In the world of online marketing, businesses are constantly striving to optimize every aspect of their sales funnel. One of the most effective ways to improve the overall performance of a funnel is by implementing strategic downsell offers. A well-designed downsell can be the difference between losing a customer and converting a prospect at a lower price point. In this article, we’ll explore what an SLO downsell conversion rate is, what constitutes a reasonable conversion rate, and how to implement strategies to maximize your profitability.
Understanding SLO and Downsells
Before diving into the metrics, it’s essential to clarify some terms. SLO stands for Self-Liquidating Offer, a front-end offer that pays for your advertising costs or even turns a profit on the first transaction. Typically, SLO offers are low-priced products designed to attract leads while covering the cost of customer acquisition.
A downsell is an alternative offer that comes after a prospect declines a higher-priced offer (commonly known as the “upsell”). The purpose of a downsell is to capture the lead by offering them a more affordable option. While the goal of an upsell is to increase the average order value (AOV), the downsell is meant to ensure the sale doesn’t slip away completely.
What is a Downsell Conversion Rate?
The downsell conversion rate refers to the percentage of customers who accept a downsell offer after rejecting the original (usually higher-priced) offer. This metric is crucial because it reveals how well your downsell strategy is performing within your funnel.
For example, if 100 people reject your upsell, and 20 of them take your downsell, your downsell conversion rate would be 20%. This rate plays a critical role in determining how much revenue your funnel generates and how effective your overall customer acquisition strategy is.
What is a Reasonable Downsell Conversion Rate?
Determining a reasonable downsell conversion rate for your specific business can vary depending on several factors:
- Industry and Market: Different industries have different benchmarks. For example, in eCommerce, where price sensitivity is common, you may see downsell conversion rates ranging between 10-20%. In high-ticket sales, such as online coaching or consulting, the rate could be lower, as these products often involve more significant financial investments.
- Pricing Structure: The size of the price difference between the original offer and the downsell also plays a role. A downsell with a 50% lower price may convert more customers than one that is only 20% cheaper.
- Offer Relevance: A well-crafted downsell must still meet the prospect’s needs. If the downsell is less valuable or too different from the original offer, conversion rates will likely suffer.
- Funnel Positioning: How the downsell is presented within the funnel matters. Timing, copywriting, and the emotional state of the prospect all affect conversion rates.
That being said, a reasonable downsell conversion rate typically falls between 10% and 30%, depending on these Lifestyle write for us factors. If your rate is below this range, it may indicate that your downsell offer needs tweaking. Conversely, a rate above 30% could mean your original offer is priced too high or your downsell is too attractive compared to the primary offer.
Strategies to Improve Your SLO Downsell Conversion Rate
Now that we’ve discussed what a reasonable conversion rate looks like, let’s dive into actionable strategies for improving your downsell conversion rate. The key is to ensure that your downsell offer feels like a natural, valuable extension of your original offer while still being attractive in terms of pricing.
1. Make the Downsell Offer Directly Related to the Original Offer
A common mistake businesses make is offering a downsell that doesn’t align with the needs of the customer. If your primary product is a digital course, your downsell could be a cheaper version of that course, a workbook, or templates that complement the original offer. The more closely related the downsell is to the customer’s reason for rejecting the upsell (usually price), the more likely they are to convert.
2. Price the Downsell Strategically
Pricing is critical when it comes to downsell offers. You want the downsell to be affordable enough to make a difference, but not so cheap that it devalues your original offer. A good rule of thumb is to price your downsell at 30-50% of the original offer. For example, if your main offer is priced at $100, your downsell could range between $30 to $50. This price point should feel like a significant reduction in cost while still maintaining perceived value.
3. Use Scarcity and Urgency
Incorporating scarcity and urgency into your downsell offer can help improve conversion rates. A limited-time offer or a countdown timer can create a sense of urgency that encourages prospects to take action. Make sure that the scarcity is authentic, however. Artificial scarcity can backfire and damage trust with your audience.
4. Simplify the Decision-Making Process
When a customer declines your primary offer, they are likely experiencing decision fatigue. You can improve downsell conversion rates by making the decision to accept the downsell as easy as possible. Use clear, concise language and emphasize the benefits of the downsell without overwhelming them with too much information.
5. A/B Test Your Offers
A/B testing is one of the most effective ways to optimize any part of your funnel, including downsell offers. Try testing different variations of your downsell, including the price point, offer structure, and messaging. Over time, you’ll be able to determine which combination resonates best with your audience and leads to higher conversion rates.
Conclusion
A well-executed downsell strategy is a powerful tool for increasing revenue and reducing lost opportunities within your sales funnel. By understanding what a reasonable downsell conversion rate is for your business, you can set realistic expectations and continuously refine your funnel to maximize profitability. Remember, the key to an effective downsell is to offer value, simplify the decision process, and strategically price your offer. With consistent testing and optimization, you can improve your downsell conversion rate and ultimately increase your bottom line.
