They’re two of the most effective strategies for increasing the AOV of e-commerce stores and generating more revenue.
And given that the odds of selling to an existing customer is 60-70 percent, while the odds of selling to a new prospect is only 5-20%, it’s easy to see how big of an impact these techniques can have.
But one strategy you may not be so familiar with is down-selling.
Simply put, “Downselling is the technique of offering a more budget-friendly alternative to the product or service initially considered by the customer.”
It’s an approach that’s used when a shopper has clearly shown that they’re not interested in buying the initial product you’re offering because of the price.
In other words, downselling is basically an attempt to salvage the situation and offer a cheaper alternative in hopes of getting a shopper to make a purchase.
Although it won’t result in a shopper purchasing the product you’d ideally like them to buy at the price point you want, they’re at least still buying something.
I’m personally a big fan of downselling, and when done right, it can have a positive impact on your AOV, while at the same time improving the customer experience.
Here are four of my favorite e-commerce downselling examples from brands that have totally nailed it and that you can learn a lot from.
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1. Offer a Product at a Lower Price (Nectar Sleep)
Let’s start with the basics—giving shoppers a deal where they pay less for a product than the normal asking price.
This is the most straightforward of the e-commerce downselling examples and one that can be highly effective. And that’s the approach that Nectar Sleep, an e-commerce brand that sells ultra-comfortable mattresses, takes.
Here’s the deal. They’re in a super competitive niche and have big-name contenders like Casper and Purple Mattress vying for customers.
So, they’ve had to get creative and find effective ways to grab the attention of their shoppers. Besides offering a risk-free 365-night trial to test out their mattress, they also strategically use downselling to persuade shoppers to buy.
Take, for instance, their queen-sized mattress.
It normally sells for $1,198. And while many people will agree that the level of quality you get with a Nectar Mattress justifies the steep price tag, it’s still a significant investment and one that many people will have difficulty getting on board with.
Rather than saying “take it or leave it,” Nectar currently has a deal where they’re offering the queen-sized mattress at a discount of only $799.
Of course, they would rather have someone pay full price, as it’s going to lead to higher profit margins. But like I said before if a shopper just isn’t willing to do that, offering a discount like this is the next best thing.
Not only should it have a positive impact on conversions and give you a better return on your sales and marketing efforts, but it can also potentially lead to additional purchases.
For instance, Nectar customers may buy bed frames, bedding, or pillows. And while you don’t necessarily want to instantly slash prices on every single product you have (in fact, that’s a terrible idea), strategically downselling at the right time can greatly benefit your bottom line.
If you’re finding that a large percentage of your shoppers are interested in your brand but just can’t quite get over the hump, offering a product at a lower price is certainly an avenue worth exploring.
2. Offer a Trial at a Discount (Rent the Runway)
There are several subscription fashion brands that let shoppers rent clothing. But one of the most notable and successful is Rent the Runway.
They’re one of the true innovators in this niche and are a brand we compliment quite frequently on the Sleeknote blog. They also have one of the best e-commerce downselling examples I’ve come across.
Rent the Runway has a few different membership plans where customers can pick a certain number of items per month.
For example, there’s a plan where customers can get up to 4 items per month for $89, a plan where they can get up to eight items for $135, and a plan where they can get up to 16 items for $199.
This is great for giving their customers plenty of flexibility so they can find the clothing they love at a price that fits their budget.
Note that they also offer a discount trial month where shoppers pay considerably less than they would normally, which is a great technique for generating initial interest.
But Rent the Runway takes it one step further by having exclusive offers like this one where they give $100 off a 60-day trial.
Rather than paying the normal $159 a month, which would be Rent the Runway’s ideal plan, they offer a hefty discount where a customer only has to pay $50 a month during their trial.
The idea here is to sway shoppers who have expressed interest in joining Rent the Runway but who have reservations about paying the full price to go ahead and sign up.
Although they won’t get the same revenue that they would if someone signed up for a regular plan, they’re still able to generate some revenue.
And assuming the customer likes their products and the overall experience, there’s a good chance they’ll continue and pay the regular price once the trial expires. It’s all about playing the long game.
This is a technique you can replicate with your own e-commerce store. Just come up with a trial offer that’s attractive enough to pique the interest of shoppers and deliver an awesome experience.
As long as you do that, a good chunk of customers will stay with you and will be willing to pay full price on future purchases.
3. Offer a Payment Plan (David Yurman)
The next of my e-commerce downselling examples is specifically for brands with high price points.
Say you sell expensive products like luxury jewelry or watches, and your UVP is that you carry high-end goods that most of your competitors can’t offer.
This can be very profitable and lead to high margins.
