UPSELLING

Upselling is a sales technique whereby a salesperson induces the customer to purchase

more expensive items, upgrades, or other add-ons in an attempt to make a more
profitable sale. Upselling usually involves marketing more profitable services or
products, but upselling can also be simply exposing the customer to other options he or
she may not have considered previously. Upselling implies selling something that is more
profitable or otherwise preferable for the seller instead of, or in addition to, the original
sale.

A different technique is cross-selling in which a seller tries to sell something else.

In practice, large businesses usually combine up-selling and cross-selling techniques to
enhance the value that the client get from the organization in addition to maximizing the
profit that the business gets from the client. In doing so, the organization must ensure that
the relationship with the client is not disrupted

If you and your employees aren’t trained on effective ways to upsell, chances are you
either offend customers by being too pushy, or leave money on the table that customers
would have willingly spent with you. Either option is costly.

Upselling refers to when you help a customer decide to buy a little extra or “up-grade”
slightly the final purchase. A car dealer, for example, might inform customers at the time
of ordering about upholstery protection and undercoating. A shoe salesperson might
suggest that when you buy a pair of shoes that you also use some weather protestant
spray. These are usually small purchases that the buyer doesn’t have to put a lot of
thought into. The bonus is they can be extremely profitable for you as the sales person
and for your organization.

The 3 biggest mistakes in upselling:

1. No attempt is made to upsell.

2. The salesperson comes across as being pushy
3. The upselling is made in an unconvincing manner so the customer generally refuses.

Effective upselling strategies:

1. Assumptive is the key. You’ve got to assume that the customer will naturally want
this. Begin the upsell with a brief benefit, and then if possible, add something unique
about what you’re selling. To avoid sounding pushy, particularly if the upsell requires
some elaboration, ask for the customer’s permission to describe it.

Here’s an example of the wrong way to upsell. Imagine dining at a restaurant where
you’ve just finished a big meal. The server asks, “Would you care for dessert? If you say
“Yes”, you might give the impression of overindulging. So many customers refuse out of
politeness. Result - no sale.

So the savvy server doesn’t ask if the customer wants dessert. The professional just
assumes that when people go out for a meal they are treating themselves. So of course
they’ll want to treat themselves to dessert. In this case, the server pulls up the dessert tray
and says, “To finish off your meal with a little something sweet, (that’s the benefit) I
brought the dessert tray over for you. Would you like to hear about the most popular
ones?” (Asks permission to proceed)

When the customer agrees to hear about the desserts the server doesn’t just list them by
name; he describes their benefits. So rather than saying, “This is chocolate mousse.”
Instead he’d say something like, “If you like chocolate you’ll love this. We’ve got a
chocolate mousse that melts in your mouth and makes you wonder what the ordinary
people are doing today.”

2. Focus on customer needs-not yours. Don’t try to sell the customer something you
wouldn’t buy if you were in their shoes. It is totally irrelevant whether or not this
purchase suits your needs; what is relevant is whether it suits the customer’s. That
perspective empowers you to upsell effectively and with integrity.

3. Hands on demonstration. One of the most effective upselling techniques is getting

the customer to use the product in your location. A hairdresser, for example, might put
hair gel in the customer’s hand and show them how to apply it themselves. By showing
the client how to get the salon look at home, they create a value-added upsell.

4. Group related products or services. It’s a good idea to group similar add-ons and
offer them as an upsell at a package price. If someone is getting a haircut and you talk to
them about shampoo, it only makes sense to show them a package deal that groups
conditioner and shampoo at a package price.

5. Sell first and tell later. Never, ever attempt to up-sell or cross-sell until you have all
the information necessary to fulfill the first order. In our rush or excitement to up-sell we
sometimes forget that the customer has an order to place. Selling additional items too
early in the call might turn the customer off. You could lose the original sale.

6. The rule of "25." The value of an add-on sale should not increase the overall order by
more than 25%. For example, if the original order is $100.00, you should be cautious in
your attempts to exceed that order by $25.00. Despite the fact that people are motivated
to buy, they still have a mental limit as to the amount they will dispense. For whatever
reason, that figure rarely exceeds 25%. Generally, going above that value is only
marginally successful.

7. Make a profit. This is more of a management, rather than a salesperson decision, but
the whole point of the exercise is to make money. The item(s) you choose must make
enough profit to at least cover the cost of the additional time you spend on the phone.
One source I've read claims that you must show at least a $4.00 profit on each add-on
sale.

