The art – or artlessness – of upselling

Two stories in the last 24 hours about upselling caught my eye.  A feature of any customer processing operation is that it has the opportunity to influence each customer’s spend, and hence drive revenue.  Service employees have always been encouraged to ‘upsell’ and managers have been oftentimes incentivised to drive their unit sales in this way.  But from a consumer perspective it seems that there is a fine line between what is acceptable sales practice and what is unacceptable….

Last night Dave Gorman on his show Modern Life is Goodish revealed that when he ordered a pizza online for the first time, a food item costing 99 pence was automatically added to his basket.  If he did not want this item he had to remove it himself.  Gorman clearly thought this outrageous, joking that if you were in a supermarket an employee would not randomly toss an item into your shopping trolley and expect you to remove it if you did not want it.  Somewhat ironic this morning then that Sainsburys’ CEO, when interviewed on Today, was asked about a store where the public was able to read a poster that exorted employees to get each customer to spend 50 pence more when they shopped.    The interviewer clearly thought that this demonstrated that the retailer really only cared about its profits and not its customers.

It seems to me that what both these stories illustrate is that there is a danger that operators are being lazy – by failing to understand the psychology of consumers and hence be more subtle in achieving their revenue goals.   In simple terms, if upselling is made too explicit there may be push back.  Customers will begin to resent always being asked for more money – for instance when asked to “go large” in a coffee shop or quick service restaurant.  On the other hand we know from research and from practice that “unconscious signals” are highly effective in influencing behaviour.  For instance, photographic illustrations of some dishes on menus promote those dishes sales.  For many years restaurants had sweet trollies and staff were trained never to simply ask diners if they wanted a dessert, but always to push the trolley up to the table and asked if anyone wanted an item from it.

Of course, operators do you use these more subtle approaches, but when these become public knowledge they are not subtle anymore.  For many years supermarkets have placed confectionary items alongside checkouts to stimulate purchase, but they now get criticised for this practice.  And this illustrates that upselling is an ethical issue – is it right to persuade customers to spend more than they planned to?   Paradoxically it could be argued that the more subtle the upsell the less ethical it is.   So maybe Gorman is wrong to criticise his online experience?   The upsell is explicit, it’s relatively easy to say no, and some customers will decide to have the extra item anyway.  And the old fashioned restaurant sweet trolley?  The extra sales it generated were more than offset by the food waste it created!

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This entry was posted in Chap 08 Queuing and customers, Sector: Hospitality & Tourism, Sector: Retail and tagged , , . Bookmark the permalink.

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