Upselling

[macrosan]

Well this is so strange I just had lunch at a Pizza Express, and met the Number One Upseller in the world

Briefly, the dialogues went like this:

Him: Good afternoon sir. This is the wine menu, here is the food menu. Would you like an aperitif ?

Me: No thanks. Just get me (glancing at wine list) a small glass of Merlot please (they have two sizes of glass on the list).

Him: Would you like the 250ml size, sir ? That's very good value.

Me: (Thinking of this thread, calculating that the larger glass size is about 1% cheaper per litre) Yes please.

Him: We have a number of specials today sir ... (goes on to list them)... they're all very good.

Me: (Thinking about this thread) Are the regular dishes not very good then ?

Him: Oh no sir, everything is very good.

...(He disappears, returns with wine after a few minutes.)

Him: Have you chosen, sir ?

Me: Yep, I'll have a piece of pizza with pomodoro and basil as a starter, then penne arrabbiata please.

Him: The pizza is a full size pizza, sir, it's really for two to share.

Me: (Thinking of this thread and thinking "wow") No, I just want something small. What do you recommend ?

Him: We have a bruschetta made from ciabatta, with tomatoes.

Me: (Thinking of this thread and checking the price on the menu. Briuschetta was 30% cheaper) That's fine thanks.

Him: And wpould you like a sald with your penne ?

Me: No thanks.

Him: We have an excellent salad made with ...

Me: No thanks.

Him: Would you like to order anything else ?

Me: Is there anything you'd like to suggest ?

Him: The salad is really very good.

Me: No thanks.

We had the same sort of dialogue about dessert and coffee. I came out mentally exhausted, but in fact the guy was only trying hard ... just a bit too hard.

[Steve Plotnicki]

Macrosan offers a complicated example. That's because there is tension between the concept of "offers good value" versus getting the customer to spend more money then they intended to. To me, that is wholly different then the waiter telling you that your Foie gras would be better with a different (read more expensive and better) glass of wine which is intended to improve your dining experience. In the former, the transaction is driven around volume and profitability. And in the latter it is driven around quality.

[Bux]

All active selling may be seen as upselling. Passive selling would be limited to processing a customer's order or request. Active selling would be helping a customer make a decision or selling to someone who didn't know he needed a product or service. Upselling would be selling a more expensive item to someone who was ready to order something at a certain price.

If I didn't ask for a wine list and placed an order for food without making a beverage order, it would be upselling to suggest I might want to see the wine list. If I asked for the wine list and asked for a suggestion from the sommelier and he suggested a seventy five dollar wine without knowing I was thinking of spending forty dollars, that would not be upselling, but If I asked about a fifty dollar bottle and he suggesed a sixty-five dollar bottle, that would be upselling. Likewise, if I go into a store and the salesclerk shows me the $95 shirts first, that's okay, but if I ask to see the $50 shirts and he tells me there are some nice $85 shirts on sale for $65, that's upselling. Upselling is neither immoral nor unethical and can often be in the consumer's interest. I acknowledge that it has a negative connotation because it says you are being asked to spend more than you intended to spend and Americans approach restaurants with a great deal of suspicion. In many, or most, cases that suspicion is deserved.

[Fat Guy]

Certainly in a restaurant context most of the selling that a server does is of the upselling variety. Examples of selling that aren't upselling would be advertising, decor, media relations efforts, enticing menu descriptions, delicious aromas wafting from the kitchen, and downselling of course. But yes, at the point of contact between server and customer nearly all salesmanship is upselling.

[Jaymes]

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 get back to your original question:

1. I don't mind upselling at all. In fact, I like and welcome it. It is merely expanding upon the original agreement (i.e., I'll take the salmon and a house white). It is offering me additional information and options.

