The MOST Effective Underused Sales Strategy

When potential buyers start walking away from a deal, most reps do one of two things. 1) They re-emphasize the value of their product. Or 2) they offer a discount. Sometimes it works. Sometimes it doesn’t.

But there’s a third option here too. And that’s down-selling. Down-selling is one of the most underutilized tools in a sales rep’s toolbox. And when you know how to do it right, it can mean a serious boost to your monthly earnings.

How to down-sell the right way so you can salvage more deals, boost your numbers, and bring in a fatter commission check.

Sound good? Then let’s go.

What Is Down-Selling?

What is down-selling anyway? Well let’s start with a definition we can all agree on.

Down selling is the art of strategically closing prospects when they are on the way out of the door.

When you down-sell, you close sales that otherwise would have gone to your competition. And when you down-sell, you’re getting deals done even if they are less profitable than what you would have liked.

It’s not ideal, sure. But it’s better than the alternative—no sale at all.

Now if you aren’t down-selling your prospects, you’re wasting all that time and energy you spent on winning the sale.

Think of it like this – not down-selling is like buying a show-bound pedigree puppy. You’re spending a fortune feeding, grooming, and training the dog. Driving them to a dog show, all happy and content that you’re going to win some awards… and then leaving them in the car as you watch in the stands.

You’re throwing it all away!

Clearly this would be bad for the dog, and you’ve wasted a lot of time and energy as well.

So make sure you’re down-selling the buyers who might get away.

Now let me give you a couple of examples of down-selling –

Examples of Down-Selling

Let’s say that you are selling SAAS (or software as a service) to the engineering industry. You might have multiple tiers of service that you can offer.

Say a buyer engages with you. So you then go through the entire sales process with them, and you know that they should be on your premium tier service. However, at the last minute, something changes within the prospect's organization, and now their budgets have been slashed in half.

At this point, you have invested considerable time into the deal. So with all that spent time and effort, it’s definitely worth down selling them on a different tier service so that you can still recuperate some of those costs.

Another example of down selling would be reducing your minimum contract length on a monthly service product and giving the buyer a little bit more freedom to leave if the service does not sue them.

Of course, you don’t want to start the sales process by offering discounts, pitching cheaper services, or making contract concessions. But if that’s what it takes to stop a deal going to your competitors, then sometimes biting the bullet can definitely be worth it.

So other than getting the deal done, what are the benefits of down-selling the buyer?

Benefits of Down-Selling

The biggest benefit to down-selling a buyer is that you build trust. When you show that you’re willing to work with an organization to implement your service at a price they can afford, you build trust in the organization. And that means once the deal’s closed, you can then upsell to help recoup costs.

Often called the “land and expand” approach to selling, this is often the best way to close very large service accounts.

When I was selling medical devices, I would often down-sell a customer in the first instance so that I could get a deal completed very quickly. Then I would sell larger deals into the account over time because they already had our company approved as a supplier within the procurement department, and they already trusted us to deliver on our promises.

The other major benefit to down-selling a buyer is that you manage to claw some revenue in that otherwise would’ve disappeared into the market. Although it might be disappointing for you to get the deal you want originally, down selling can often help cushion the blow and keep your commissions coming in strong.

And last but not least, it maintains customer retention. You don’t just have to use down-selling when working with new prospects. You can even use it on existing customers. If during an annual call, for example, your customer’s budget or needed features have changed, you can offer a lower-tier service to keep them around. Who knows, maybe their needs will change, and you can upsell them back up to a better package!

How to Down-Sell

Now last but not least, let’s talk about how to down-sell.

The process of down-selling is actually simpler than you might think. All you need to do is go into every sales conversation having a BATNA…

  • Best
  • Alternative
  • To a
  • Negotiated
  • Agreement

Negotiation researchers Roger Fisher and William Ury first came up with the term. And it’s basically your plan B in case your plan A of closing the bigger deal doesn’t work out.

Is there a lower-tier product that already matches up with 75% of your client’s needs? Come to the sales call with that information in hand. Got a finicky buyer that seems unwilling to commit to a long-term partnership? Work out how long you can shorten your contract with your employer first. That way you can come to a meeting knowing what you can offer before they run off.

See how that works?

Now it’s important not to discount at the beginning of the sales process. And don’t ever offer concessions on your service or contracts the first time a buyer asks for them. But always have a BATNA ready to down-sell your buyers if the original deal starts to fall apart.

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