Oftentimes, people get stuck in the notion that when you’re down-selling, you’re losing profit. In this episode, Alex Mandossian gives out personal tips and strategies that he has used and continues to use that proves down-selling trumps upselling outside of retail. Alex shares in detail how this process works using his own success story as an example. He also incorporates the Power of Three into this strategy and how you can design your very own offer family.
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Profit Down-Selling Tips
Ethical influence is all about selling from the heart but making sure that you’re selling to the right person. If you don’t like sales, call it enrolling. In this episode, you’ll discover, number one, why downselling works faster, better and easier then upselling. Number two, you’ll discover why downselling is about designing the highest end offer you have first, not last. Number three is you’ll learn why downselling works with three price points in a single-family offer.
With Ryan Levesque
It was in late March of 2017 and I’m in my gym at my apartment complex. I got a call from my good friend, Ryan Levesque. He was going through security in an airport. He was on his way somewhere. I don’t know where he was. Maybe he was going back home. What I do remember is all the noise in the background. Somehow, he had gotten word about my PLUS Marketing Funnel.
PLUS is a four-letter acronym. P stands for Post, L stands for Launch, U stands for Upsell, and S stands for Strategy, put together, Post Launch Upsell Strategy. It was designed by me because before I had a launch with a former partner of mine, which failed. Because of PLUS, I got over a $1 million back and got to pay off all of the debt that the launch created and paid my joint venture partners who had been friends of mine and are still friends of mine for many years before and hopefully years to come.
What Ryan was about to embark on was a launch and I was going to be one of his joint venture partners. As it turned out, I was one of his top twelve joint venture partners and it was what we call the traditional PLF Formula Launch and that was designed by my friend Jeff Walker. He has a mastermind of his own, which Ryan Levesque has been a part of, along with other great marketers.
The PLF formula has been the de facto standard, the gold standard of many launches, whether it’s a summit or a launch where you have JV partners that are emailing for you or buying Facebook ads or whatever other forms of marketing and media sources that you use. When Ryan was describing his high-end offer, I had a problem because his launch was going to be a $19.97 offer, which was his first one, his first launch that he would do.
He would eventually do about $3.5 million. After all was said and done, it ended up becoming about $3 million. From the $3 million, he netted about 15% of that because after about $250,000 in JV prices, affiliate commissions, merchant account fees, and chargebacks and all the other things that are normal business practices within the launch process. He made about 15% profit, which is not a lot of profit for so much work, but yet you build your list.
He built a big list as a result of about two and a half weeks of work and about six months of preparation, videos, email follow-up and all kinds of phone sales that followed. I had a sales team at the time and I still do.
[bctt tweet=”Nothing is persuasive as the truth. ” username=”AlexMandossian”]
A former partner of mine and I partnered up to head off the process of creating Ryan’s post-launch upsell strategy, which meant about two weeks after his shopping cart would close, then it was time to offer a high-end product where anyone who said yes would get discounted the $2,000 they paid for the do it yourself program that they purchased, which was the ASK Method.
I came up with the ASK methodology back in 2001. He calls me the godfather of the ASK Method. He gives me too much credit. He has, I would say, the 3.0 version. His mentor studied with me, but his mentor Dr. Livingston is a lot smarter than I am as well. I’m in good company with people who are much smarter and yet still give me credit for being their teachers or godfathers within a certain niche. That’s not false humility. I’m telling you that from the bottom of my heart.
Telling The Truth
I do know one thing though, I know how to downsell. I do know that downselling is much easier than upselling because gravity is automatic. What you want to do is flip the funnel. You start high and go low. What Ryan described to me while he was going through TSA, which is the security here in the United States and the airport, he said, “I have a $35,000 Mastermind, and I have a $10,000 intensive.”