2. "Good upselling" is, just as I said, more information from an informative, helpful source; i.e., a "special" or promotional price on something, an addition to my meal (or other purchase) that might be enjoyable, and so forth. It gives me other opportunities to expand upon my initial agreement to purchase -- opportunities that might well enhance my enjoyment of the original product. Or, opportunities to change my mind and purchase a different product that I perhaps had not originally considered ("You say the lobster is on special today? That is a good price. I think I'll have that instead."). In any retail environment.

"Bad upselling" offers me no new information that is helpful or pertinent or relevant to my situation. It is pushy and unpleasant and insistant. The salesperson is neither interested in me nor my needs/wants/desires. It forces me to say "no" several times, and to rethink my initial agreement to purchase.

Edited January 20, 2003 by Jaymes (log)

[Steve Plotnicki]

All active selling may be seen as upselling. Passive selling would be limited to processing a customer's order or request. Active selling would be helping a customer make a decision or selling to someone who didn't know he needed a product or service. Upselling would be selling a more expensive item to someone who was ready to order something at a certain price.

Excuse me if I think it is more complex then this example lays out. If I go to a steakhouse with a unrealistic idea of what a NY strip will cost me, so I decide to order a hamburger instead, when the waiter tries to get me to order the steak because it happens to be the best steak in the world and I will really enjoy it, that isn't upselling. Upselling would be when that steakhouse has a sale on 12 oz filets and they instruct their servers that once the customer is in the door, try to sell them the 18 oz steak instead by telling them blah, blah, blah.

[Fat Guy]

If I go to a steakhouse with a unrealistic idea of what a NY strip will cost me, so I decide to order a hamburger instead, when the waiter tries to get me to order the steak because it happens to be the best steak in the world and I will really enjoy it, that isn't upselling.

Sure it is. It's just that it happens to be the kind of upselling we want and appreciate, as opposed to the unwanted and unappreciated variety.

[Jaymes]

Certainly in a restaurant context most of the selling that a server does is of the upselling variety. Examples of selling that aren't upselling would be advertising, decor, media relations efforts, enticing menu descriptions, delicious aromas wafting from the kitchen...

Or standing out in front of the restaurant handing out flyers and hollering at folks to "Come on in!".

[Steve Plotnicki]

Sorry I am not going to be able to agree with this. To me upselling has to result in the customer getting something they ultimately didn't want or didn't need to have. Without that aspect to it, any selling can be described as upselling and that is too vague for me.

[Fat Guy]

To me upselling has to result in the customer getting something they ultimately didn't want or didn't need to have.

Can you agree that yours is not the accepted definition in the marketing literature?

[Steve Plotnicki]

I haven't seen the marketing literature. But I would be surprised if it didn't deal with intent and a server being instructed to try and move the diner to different price points.

[Fat Guy]

Did you see the quotes I provided above? They indicate that upselling can be win-win.

[Steve Plotnicki]

That doesn't do it for me. For it to be upselling, a server has to consciously be trying to move a diner to a higher price point for the purpose of making the check larger. If it is for any other purpose, it isn't upselling as far as I'm concerned. Even if a larger check is a by product of the transaction.

[jaybee]

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?

Technically, upselling has to be at the initiative of the seller. It also has to be a suggestion to buy something the buyer didn't ask for or intend to buy when he came in. Good upselling is when the customer walks away happy. Bad upselling is when they don't and feel they were suckered.

The intent of the upseller may be to sell more for his/her own gain, to look helpful and knowledgable to the customer or to make the customer more satisfied/happy with the meal. Or all three.

I view upselling from waiters I know in places I frequent as an attempt to please me. Sometmes they will tell me about a new selection of cheeses when I have not ordered any cheese. Or they suggest a new dessert, knowing I haven't tried it. In some places they have dishes that are not on the menu, or even annoounced as specials, but are available for "certain" customers.

When upselling happens in places I don't know, I question the waiter to see what is driving him to make the suggestion. It is pretty easy to determine in a few questions if he is just pushing something to make more money for the house or if there is a customer-based motive.

[Jonathan Day]

at the point of contact between server and customer nearly all salesmanship is upselling.

