Feature-downsell customers before they cancel

1. What it is

A feature downsell lowers the price by changing what the customer gets: less quantity, lower quality, a cheaper alternative, or an optional part removed. Unlike the payment plan, this one really does lower the price.

Every feature carries a price and a value. Take one out and the price goes down, and so does the value, so which feature you remove and how much you take off decide how good the new deal looks. People set the money they save against the value they lose, and they tend to see the value of what went once they see the price gap. Remove things they dislike and cut the price hard, and they get a great deal and take it. Remove things they love and cut the price a little, and more of them sell themselves back up to the original; you may get more people onto the expensive offer this way.

The move is simple: take something away, lower the price, and ask, how about now?

The feature list you cut from, and how to build tiers out of it, is SOP 72 — Generate tiers and downsells from the quality vectors.

2. One case

One business owner reported that last quarter he had lifted his close rate threefold, from 25 percent to 75 percent, without a payment plan or a discount. He had taken a feature out: his guarantee. His offer was $4,000; to people who said they could not afford it he offered it for $2,000 without the guarantee. Seeing what the guarantee was worth, many bought the full offer after all. Out of 100 prospects, 25 had bought the expensive offer before; afterward 35 bought it and 40 more bought the downsell.

The $2,000 is a stand-in figure; the price that owner actually dropped to is Not established on this page. Section 3 works the same step at 3,500.

3. The order of the cuts

1. First cut: something valuable, for a little off. Remove a feature the customer prizes and lower the price only slightly — in the illustration, the guarantee comes out and the $4,000 offer goes to 3,500. Because the gap is tiny and the loss large, they say no, I'd rather have this: the first downsell exists to make them reconsider your first offer.
2. If they say no to that: put it back, and cut something they do not care about for a lot off. You might now be looking at a real price problem, so the next feature removed typically comes with a big price drop. Less of what they do not care about, at a much lower price, is the best deal for them.
3. Keep going. Continue removing features and lowering the price until they buy. Somebody getting something beats somebody getting nothing.

Start with the guarantee. The tip given is to feature-downsell the guarantee: remove it for a tiny price cut, and many people sell themselves back up.

Standardize the order. At first you will not know what your customers value most. As you solve the same problem for the same kind of customer, learn what they rank highest. If most of them rank features the same way, you can remove features in a fixed order, the way the owner in section 2 knew the guarantee drew the most takers. One way to learn the ranking is to ask customers which item on your list would bother them least to lose; running that survey is SOP 131 — Run the keep-one and remove-one survey.

Flag: a lesser offer after a no.

• This page: after a no, cut features and price until they buy; in the case in section 2, more people bought the full offer after the change, and others took the downsell as well. The cost, as SOP 228 counts it: reps holding a cheaper option reach for it at the first price resistance.
• SOP 228, section 9: a qualified prospect who does not buy the main offer is not sold something lesser; in its case, a cheaper offer kept in reserve cut main-offer sales by 20 or 30 percent. The cost: a buyer who would have taken a cut-down version leaves with nothing.

This page does not settle which reading is right.

4. Stay the helpful guide

Never negotiate the price. Keep the position of somebody helping them find the best deal for them. You get unlimited shots on goal with a customer as long as you remain helpful: totally understand; let's see if we can find something that works for you. Nobody is offended by that. An ultimatum — if you won't do that, do this — feels a little off, so keep the frame of looking for something that works for them.

5. Check that they still want it

If you make two changes in a row and they still refuse, stop and check they want the thing at all: on a scale of one to 10, how badly do you want this?

• If they say 8 to 10, you will find something that works for them.
• Short of 10, you may need to reconfigure the offer again, or switch to different payment terms.

Eight to 10 continues, and eight or above starts the payment-plan downsells, crossing back to SOP 70 — Work the payment-plan downsell ladder, where the lower scores pivot to a feature downsell.

When somebody likes a combination of features but still not its price, move to payment terms. Ask whether they cannot afford it in general or cannot afford it today. If it is today, the suite is right and only the timing is wrong, which is where a payment plan is very effective.

6. Close each step with a question

After each downsell, ask deal? or fair enough? You are in a kind of barter: they want the thing, you agree to meet their terms by removing something, and they meet your price in return. Let me make this work for you. Then: if we changed this, would that work for you? Does that sound fair? People find it hard to refuse reciprocity. Do it two or three times and saying no starts to feel unfair to them.

