What is a Downsell?
In short, a downsell is when a seller offers a lesser and more affordable product or service when a customer is hesitant to purchase.
It is a great way to get fence-sitters to take action and make a purchase and has proven to be very effective at increasing sales.
According to a study done by Splitit, 35% of consumers are more likely to make a purchase if a site offers monthly installments as a payment option.
If you think about your everyday shopping experiences, you would realize that downselling is used constantly to encourage customers to complete the sale.
A few examples:
- A store clerk offering an exclusive discount or a payment plan to help the customer who is on a budget.- Removing bonus features of a product as a way of dropping the price.
- Offering an alternative product that is more affordable to the customer but equally valuable.
A downsell can also be used to describe the overall consumer use of a product, which can affect its value.
For example, if someone sells you a phone for $500 and then the next day you decide to list it again at $350, this would be considered as a downsell because someone else bought it before you.
This is because the value of the item dropped due to it being used previously by another consumer.
The same applies to any other type of asset such as cars, houses, etc.