FG, I don't agree with this, unless you reduce the interaction between server and customer to the words they exchange (i.e. what could be communicated in the way we are doing now).

In my experience (and the sales management literature bears this out) there is a lot of "selling" that goes on that the customer should never be aware of. It has to do with the moves that the server makes to help the diners feel welcome and at ease, moves to mentally shift the server "over to the customer's side", and the like. It may involve an explanation of the structure of the menu if the server detects that the customer doesn't understand how it works, or even an offer to explain or translate unfamiliar dishes. It could involve calling attention to an attractive special of the day.

None of this is upselling, in the sense that it tends to affect the diner's initial choice rather than the final order placed. All of it is selling. Some of it is very powerful.

[Rachel Perlow]

If you want to see naked upselling, visit your local real estate broker and tell them you want to spend $X on a house or apartment. I gurantee you that when you go out to look at properties, half the of the ones on the list will be at significantly higher prices then the one you specified.

Actually, showing people houses that are listed slightly higher than they are planning on spending is completely appropriate and not upselling. This is because historically most houses sell for around 10% less than list price. Real estate sales is still a negotiation business. People expect to pay less than list.

If a real estate salesperson showed a buyer houses that were "significantly" more than the buyer stated they wanted to spend would be doing themselves and their buyers a disservice on several points. First, the buyer may literally not be able to afford the house in question (as opposed to those who could spend more but choose not to) and you are wasting your time, your customer's time, and the seller's time (if they have chosen to be home whenever their house is shown). Second, your customer will become disenchanted when they realize they can't afford the house in question. They may fall in love with a house and be dissapointed when they don't qualify for the loan for it. Or, they may get annoyed with you as a salesperson and go to another Realtor (remember, Realtors get paid on commission and don't get any payment until the sale is closed).

A Realtor prevents showing a customer a house that it too expensive by completely qualifying them before ever bringing them out. The best route to doing this is to have them pre-approved for a mortgage. This way you know exactly what they want and can afford to spend. You can show them houses that fit in their budget and they don't get hurt by falling in love with a house they cannot afford.

What is upselling in real estate is the other items that the agent may try to sell you. Typically, this includes various types of insurance, or pushing their in-house mortgage company, moving company, etc. Just like in other upselling situations, these are value added items and may or may not be to your benefit. However, if upon shopping around you discover their prices are fair, they may very well be worth the cost to you.

Edited January 20, 2003 by RPerlow (log)

[Fat Guy]

I agree, Jonathan. Thanks for separating out those behaviors.

And thanks for that explanation, Rachel, though I think it only applies to smart brokers and most brokers aren't smart. In my experience going out with several realtors in Manhattan they often attempt to show at 50-100% higher than the range specified by the client, they don't bother to pre-qualify, and they are generally ridiculous.

[La Niña]

This is because historically most houses sell for around 10% less than list price. Real estate sales is still a negotiation business. People expect to pay less than list.

That really depends on location and market conditions, I think. I see sales figures not infrequently when the actual paid price is the same or exceeds the asking price.

[Steve Plotnicki]

Gee that hasn't been my experience with real estate brokers. I have found that most brokers specialize in selling houses in a certain location and at a certain price point. And that regardless of what the customers say they want to spend, they try to "upsell" them into their price point. Few brokers tell you to go elsewhere because they do not specialize in what you are looking for. What they usually do is to show you crappy houses at your price point, and then good houses at the price point they specialize in which they hope you will move to after seeing them. But I have yet to see the broker who says, you can't get the location and size that you want at that price point, go see a different broker who can help you. They almost all try to upsell you and end up wasting your time.

[Rachel Perlow]

And thanks for that explanation, Rachel, though I think it only applies to smart brokers and most brokers aren't smart. In my experience going out with several realtors in Manhattan they often attempt to show at 50-100% higher than the range specified by the client, they don't bother to pre-qualify, and they are generally ridiculous.

First, a clarification - a broker is generally the person that owns the agency. This requires much more extensive training and testing than it does to get a real estate agents license, so you are really speaking about agents not brokers.