7. The do-it-yourself version and the free orientation

When somebody has refused the service in every form, you can sell another product that solves the same problem. A free orientation makes that easier. Tell them that even though you will not be working together you still want to help, and invite them to a free orientation the next day. At the end, offer the do-it-yourself product at a lower price. A painter could run an orientation for homeowners and could end it by renting out spray machines by the day, with buckets of paint: another version of the offer that takes little of your time and still pays.

8. Price plus barter: lowering the price without cutting anything

There is one exception to never lower your price: you can lower it without changing what they get if you change what they give you. A customer says they cannot pay more than $400 for a $500 offer. You agree, on terms: reviews on every site you name, testimonials, a daily post, and two referrals introduced right now. You have traded $100 of price for what is hopefully worth more to you than $100 of advertising.

The terms protect you. When a member paying $600 asks why another pays $400, offer them the same deal — she cleans the gym every day, introduced three friends and posts on Facebook every day. In the case given the answer was I'll keep the 600. There is always something a customer can do for you, and most of the time it takes the form of advertising: reviews, testimonials, referrals.

9. Before they cancel

The same move works on people who have already bought. Across a group of companies, the service segment with the second-highest lifetime value turned out to be a low-to-mid-priced one, although the highest value typically comes from those paying the most. Its churn was very low. These were customers the companies had contacted first: you're only using four of the six services — did you know you can get those four at this lower rate? On being moved down, those customers never left.

The common instinct is to keep billing them as long as you can; the advice is the opposite. The reasoning given: people who stop using what they pay for cancel much faster. That is said to be backed by a large body of data on the gym side and believed to hold for every business. Matching the price to what they actually use keeps them, and the customer reads it as honesty — they asked me to pay less. They go from I might cancel, I'm not using some of this to praising you, because you raised it first. You can make the same offer on the call where they ask to leave, as a last chance, but the goodwill comes from reaching out first.

The signal to reach out. A customer who is still subscribed but no longer uses the product is showing an early sign of leaving. Somebody on an annual contract who stops using the service at six months is likely to leave; intercept them when they stop and get them using it again, and it is likely they stay. Gym attendance showed the pattern week by week:

Week	Heading out	Rescued
1	3 sessions	3 sessions
2	2 sessions	2 sessions — reach out
3	2 sessions	3 sessions
4	1 session	3 sessions
5	Cancel	3 sessions

Members who came three times a week or more stayed; talk to them the moment attendance drops to two and you could rescue them. When customers stop consuming, contact them more and more often. Scoring every account each week, so slips like this are caught early, is section 3 of SOP 273.

Flag: the lower threshold. It is given as less than twice a week and as twice a week or less; the rescue point in the pattern is two sessions. Not established on this page which is meant.

If you can keep the value customers get above the price they pay, they stay. There are two ways: give more value, or lower the price. The first is preferred. The feature downsell is the second, used where the customer has stopped taking the value you charge for.

10. What this page does not decide for you

• How much to take off at each step. Small at first, large after; this page gives no figure for the steps beyond the illustration.
• Which features your customers value most. Learned from your own customers, not stated.
• When usage has fallen far enough to act. Given only for gym attendance.

11. The checklist

Step	What you do
The move	Take something away, lower the price, ask how about now
First cut	Something valuable, a small price drop
Second cut	Restore it; remove something they do not care about, a large drop
After two refusals	The 1-to-10 check
Likes the features, not the price	Payment terms, SOP 70
After each step	Ask deal, or fair enough
Refused every form	A free orientation, then the do-it-yourself version
Only price cut allowed	Price plus barter: reviews, testimonials, posts, referrals
Current customers	Offer the lower rate for what they use, before they ask to cancel
The trigger	Usage falls while the subscription continues

12. What this page does not cover

The vectors and tiers you cut from are SOP 72 — Generate tiers and downsells from the quality vectors, and the rules for every downsell are in section 8 of SOP 70 — Work the payment-plan downsell ladder. Trials that carry conditions are SOP 71 — Run a free trial with a penalty. What to do when a customer asks to cancel — the terms, the fee and the exit interview — is SOP 76 — Design cancellation terms and the waived-fee offer, and the call itself is SOP 132 — Run the cancellation call. How to find the moment a customer first gets value is SOP 129 — Derive the activation point.

Consumer-protection rules on changing a subscriber's plan are not covered on this page.