Upselling

[Christopher]

As with all selling anywhere, the salesperson needs first to understand his own product, and then needs to get (very quickly) to understand what his customer needs.

Yup. Everyone listen to Macrosan.

Upselling in restaurants used to be when a guest would order a Gin & Tonic and the waiter would respond "Tanqueray, Beefeaters or Bombay?" as if those were your only three choices. The upsell there was from the well brand which was usually garbage. This tactic died around 1988 when most decent restaurants decided to feature 'premium' spirits in their rail.

[Simon Majumdar]

It always amazes me how rarely restaurants at all levels take the opportunity to "upsell". They have a captive audience who are there to spend money and have a good time, but so often they miss the chance to sell more of their product. In any industry that is a crime.

Macro ir right. If the staff member has a real knowledge of the product on offer and the needs of the customer, then it can lead to a positively more enjoyable experience for the consumer. We have recently been discussing The Match Group of bars on the UK board. Thet upsell regularly but from a base of extensive product knowledge and by listening to the consumer. So if you ask for a Martini, you will get it made with the house gin which is, I think, Plymouth. But, if you are brand specific, they will suggest one of their premium gins. They always give you a little taster first so you can be sure of what you are getting. It was in this way that I first tasted the Junipero gin which has now become my gin of choice

The unacceptable face of upselling is when a sommelier or waiter ignores your request for advice on wine within an given budget and keeps pushing unsuitable but hugely more expensive wines. The Criterion was the worst example I have ever experienced when I asked them to rec a wine for about £30, they were "out" of every one on the list but not of all the ones from £50-70. Well I never

If well handled and based on experience and knowledge upselling can be a bonus for all involved

S

[macrosan]

We all fall, too often, into the error of analogizing our food discussions by reference to other fields of endeavour. Maybe we think we all don't understand food and restaurants well enough actually to discuss an issue with reference to food and restaurants Talking about real estate agents and car dealers and suchlike is simply not sufficiently close to the subject of this thread to make analogy useful.

Most people go to restaurants, exactly as Simon says, to "have a good time". I naturally exclude places like MacDonalds where that could surely only apply to those too young to pay the bill or to be upsold to Most people's first need in a restaurant is to be told what the restaurant has to offer, and the assistance of a knowledgeable server is therefore considered by most people to be a positive asset. And many people are consciously open to suggestion, and will make this clear to their server either specifically or by implication.

A good server will determine the role he is being requested to play within the first few minutes of his contact with the customer. Of course many restauarants simply do not have good servers, and as Simon pointed out, those restaurants are missing a huge opportunity for profit and customer satisfaction.

Once the ground rules between customer and server have been defined in those first minutes, a server will breach the rules at his own peril.

[Jonathan Day]

We might usefully make a few distinctions here.

First, higher checks do not always mean higher profitability for the restaurant. There are likely to be items (some high end wines come to mind, where occasionally you see prices almost at retail or auction levels) where the gross margins are reasonably slim -- much smaller, for example, than bottled water, where the gross margins are enormous. Equally, there will be items where the additional preparation cost (e.g. because a cook of higher experience and cost is required) exceeds the additional price paid. If restaurants are like most industries (and I include the fast food chains here) it is a safe bet that most have only the vaguest idea of how profitable an individual item is, once all costs are reckoned in. Hence it is even less likely that the waiter would know.

Second, there may be other motivations for selling particular menu choices -- e.g. an overstock on a perishable item. If I recall correctly, Leslie Brenner's account of Daniel Boulud has Boulud pushing the waiters to sell a particular dish on a particular evening.

Third, relationship profitability and individual transaction profitability are not the same thing. The former is about the customer's profitability to the restaurant over many visits, the latter about the profitability of an individual check. A restaurant that aggressively drives transaction profitability will put off customers that might otherwise return; hence the common practices of giving complimentary drinks, dishes, etc., to good customers.

Finally -- and I think this is the point that Steve Plotnicki is driving -- price and the customer's perception of value are different:

An "upselling" intervention that moves the customer above the dotted line is "good" from the customer's perspective, and may lead to repeat visits. One that moves the customer below the line is likely to put the customer off.

I would add that -- in France especially -- about half of the interventions I have had from waiters are "downselling" ones, where the sommelier suggests that a less expensive wine would go well with a particular dish, a waiter quietly suggests that the lobster that day is not everything it could be, or hints that an extra dish we have requested may be just a bit too much. In this case, the move is to the left and up: lower price and higher value. I find this the most powerful "selling" technique of all, since it often biases me to view the restaurant positively and even, occasionally, to overlook minor faults in preparation.

