first sale and easy one”, you have little room to downsell further but if you take a bolder “go for it” approach then a reduced value, reduced price offer can certainly help.

    Depending on client it can be nice to put the options on the table and let them choose but other clients have a problem making a decision – Yes or No is tough – so “if you want one, which one do you want” makes the decision harder. Downselling means you can lead with what you believe is the most appropriate and bring out the back-up if you get a No.

    I remember trying to buy a new kitchen and I was totally overwhelmed by the options and we bought from someone who narrowed down the choices.

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