However, it can also make it more challenging to get shoppers to commit to an initial purchase.
So, how can you get around this and get people who are reluctant to make a big purchase to take the plunge? It’s simple. Offer a payment plan where shoppers can make lower monthly installments.
Here’s a great example from high-end jewelry and watch company David Yurman.
When a shopper first starts browsing through their store, it quickly becomes clear that most of the products are pretty expensive.
But let’s say that a shopper is interested in a product like the “Chatelaine Pavel Bezel Ring in 18K Rose Gold.”
So they check it out.
It’s definitely a stunning ring, and it’s obviously high-quality. That said, it also costs $5,800. Yikes! And that would likely deter a good percentage of shoppers from buying it outright, especially in this economy.
But David Yurman uses downselling by allowing customers to apply for a payment plan. Instead of having to pay $5,800 upfront, a customer can pay as little as $268 a month.
When they click on this section, they’re taken to a page where they get a full rundown of monthly payment plans.
Although the ideal outcome for this e-commerce brand would be to make a straight upsell, this form of downselling is the next best thing.
I like what Skip Foster of EasyWebinar has to say about this strategy.
“A workaround to having too high of a price point is to offer payment plans. This way, more people can get started quickly but it’s also affordable for them.”
So, if you sell high priced items, this form of downselling can be hugely beneficial
4. Offer a Free Resource (BOOM by Cindy Joseph)
Most downselling strategies involve offering an alternative version of a product at a lower cost.
However, this isn’t the only path you can take, and sometimes it makes more sense to offer a free resource in exchange for a shopper’s email address or phone number.
Then, you can send them targeted content either through email or text to nurture them and include other product offers once you’ve built some rapport.
And that’s exactly what cosmetics brand BOOM by Cindy Joseph does with this e-commerce downselling example Here’s the homepage that shoppers first see when landing on their store.
Now let’s say that they spend some time browsing and check out a few products like the “Boomstick” line.
They have some level of interest and check out one of the items like the “BOOM Bag” in detail.
However, they’re just not quite ready to drop $321 on it. Even though their interest has been piqued, they decide to go ahead and exit the site.
At that point, they see this exit intent popup, offering an eBook on Cindy’s 10 best makeup and beauty tips for women over 40.
All they have to do is enter their email address, and they can download the eBook instantly for free.
Although BOOM by Cindy Joseph isn’t able to make the $321 sale, which would be the ideal outcome, they have a good chance of keeping the shopper in their sales funnel.
This, in turn, gives them a chance to develop a relationship and nurture the shopper through email.
That way they can suggest the BOOM Bag again later on, as well as other targeted products the shopper may be interested in. And who knows. In the long run, the shopper may end up buying multiple products that exceed the $321 they didn’t spend on the BOOM Bag.
It could also potentially lead to referrals if the shopper has a positive experience and shares the brand with others.
Taking this approach where you offer a free resource in lieu of buying a product is another example of playing the long game and is definitely something to consider.
It just boils down to creating an enticing resource that offers real value and building an exit-intent popup for it — something you can do with Sleeknote.
One Last Bit of Advice
At this point, you should have a good idea of what downselling is, and hopefully, these e-commerce downselling examples have given you some ideas and inspiration.
But there are two last points I want to make to ensure you’re successful with your efforts. The first to not go crazy with downselling and make instantly offering massive discounts your default.
“A downsell is most appropriate when you realize a client is not going to buy what you’re currently offering,” writes marketing teacher Ian Brodie.“Don’t introduce it too early—it may be you just need to work through some objections to confirm the original sale.”
Rather, it’s something you’ll want to sprinkle in here and there to get “on the fence” shoppers to take action.
One of the easiest ways to do this is to only show offers after a shopper has viewed multiple pages of your site, spent a few minutes on your site, added an item to their cart but tries to exit without completing the purchase, and so on.
My second point is that e-commerce downselling is something you’ll want to continually test until you get it just right.
For instance, you may want to:
- Experiment with different price points
- Experiment with different lengths of browsing sessions before giving a discounted offer
- Test out offering different free resources to see what shoppers are most receptive to
As with most types of sales and marketing, the more data you have the better your decision-making will be.
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Let’s be clear. Downselling isn’t the ideal e-commerce strategy. Upselling and cross-selling are usually preferable because they’re going to maximize your immediate revenue.
That said, downselling can definitely be a smart move and one that helps you convert more shoppers and increase your AOV long-term. It just boils down to using the right downselling approach and fine-tuning it over time.
Do that and you’ll be poised to bring in way bigger profits and boost your brand equity.
Which of these e-commerce downselling examples are you most interested in trying, and why?