[Simon Majumdar]

I think your last point is a very strong one. The power of "downselling" should not be underestimated

A good example of this is a recent visit to The Gotham where I was hosting a supper for 8. I was on a relatively limited budget and chose two ( what I thought were well priced ) Ribero's to have with our meal. The wine steward came over and not only suggested two wines that were a good $20 per bottle less than I had been prepared to spend, but he also brought be small tastings of each of the four wines so I could compare and be sure they were what I wanted. They were and this probably saved me $200 across the meal.

Like you, it also made me overlook some ( admittedly small ) problems with the food and made me more predisposed to going back there particularly for an event of this nature

in the end, this is all about selling. It is about meeting the needs of your customer with the product that you have to offer at a price they are happy to spend

S

Edited January 20, 2003 by Simon Majumdar (log)

[Steve Plotnicki]

Fat Guy - I note you are on the same side of the argument as Jaymes. Other than that, if we accept your definition of upselling, there seems to be both, no distinction between upselling and simply selling, as well as nothing to talk about because then there is no controversy. It's just too broad a definition without drawing some inference of intent (trying to drive higher profits) on the salesperson's part. Christopher has it right. Moving people from the bottom shelf to top shelf gins or vodkas was classic upselling. I also assume that Jonathan's graph shows that ultimately upselling is a function of the result. If you take Christopher's example, the push to a better category of vodka might be appreciated by the customer at the higher pricepoint. But if the customer discerns no difference in quality, he might think he got ripped off by being charged an extra dollar or two. And I think that restauranteurs who encouraged their servers to sell top shelf liquor even though their customers didn't find any additional value were classic upsellers and I thought that was what your original post was getting at.

[weinoo]

Jonathan Day Posted on Jan 20 2003, 04:32 AM

I would add that -- in France especially -- about half of the interventions I have had from waiters are "downselling" ones, where the sommelier suggests that a less expensive wine would go well with a particular dish, a waiter quietly suggests that the lobster that day is not everything it could be, or hints that an extra dish we have requested may be just a bit too much.

I call this honesty.

[Simon Majumdar]

Jonathan Day Posted on Jan 20 2003, 04:32 AM

I would add that -- in France especially -- about half of the interventions I have had from waiters are "downselling" ones, where the sommelier suggests that a less expensive wine would go well with a particular dish, a waiter quietly suggests that the lobster that day is not everything it could be, or hints that an extra dish we have requested may be just a bit too much.

I call this honesty.

true, but still rare

And, therefore, all the more welcome when it happens

S

[Steve Plotnicki]

You know I don't find downselling so unusual. I think that a fair amount of it goes on at better establishments. In fact quite often the captain at a restaurant tells me we ordered too much food (it rarely helps.)

[weinoo]

You know I don't find downselling so unusual. I think that a fair amount of it goes on at better establishments. In fact quite often the captain at a restaurant tells me we ordered too much food (it rarely helps.)

That has certainly happened to me - or I get the raised eyebrows! How refreshing - those are the places I like to go back to (provided the food is worthy).

[Fat Guy]

I note you are on the same side of the argument as Jaymes.

I'm on the same side of the argument as everybody except you. You're the only person in the world who seems to think the salesperson's intent is a component of upselling. But that's just something you made up. You can't produce a shred of evidence for that proposition because it's false. You've been presented with evidence in the form of multiple expert uses of the term that clearly contradict your position, you've had your argument shredded, yet you keep repeating it even though 100% of the facts point to you being wrong. Why can't you seem to understand that all you're doing is distinguishing between two species of upselling: the one you like and the one you don't?

if we accept your definition of upselling, there seems to be both, no distinction between upselling and simply selling

All upselling is selling. Not all selling is upselling.

as well as nothing to talk about because then there is no controversy.

Okay, so let's use the wrong definition in order to create controversy.

[Fat Guy]

First, higher checks do not always mean higher profitability for the restaurant.

Bigger checks do, however, mean bigger tips. Restaurants do not for the most part reward their salespeople (servers) on the basis of profits generated, so the incentive is to upsell without regard for profitability. The only ways to get around that are to re-price your menu to maximize profit on every item or to offer special incentive bonuses to waiters who prioritize profit-maximization over tip-maximization. The latter is extremely difficult to pull off.

[Steve Plotnicki]

Gee I don't think that is true if you read through this thread. I think that pretty much everyone has said that while you can call any attempt to get a customer to spend more money upselling, that it is only of interest to us as consumers if their goal if just to make higher profits and not deliver a better quality experience. When McDonald's offers a package of a burger and coke for a special price that is less then the price of the two put together when ordered seperately, that might be upselling based on one mathematical equation, but it has no negative connotation to it. How does that apply to your question?

