You’ve dug deep into your product and package offers and you can clearly see how each one leads to the next, and ultimately, to your top-level program. (If you’re shaking your head no to this, check out this post.) Now it’s time to work out the logistics of actually making the sale.
I’m assuming here that you already have a plan in place for marketing and selling your existing products. With the sales process foundation firmly in place, it’s time to make the most out of every lead, and one powerful technique is the strategic use of upsells and downsells.
Many businesses fail to maximize their profits by overlooking the power of upsells and downsells within their sales funnels. In this blog post, we will unravel the art of maximizing profits with upsells and downsells, and why you should include them in your sales funnel strategy.
What is an Upsell?
An upsell is a marketing technique where a customer is presented with an offer to purchase a higher-priced product or service after they have already made a purchase decision. Typically an upsell is offered after the buy button is clicked, but before a credit card is charged, which makes the decision easier for the buyer (no need to enter credit card info twice).
An upsell will almost always be more expensive than the original purchase, and is generally a natural add-on (although not a necessity). For example, a $97 DIY training course might have a $297 group coaching upsell.
The goal of an upsell is to increase the average transaction value by enticing the customer to upgrade or add on additional features or services.
What is a Downsell?
On the other hand, a downsell is a strategy used when a customer declines an upsell offer. Instead of losing the sale altogether, a downsell involves presenting the customer with a lower-priced alternative. Like an upsell, the downsell is offered after the buy button is clicked but before the checkout is completed.
Unlike an upsell, though, the downsell is generally a lower value product. In the example above, if the $297 group coaching upsell is refused, the downsell might be a bundle of video replays of previous group calls for $47. The content is still highly related to the original product, but again is not a necessity.
The aim is to still capture their interest and provide them with a valuable solution, even if it may not be the initial product or service they were considering.
How to Use the Upsell and Downsell
- Strategic Placement: Position your upsell and downsell offers at the right stages of the sales funnel. Ideally, the upsell should be presented after the initial purchase decision has been made, while the downsell can be introduced if the customer declines the upsell. This way, you can maximize your chances of increasing the average transaction value while still capturing the sale.
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Personalization: Tailor your upsell and downsell offers to each customer’s specific needs and preferences. Use data and insights gathered from previous interactions to create personalized recommendations. By showing customers that you understand their unique requirements, you increase the likelihood of them accepting your offers. - Value Proposition: Clearly communicate the value and benefits of your upsell and downsell offers. Highlight how these additional products or services can enhance the customer’s experience or solve a problem they may encounter in the future. By demonstrating the value they will receive, customers will be more inclined to make additional purchases. If you’re not sure what your USP is, read more here.
- Limited-Time Offers: Create a sense of urgency by offering time-limited discounts or bonuses for accepting the upsell or downsell. Scarcity can be a powerful motivator for customers to take action and make a purchase decision.
It is possible to make more than one upsell and downsell offers. In fact, you can nest several offers together, and you will see this technique in action if you purchase online products frequently. Even your hosting account and domain registrar are putting this strategy to use — sometimes to the point of annoyance!
That’s an important point to keep in mind: Too many upsells and downsells will quickly irritate your buyers, so it’s a good idea to start with a single upsell and single downsell until you’ve tested the strategy. You can always add more steps to your funnel later.
How do you present your upsells and downsells?
How your upsells and downsells are presented will largely depend on your shopping cart and/or payment processor. Some providers easily automate the process, while others will require a bit of work on your end, or your virtual assistants, to set up. Look for options for “OTO” (one-time offers) or funnels in your provider’s FAQ section for complete instructions.
If your provider does not offer automated upsells and downsells, you can easily create your own funnel flow simply by linking pages together in a logical order.
Incorporating upsells and downsells into your sales funnel strategy can have a significant impact on your business’s profitability. By strategically positioning these offers, personalizing them to each customer, and clearly communicating their value, you can increase your average transaction value and maximize your profits. Remember, the art lies in finding the perfect balance between providing additional value to your customers and respecting their purchasing decisions. So, take the time to analyze your sales funnel and identify opportunities to implement upsells and downsells effectively.
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