It’s the intensive I had been to already. He had invited me to go to the intensive and I had invited some of my sales team to go there as well. I had a problem with that. Ryan asked me why and I said, “$35,000 is not high enough. There’s not enough contrast to downsell. Going $35,000 to $10,000 is not enough.” I asked him, “Have you ever done a done for you ASK campaign for clients?” Ryan responded, “I did that in the beginning, but I don’t want to do any of those again.”
I said, “That’s okay. Have you ever done it?” He said, “I did.” I said, “What did you charge?” He said, “I charged $250,000 plus a piece of the profit.” I said, “That’s great. We’re going to offer it.” He says, “No. Alex, don’t offer it. I don’t want to do it anymore. I don’t want to do any client work. I need to scale my business.” I’m paraphrasing, but that was the spirit of the conversation.
Ryan, if you’re reading, the tip of the hat goes out to you and a deep bow. I’ve learned so much from you. I said, “I want to offer that to $250,000.” He said, “How can you offer it if I’m not going to make it available?” I said, “I’m going to offer it and then tell them it’s not available. You’re telling me that you’ve done it. You’re telling me that it’s indisputably and with absolute certainty, you’ve done it before and you have clients that you work with so we’re telling the truth.”
My friend, as you’re reading, nothing as persuasive as the truth. I tell the truth not because it’s the right thing to do or because, Carol Mandossian, my mother who still doesn’t know what I do, told me it was the right thing to do. I do it because I make more money by telling the truth, because you can smell a lie, can’t you? You can smell one. You can feel it. You can sense that someone is lying. I always tell the truth, candidly.
When we made our offer, we said, “You have three options and one is not available to you. The one not available is $250,000. For that, Ryan would do this and this. He would do everything for you, as done for you, but he’s not making that available anymore for this offer, but he is making his mastermind available.
His mastermind is $35,000 for the year. You will meet this number of times and the nice thing is, along with what you get,” and we described what they got for the mastermind and the community they would belong to. “You would also get his intensive at $10,000 at no additional cost. You would get it for free. If you didn’t want the mastermind option, which was the middle option, the done with you model, then the lowest end of the high end of downselling was $10,000. We would take away a few more things.
You can’t have this. You can’t have that. You can’t be part of the community, but you get three days and you’ll be at the intensive in Austin and this is all the things you get. That’s $250,000, $35,000 and $10,000.” Did it work? It worked gangbusters. We generated over $1.5 million and over the years, we’ve done it several times. We’re over $3.5 million.
The interesting thing is, for the first $1 million we generated in six weeks after the launch, the profit was 65%. Why? There weren’t all of the costs that the launch required. The launch got it off the ground. The launch generated the list. People got a rebate from the $2,000 they paid, they got the do it yourself version of the ASK Method for free.
If they got the $10,000 intensive, which less than 20% said yes to, then they would get $2,000 off. If they went for the $35,000 they would get $2,000 off. $2,000 away from $35,000 is $33,000. $2,000 minus $10,000 is $8,000. They already paid $2,000, now they’re paying $8,000 more. They got the do it yourself course for free, which is the model that I work within downselling.
Power Of Three
In the offer anatomy of downselling, you need to utilize the Power of Three. In previous episodes, I’ve talked about the Power of Three. There is power in three. Jab, jab, punch in boxing. Father, Son, Holy Ghost, Christianity. Too cold, too hot, just right. Goldilocks and the three bears.
There’s always power in three, whether it’s the three blind mice, the three wise men, there’s power in three. It’s easy as 1, 2, 3. I always start with the highest offer first and I want to make sure that there is an extreme discount from the highest to the lowest. You want to go high then go low because it’s easier than going low and then going high, especially with a virtual product which is being sold by phone or on Zoom, especially in phone sales.
In physical products such as in retail, let’s say women’s shoes, which you’ll learn about in episode 66. If you’re following on iTunes then you’ve ever gone to 66 before episode 65 which is Profitable Downselling Tips, 66 is about upselling. At AllSellingAside.com it is chronological, unlike iTunes. You’ll get it in order.