It seems your basis for making the calculation is what the customer intended to spend. Why is that any more relevent then what the server's intent was? Most customers are ignorant of what good quality and good value are. So I ask again, without a negative connotation, where is the discussion here?

[Fat Guy]

It seems your basis for making the calculation is what the customer intended to spend. Why is that any more relevent then what the server's intent was?

Not my basis. The basis. Upselling is about selling additional, better, more expensive stuff. The salesperson's intent isn't relevant to the definition so long as he sells more. He can wish you all the ill will in the world or he can be motivated purely by altruism. He can sell you something extra that benefits you or that's a total waste of your money. It doesn't matter. You've still been upsold if you spend above whatever your original budget was. To answer your question, I don't think the discussion is or needs to be about what is and isn't upselling. There are some issues there, especially if we want to distinguish between upselling, cross-selling, bundling, add-on sales, etc. But on the whole I think the discussion is or should be more about what kinds of upselling are and are not effective, desirable, ethical, etc. Not that I get to decide how the discussion goes.

[Jonathan Day]

First, higher checks do not always mean higher profitability for the restaurant.

Bigger checks do, however, mean bigger tips. Restaurants do not for the most part reward their salespeople (servers) on the basis of profits generated, so the incentive is to upsell without regard for profitability.

Agree, and this is why a broad strategy of pushing servers to upsell is probably the compromise that most restaurants land on -- assuming, of course, that their goal is to maximise transactional or "one-visit" profitability.

I wonder how many restaurants (1) actually think about relationship marketing or relationship management; (2) train their staff in relationship selling; (3) even try to estimate the relationship value of one customer over another, and use this estimate to determine policy on complimentary goodies?

We should also distinguish complex sales from simple sales. If I recall the literature on salesforce management, the research findings from groups like Huthwaite indicate that the most effective sellers of complex products and services (large computer systems, construction projects, etc.) spend most of their time asking questions and relatively little time going on about features and benefits of the products. Conversely, if you try the "ask lots of questions" technique for a simple sale (a plain vanilla personal computer, for example), the customers get annoyed because the questioning is intrusive.

For obvious reasons, complex products/services lend themselves to relationship marketing more than simple ones do.

I think the distinction may apply in restaurants. Some meals, and especially some wine purchases, are more complex, in which case the right strategy is probably to ask the customer questions about her or his previous experience and preferences. At McDonald's, the better move (assuming, of course, that you are trying to upsell) is to say, "would you like a supersized fries for 30p more?" and leave it at that. I love it when a restaurant has a view about my experience and my preferences, but I must admit that this doesn't happen very often.

My bottom line: upselling is part of -- not the same thing as -- selling.

If it's done badly (for example, inappropriate questioning, or pushy, or aggressively) I detest it. If it's done very well, and I feel that the upsell has added value, e.g. helping me discover a great new wine, I welcome it. Most of the time, I ignore it.

[Steve Plotnicki]

But, but, but, but, in order for something to be "upselling," you have to validate a person's original budget as being the starting point. I'm not willing to accept that. Somehow the definition of upselling has to remove unrealistic and unknowledgable customers from the mix or there is no difference between upselling and plain selling.

Why is it that when we talk about anything consumables, we grant the customer dispensation on their choice and lock into it as if they know the golden rule? And we then articulate everything the seller does as being manipulative. In fact it is quite often the opposite way around. Sellers are knowledgable and most buyers are unknowledgable. And most buyers instead of being willing to show their lack of knowledge by asking questions of the seller, stick to their poorly chosen choices and then blame their fate on the seller. Just look at Chris's example of converting drinkers to top shelf liquor. Were servers doing diners a favor by moving them to Absolut instead of Maison Dreck or was it upselling?

[Fat Guy]

I wonder how many restaurants (1) actually think about relationship marketing or relationship management; (2) train their staff in relationship selling; (3) even try to estimate the relationship value of one customer over another, and use this estimate to determine policy on complimentary goodies?

All of them. It's just that most restaurants aren't particularly sophisticated about any of those three categories. Most restaurants get as far as teaching their hosts to say, "Please come again," to learn customers' names and preferences, and to distinguish among categories of VIP customer when relaying an order to the expediter (who tends to have control over the food comps). It wouldn't suprise me to learn that Outback Steakhouse or the Olive Garden has a sophisticated program in place to address all three of those points, but I'd be surprised to learn of such a program -- at anything higher than a basic intuitive level -- in place at most standalone restaurants.

[Fat Guy]

Were servers doing diners a favor by moving them to Absolut instead of Maison Dreck or was it upselling?

