Down-selling is a sales technique wherein a customer is suggested an inexpensive product when he backs out or exhibits signs of backing out of a purchase. The seller’s primary objective is to get the sale through, even if the sale brings in minor profits. Here, building a customer base and brand loyalty is more important than making money. For instance, a mobile phone seller may suggest feature phones or mid-range smartphones to a customer who believes flagship smartphones aren’t his cup of tea.
Generally, down-selling is far more common than up-selling or cross-selling in a weaker economy. However, marketing the less-premium items in a bad economy warrants a different type of sales pitch. Sellers must help buyers comprehend the value difference. The buyers must believe they’re getting a valuable item, which is priced low due to a weak economy scenario such as a recession.
The Right Way to Down-Sell
Down-selling must be considered only if one is very certain about the buyer’s inability to purchase the premium item. At times, it’s not just financial reasons but the customer may not know what to look for, or may not be sure of which item to side with when bombarded with options.
Though inexpensive, the cheaper product mustn’t be projected as an inferior item. The consumer must be convinced the sharp price decline is not fetching him a sub-par item and that the difference between the expensive and cheaper model in terms of features is marginal. For instance, Apple introduced the iPhone 5C for buyers who wanted a capable iPhone without the premium price tag.
Doesn’t Suit All
Down-selling may not be the ideal ploy for every seller or brand. Brands known for their higher prices and exclusive products risk diluting their brand image when down-selling. The down-sell activity, in such a case, must clearly differentiate itself from the brand’s otherwise premium image.