Upgrade Your Upselling

Upselling—convincing a customer who has already made a purchase decision to change to a more expensive alternative—has a bad reputation. When upselling takes the form of drawing in shoppers with ads for bargain goods which turn out to be flawed and then pressuring the shoppers to buy costly alternatives, it’s called bait-and-switch.
     But researchers at Albstadt-Sigmaringen University of Applied Sciences, RWTH Aachen University, and University of St Gallen document that many consumers appreciate the options offered when upselling is done properly. One of their interviewees, a 28-year-old woman said about her hotel upgrade, “The room belonging to the higher category was available for only a small extra charge, maybe 10 Euros, and the room was larger and more comfortable. Access to the swimming pool was also included. I accepted that offer immediately.” Yes, her original purchase would have banned her from the hotel pool, but she didn’t see the upselling as an unethical bait-and-switch.
     Following their interviewing, the researchers experimented with different upselling tactics to determine which made the sale without causing ill will. They found that a critical factor was how much mental energy the shopper had invested before coming to the initial decision, before the upselling pitch. In some cases, there would be noticeable effort.

• With services like hotel reservations and car rentals, people often book online, where they’re presented an abundance of options. Sorting through these while considering tradeoffs in price and benefits can be exhausting. 
• Someone for whom a vehicle purchase is an infrequent benchmark event is likely to find the process more taxing than will someone who regularly purchases a replacement vehicle. 
• When a purchase is being made for indulgent pleasure rather than for strictly utilitarian reasons, shoppers generally need to deliberate longer in order to convince themselves the purchase is deserved. 

     Serving such consumers, upselling works best when the salesperson’s argument focuses on what would be lost by not selecting the more expensive option. On the other hand, when it seems that the customer has placed little effort into making the initial decision, upsell with a blend of gain-based and loss-based reasons.
     Results from other studies suggest that you show the shopper the items or photos of the items while describing the benefits they’d personally enjoy or miss out on.
     And present price differences in round numbers: “For only $20 more,” when the difference is actually $19.25, for instance.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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