8. Don't dump junk. There is, on occasion, the urge to use cross-selling and up- selling
to move unwanted inventory. This in itself is okay provided the customer isn't saddled
with useless or defective products. If you are clearing stock that won't be replaced, let the
customer know. If it is a discontinued line, don't hesitate in letting the customer know. If
you don't, you'll be sorry later.

9. Limit and relate. Limit your choice of add-on items to those that clearly relate to the
original purchase. If a customer were buying a blazer he has seen in a catalogue,
suggesting a shirt and a tie makes sense. Suggesting a goose-necked garden hoe,
however, does not.

10. Familiarity breeds success. The more familiar your customer is with the add-on
item, the more likely he or she is to buy. Cross-selling and up- selling is not the time to
introduce a brand new product, unless the price is unusually low (Refer to #3.) New
products take time to sell using features and benefits. This will take additional time. The
purpose of the up-sell is to increase the order while the buying motive is strong.
Introducing something unfamiliar will only confuse the customer.

11. Plan, plan, plan and plan again. Again, likely a management issue, but your life
will be much easier if the program is well planned and implemented. For instance, not
only must you decide which products to sell, you must determine what product(s) they
relate to. So, if you are going to up-sell with ties, you've got to decide, in advance, which
blazers they will match.

12. Train to avoid pain. Ensure that you are trained on the products or services offered.
Make sure you understand them. Rehearse the skills necessary to get the customer to say
"yes." One catalogue firm spends 40 hours on training designed to demonstrate how a
particular add-on applies to and benefits the customer.

13. Test with the best, then roll with the rest. Okay, another management issue that
you might want to make your manager aware of. Test your cross-selling and up-selling
with your best people. They have the drive and initiative to work out any of the kinks.
Introduce the cross-selling and up-selling program to the rest of the sales reps only after
you are sure of the test results.

14. E=MC2.
Your cross-selling efforts (E) will be directly dependent on how motivated (M) you are.
Cross-selling and up-selling takes additional time and effort. If there is no reward ... if
you are not motivated ... chances are the program will not be a rip roaring success.

Compensation (C) is always a critical factor in selling and perhaps more so when you are
asking for that little extra with each sale.
The other C stands for Control. Whether you are a sales rep or a manager, the ability to
control the direction of the cross-selling and up-selling activities will determine success.
In other words, measure your productivity, your performance and your profitability. If
there is something lacking in any one of these areas, make changes.

15. Work well with this: product works better with complimenting items, be sure to tell
customer about it.
16. Little worked, a lot will work even better: after you learn that customer like your
product, offer them a good deal. Example offer a deal on purchase of six soap bars.

PREPARATION BEFORE UPSELLING:

1. Know your product
2. Figure out what guest have bought
3. Develop new options ( product, installation, maintenance)
4. Plan in advance

UPSELLING IN HOTELS

If a hotel manager reviews previous occupancy trends and finds that many of the nicest
rooms are not being rented, it would be reasonable to ask “why?” To sell the average
rooms while letting the best rooms remain vacant is, so to Speak, not “putting the best
foot forward.” In addition, there are several dollars of incremental revenue that are not
Being realized. While there are many strategies to reverse this trend, the check-in process
is an important place to begin. The guest Registration process offers an excellent
opportunity for upselling to higher-priced, nicer accommodations for several Reasons:

• Guests may not be aware that other room types are available, especially where the
reservation was made By a third party, such as a travel agent or secretary.
• Reservation agents may have failed to mention the availability of upgrades, or failed to
provide an adequate Description that conveyed the value of the upgrade.
• Guests who may have declined the option of an upgrade when calling in advance might
reconsider at the Point of purchase. Business travelers might have an unexpected need for
additional work space or to conduct a Small meeting in a mini-suite or concierge level
lounge. Leisure travelers might decide on impulse to reward themselves with luxury after
an especially stressful day of travel.

FRONT OFFICE UPSELLING

Why train front office staff upselling?

As Front Office staff personally greet and check in each guest, they can do more than
provide courteous and efficient service. With proper training and incentives, they can
learn to identify guests' unmet needs and suggest solutions that result in increased
revenue for your hotel. In the process, employees gain job satisfaction and learn to take
pride in their work.

Benefits:
To employee:
 No sale, no customer , no jobs
 To encourage customer to come back- job security
 motivation
To guest:
 Guest satisfaction
 Value for money
 Friendly and helpful staff
Hotel:
 Increase room revenues
 Improve employees'

METHODS OF UPSELLING

TOP DOWN METHOD: in this method the most expensive product is suggested first to
the customer, and then gradually next less expensive product is suggested.
BOTTOM UP METHOD: this method is applied when the guest ask for the cheapest
product on the rate list. This method suggest that the least expensive product is suggested
to the guest first and then next product is gradually suggested to the guest explaining
them the benefits or the additional features , gradually climbing upto the most expensive
product.