Assuming the cocktail tastes better with Absolut (a questionable proposition but not relevant here), it was both upselling and a favor/benefit/good-thing. That's the win-win example of upselling.

Upsell that benefits the customer: win-win

Upsell that doesn't benefit the customer: win-lose (short-term at least)

Failure to upsell successfully when the customer is better off without the upsell: lose-win

Failure to upsell successfully when the customer would have been better off with the upsell: lose-lose

[=Mark]

Is it upselling if the server's suggestions will improve the diner's meal?

Can you think of a reason why it woudn't be?

Yes, if it is done to unload some crap that is approaching it's shelf life limit in storage.

[Bux]

I don't really understand the argument about the definition of the word "upselling," except for the connotation of the word. Upselling is upselling, but we don't want to accuse the seller of upselling when we perceive he's doing us a favor. Let's face it, "accuse" is the operative word and it sets the tone for why Plotnicki refuses to see the word as it's neutral definition warrants.

Didn't I just leave a message in another thread about how and why I am rarely offended when upsold in France and usually put off when upsold in American restaurants? Anyway, even for the sake of argument, we should accept the definition offered in the original thread and discuss the questions asked.

Let me offer this as a basic working definition of upselling: A server in a restaurant engages in upselling whenever he or she builds the check beyond what the customer would have ordered without outside influence.

Most server-customer transactions involve some form of upselling, even if it's just an offer of dessert wine.

How do you feel about upselling? What distinguishes good upselling (if you acknowledge such a thing) from bad?    

To argue about the definition seems to be about controlling a thread rather than discussing it. Nevertheless, I come back to my original point in this--good upselling when you come away feeling you've not been upsold. If we accept Fat Guy's definition of "upselling" and I hope I've made a convincing argument that we do that if only to operate on level ground, there are times and places where I want to be "up sold."

I go to DiPalo's to buy some olive oil, coffee beans, fresh mozzarella and maybe some sausage. Louis says he has this new sheep's milk cheese from Sardinia and offers me a taste. Maybe I like it and maybe it's not my sort of cheese. If I like it, I buy a big piece. If I hate it, I don't buy it, but if it's just not my thing or if I don't particularly like it, but I know I can eat it in a sandwich even though I can buy a less expensive cheese I like more, I still buy a piece. Why? It's simple, I want to encourage Louis to think of me as a guy who can be upsold so he will continue to offer me new foods. He doesn't push food or upsell customers unless he thinks they have a genuine interest in food.

[Bux]

Is it upselling if the server's suggestions will improve the diner's meal?

Can you think of a reason why it woudn't be?

Yes, if it is done to unload some crap that is approaching it's shelf life limit in storage.

I don't get this line of reasoning at all. While I accept a simple definition of upselling as adding price without regard to value, I question how one can assume a diner's meal would be improved by crap. Obviously Plotnicki is not talking about crap and to suggest so seems just to move the topic further from the point. Offering to upscale a $30 fish dish by offering a one ounce garnish of caviar for a five dollar supplement is upselling and I'm an easy upsell for that kind of crap as long as the caviar is in top condition today. I'll take advantage of the restaurateurs worry that it might be over the hill soon.

[Bux]

Were servers doing diners a favor by moving them to Absolut instead of Maison Dreck or was it upselling?

That does appear to be the definition, unless the Absolute is less expensive.

[cabrales]

I'd like to highlight that, regardless of what upselling might be and whether a restaurant seeks to upsell under that definition, a diner is ultimately responsible for keeping track of any budgetary considerations she may have. While this may be a controversial assertion, I believe that a diner is responsible for informing herself about food and wine such that she can rely on her own choices in the event she detects that a dining room team member (including a sommelier) is seeking to upsell.

I do not find upselling objectionable. There are certain inherent potential tensions in the interactions between a restaurant and a diner, and the restaurant's interest in maximizing profits and the diner's desire to minimize cost *all other things being equal* is one of those potential tensions. I have maintained repeatedly that it is entirely appropriate for a restaurant to seek to maximize profits, and selling of more expensive food or wine items (even wine items that are less appropriately matached for the dishes ordered) is one channel of maximizing profits.

[Bux]

I do not find upselling objectionable.

I suspect the bettter one chooses one's restaurants, the less one will find the practice objectionable.

[Steve Plotnicki]

The reason I am trying to hone in on the definition is because I am trying to find out if we are having a food discussion or one that should be on eMarketing.com. Otherwise I do not understand what the difference between upselling and merely selling is. According to FG's definition, from what I see, all selling is upselling unless it happens to be an item at the same exact price point.