Upselling is going low to high and in retail that works well with a micro commitment. Let’s say you buy a shoe and then you want to get a belt, then from the belt, you get a purse, and then you get a different color pair of shoes of the same make and then a different color belt, different color purse. If you’re a woman and you’re reading, you know exactly what I’m talking about. If you’re a man married to a woman, you know what I’m talking about.
[bctt tweet=”Describe the entire offer family once but take away twice. ” username=”AlexMandossian”]
With shoes or with books or anything physically sold via retail, upselling works well. In the arena of virtual sales, downselling is much easier. I want to express to you what the power of the cumulative trio is. This is something I invented back in 2006. That’s a long time ago, by most accounts. Some people didn’t even get started on the internet until after that time. The cumulative trio is where you start high and you go low. I love the power of three.
The highest level is done for you level. For example, in my case, it’s a $100,000 offer. For that, there are a bunch of benefits and advantages that had over three dozen people come through that, believe it or not, in about three and a half years and then I stopped offering it because it’s a lot of work. It’s a one year program.
The middle offer is a done with you and I offer that all the time. I’ve had probably over 108 of these and that’s at $30,000. There’s a steep drop of 70% and it’s done with coaching. There’s a deep dive day, some people call it VIP day and then there are follow-up huddles. Do it yourself is the lowest and that’s usually a how-to course.
I have a client, she’s a $100,000 client, and she’s in pain management. Prior to meeting me, her highest offer, and she only sold one, was $5,500. Originally that was their highest. I came along and I said, “We’re going to start at $25,000, then our middle is going to be $12,000 and then your lowest is going to be $5,500.”
Within a few weeks, she sold two $5,500 offers which were her highest and she only has gotten one and I don’t even think that the client paid her the full amount. $25,000, $12,000, and $5,500 is easier than selling $5,500 outright. For me, it’s $100,000, $30,000 and $12,000. For Ryan, it was $35,000, 10,000 and $2,000, but then I went to $250,000, then $35,000 then $10,000.
I gave him the $2,000 thing for free, which was the topic of the launch. Why does downselling work well? Why is it faster, better and easier than upselling especially when you’re selling online virtually? When you design the highest-end offering first and it’s cumulative, meaning your highest-end offer, you already get the middle and the lowest end automatically. You get them for free. If you go for the middle one, then you get the lowest end offer for free. That is cumulative.
Most people don’t structure their offers that way. Why three price points, because of the jab, jab, punch or the power of three. You want the offer within the same family. Don’t offer them different things. It’s within the same family. For example, if it’s in digital marketing, which is what I offer or if it’s having an Amazon bestseller, which is also what I offer, $30,000 where we write the book. We do a Virtual Book Tour where I interview you and then you get Virtual Book Tour Secrets, a how-to course at no cost.
You get the virtual book tour, guarantee Amazon bestseller. If we don’t get the bestseller status, we keep going until we do. You get reviews. You get bestseller status in at least 1 to 3 Amazon categories. You show up everywhere. If the book is written for you, that’s $30,000. We should raise the price, but that’s what it is. If we do the Virtual Book Tour and I interview you, that’s $5,500, and then we do all the marketing and we guarantee bestseller status. If you don’t want that, then it’s less than $1,000.
$30,000, then $5,500, then $1,000, those are the numbers for the cumulative trio. There’s the Law of Contrast. Dr. Robert Cialdini who I’ve known for years, my good friend Joe Polish introduced me to him a while back. He says that the contrast principle is when the perceptions are formed in the human mind using comparison techniques and human judgment. I believe that humans are comparison creatures. We know what is associating and what isn’t.
I have a friend who says, “In the reptile brain, when the animal sees something bigger than it, then they run from it. If they see something smaller than it, then they eat it. If they see something along with the same size, then they mate with it.” He doesn’t use those words. It’s a lot funnier, but I’m not going to use that verbiage here.