Here are important considerations for the successful implementation of an upselling

program:

1. Methods and techniques for upselling at registration

• Re-confirm the pre-reserved accommodation. Reassure the guest that a nice room is
already assigned. “Mr. Johnson, we have confirmed you in one of our ___ rooms, which
I’m sure you will find quite comfortable.”
• Probe to find out if the guest is aware of available upgrades. “Did your (travel
agent/secretary) have a chance to tell you about our ___ rooms?” “May I ask if you are
familiar with our ___ rooms?”
• Present the availability of upgrades as a unique opportunity. “We’ve had some of our
___ rooms become available this evening…” “We’re offering a special rate to help
familiarize our (repeat or first time) guests with our ___ rooms.”
• Utilize incremental sales techniques. “For only $25 more, I can offer you one of our ___
rooms which includes continental breakfast and free use of the exercise room.”
• Mention higher rates to position lower rates as being a good value.
“These rooms usually cost $___, but because of (a special circumstance) I can offer you a
special rate of
$___.”

2. Structuring rates so that an upgrade is a reasonable value. Most properties market

a range of rates to various market segments. However, in many cases, groups, high-
volume accounts, or guests participating in special discount programs are only offered
their special rate for the least expensive room type. Upgraded accommodations, (i.e.
mini-suite or executive floor) are offered exclusively priced at rack rates. The end result
is that the additional investment required for these guests to upgrade does not justify the
value received. For example, if the rack rate for a regular room is $100 and the rack rate
for an executive floor room is $135, the hotel is asking only for an additional $35 for the
upsell. However, when a special corporate rate of $79 is offered for the regular room, the
hotel is now asking the guest to invest an additional $58 for the executive floor. This may
not reflect the added value of the upgrade. To work around this, many properties are
implementing a “flat charge” system for selling upgrades. Regardless of which rate
category is appropriate for the guest, he/she is given the option of upgrading for a flat
charge. Whether it’s a corporate, group, government, or promotional rate, the upgraded
room type is always a good value for the guest and the property benefits from the
additional revenue.

3. Recognition and incentive programs

A key ingredient in any upsell program is implementing a staff recognition program at
the front desk. This is usually an easy incentive program to get approved by management
since upsells clearly add revenue to the bottom line. The most basic incentive programs
reward individual associates for each upsell with either a pre-determined dollar
amount or with points that are redeemed for prizes. (Cash incentives should be paid
separately to help differentiate rewards from base salary.) Other alternatives are team
incentives where everyone who works a given shift is rewarded equally for upsells that
occurred on their watch. Regardless of which incentive program is selected, it is
important to post the results in a public area on a daily basis. This helps spark the
competitive spirit that exists in everyone, not to mention reminding all associates of the
rewards being earned by the top performers

Discounts:

Discount means, deduction from the nominal value or price of anything for payment
before it is due or for prompt payment. It also means deduction from the amount of bill.
When we talk of the term discount with relation to sales, this can be called a selling
technique. Conference, tour and travel agency business is chased to increase the
occupancy of the rooms particularly al low business times. Discounted rates of many
types are offered to achieve maximum possible profit.

Various Discounted rates offered by a hotel are:

1. Package Rates: It covers all expenses of accommodation, food, transportation,
sightseeing, entertainment, etc. These are normally for a fixed period of time, e.g. 4 days
and 3 nights.
2. Group Rate: Groups are given special discounted rates. A group of 15 – 30 pax is
given one complimentary room for the Group Leader; a group of 30–45 pax is given two
complimentary rooms and for bigger groups the number of complimentary rooms
provided depends on the management of the hotel.
3. Company Guaranteed Rates (CGR): Companies which give regular guaranteed
business to the hotel are given discounts.
4. Promotional Rates: For publicity and promotion special discounted rates are offered
to CIP’s. These discounts are authorized by senior staff members.
5. Off Season Rates: Resorts usually have separate tariff for peak season and off season,
the off season rate being much lower.
6. Staff Discount: In chain hotels, employees may be given discounts on room rates for
hotels belonging to that chain. This is given on space available basis.
7. Airline Crew Discount: For their crew members, airlines are given a fixed discounted
rate.
8. Crib Rate: Reduced rates are applicable for children below five years.
9. Extra Bed: A fixed charge generally one fourth of the room rate.
10. Other hoteliers and FHRAI members are given discount which is normally 20%.