Second, this is the General forum, not the Manhattan forum, so I was explaining based on a broad audience. Of course, I am only licensed in NJ.

Most people who initially seek a Realtor's help get annoyed by the financial questioning that an experienced agent insists upon. An inexperienced agent would then be intimidated into going out and showing houses before they know how much their buyer can afford. Most buyers want to go right out and see houses. I wish they could see that it is to their benefit to be properly qualified before doing any actual shopping. For the most part, they would save themselves a lot of time and heartache if they did so and only shopped for places in their realistic price range.

But I have yet to see the broker who says, you can't get the location and size that you want at that price point, go see a different broker who can help you. They almost all try to upsell you and end up wasting your time.

Why would they need to send you to a different agent? In my area, all agents can access all listings, except for a small minority of exclusively listed properties (once again, my experience does not include Manhattan - anyone know if they use an MLS?). Once again, a Realtor only gets paid when a property sale closes. Usually, this is 60-90 days after the contract is initiated. And a contract may not happen until you've been searching for a while. Of course, there are agents that are stupid and think they can push someone into a higher prices property. But there's a big difference between suggesting a higher priced wine or pushing an appetizer and trying to get someone to spend an extra $250,000 on a house.

[Steve Plotnicki]

Why would they need to send you to a different agent? In my area, all agents can access all listings, except for a small minority of exclusively listed properties

Well in Manhattan the agents need to be more knowledgable then that to be able to sell apartments. There are agents who literally specialize in just a few buildings and make a living out of them. Many of them will try and upsell you into what they specialize in rather then send you to someone who has the specialty you need.

[Rachel Perlow]

Actually, that sounds like they are less knowledgeable and limited if they specialize in single neighborhoods or buildings.

[La Niña]

That's like saying a hematologist is less knowledgeable because he/she specializes in hematology.

That's how the market works in Manhattan. They're not less knowledgeable - they're just specialized.

Edited January 20, 2003 by La Niña (log)

[Jonathan Day]

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.

Cabrales, I've seen you make this point on other threads. If I understand your point of view correctly, it is up to the diner to prepare for a meal (by reading guides, discussing restaurants with friends, eGullet, other forms of research, etc.) and thereby to avoid any (legal) malfeasance, or failure to offer equal quality products, or to offer specials. If the sommelier offers a more expensive wine, one that doesn't match the foods well, and the diner accepts the recommendations, that is the diner's problem. Caveat emptor, or perhaps sauve qui peut. A diner who lets herself be bilked by the restaurant has only herself to blame.

Now from one perspective I can understand this: there are no laws requiring the restaurant to give equal quality/size lobes of foie gras to everyone who orders "foie gras", or to stop sommeliers from "bad" upselling (i.e. that drives up the cost/value ratio).

I would only point out that (1) exploitative behaviour in a business is a great to lose custom and destroy a firm's reputation; (2) where there are big information asymmetries between seller and buyer, and a tendency in sellers toward exploitative behaviour, the usual next step is regulation. Of course this has already happened in the area of sanitation and environmental control: most customers cannot get behind the kitchen doors and thereby become aware whether foods are being handled properly. So the regulators have stepped in. That's a good thing, in so far as it goes, but my guess is that regulation could get intrusive if it went much further.

Think about the controls on product descriptions for consumer food goods. If the behaviour you seem to advocate became common, we could start seeing restaurants being required to write menus in regulatory language: "113 grams of prime beef top sirloin, uncooked weight, lubricated with vegetable oil before being grilled over a gas fire to an internal temperature of 120 degrees F, served with emulsified liquid flavour product with added alcohol (35 proof)".

Profit maximisation in the long run (over the life of a customer and the life of a restaurant): a good idea. Gouging or trying to take customers for all they are worth: bad business.

[Steve Plotnicki]

Plus in Manhattan coops the coop boards are often picky and the brokers know which buildings will approve you and which ones won't.