If I introduced $35,000 with Ryan Levesque, it may seem like a lot but compared to what? When you compare it to $250,000 that’s almost 90% off, compared to $250,000 and it’s not available anymore, $35,000 for a mastermind and you get the $10,000 intensive for free, that’s not a bargain basement price but is it more appealing through the contrast principle.
Another advantage of selling is the takeaway concept versus the add-on strategy, which works well in retail, with upselling, with supersizing. Would you like a double shot in an airport if you’re going to get the alcohol? Would you like a double shot for $3 more? Would you like to supersize your Pepsi to a large? Would you like to supersize your popcorn? That would be in the movie theater. When we’re selling and the person is not physically there, the takeaway method works well.
In a cumulative trio, which means A has everything that B and C have in it as well, but you’re getting B and C for free. You only have to describe what A is because B and C are included. You only have to describe what’s in A because B and C are part of A. You’re getting them for free. A is the highest-end offer, B is the middle, and C is the lowest. For Ryan, A was $250,000, B was $35,000 and C was $10,000. For me, A is $100,000, B is $30,000 and C is $12,000.
If you describe A, you take time to describe it once and the psychology is that you describe the entire offer family once but you take away twice. If you say, “If A is not in your budget, then I got to take away this and that and you get B.” For me, it’s $30,000, which is called Clear Path Coaching. If that’s not in your budget, then I got to take away this and that and you get the do it yourself version and that’s $12,000 and that’s called group Clear Path Coaching. That’s what it is for me.
Alexism: Ripest Fruits
Describe the entire offer family once but take away twice. You take away once with the B and take away twice for C. The Alexism in this episode is this, “The ripest fruits on any tree are typically the hardest ones to reach.” They’re at the top. You’ve got to climb the tree, whether it’s coconut or a plum or an apple.
Here’s a review of the insights you and I rediscovered in this episode. They will only work if you make them work if you apply them. Will you do that? Number one, we talked about why downselling works faster, better and easier than upselling outside of the retail environment. We talked about why downselling is about designing your highest-end offer first and including your middle and lowest end inside of it. That’s called an offer family.
[bctt tweet=”The ripest fruits on any tree are typically the hardest ones to reach. ” username=”AlexMandossian”]
Number three, the insight was why downselling works with three price points in a single offer family like I’ve described with several examples. Remember, these insights will only work for you if you work them. Please make sure you execute what you’ve learned in this All Selling Aside episode. Go back and read it again because if you do, my friend, your future will be bigger, it will be brighter and most importantly, it will be created on your terms.
Speaking of reviews, if you have already given me a review on iTunes, thank you. Write down your biggest takeaway or a-ha moment you got from this episode on an index card and hold on to it so you can review it. If you haven’t given me a review on iTunes yet, please go to AllSellingAside.com/iTunes. Write your biggest a-ha. Write your biggest takeaway or pack my bag moment in the review section. That’s what iTunes asks for, a review.
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I have one final gift in honor of this episode and that’s a physical copy of my Amazon best-selling book, Alexisms, plus free access to the most reliable marketing funnel that triples your value of any physical offer that you offer for free, such as a book. You can experience it at MarketingOnline.com/book. That does it for this episode. I hope our paths cross again in the next episode.
This is the show dedicated to making you an ethical influencer so you can bring more certainty into your personal and professional life. Do whatever it takes to join me next episode because our topic is about profitable selling tips. On iTunes, you’d have to go up but at AllSellingAside.com you go down because it’s chronological. On iTunes, it’s reverse chronology.
I’m going to encourage you to invite a friend to that episode, invite a colleague or invite a study buddy. In fact, do that for AllSellingAside.com because it’s much more fun to learn with someone else and it’s a lot more effective as well. I can’t wait to connect with you then. It will be fun. You’ll love the episode. I want you to join us with your study buddy.