Upselling

Definition — in general and in the hotel industry

In sales upselling (also known as up-selling) is a vendor's attempt to offer the customer a higher-quality product or service in the next step, rather than a lower-priced variant.

An upselling example for our industry is, the guest who has already signed up for a standard room interested or has already booked to sell a deluxe room/suite (room upgrade).

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Upselling vs. cross-selling

Cross-selling and upselling are often used as synonyms or mentioned in one term. However, that is not entirely true. What they have in common is that they can generate more sales and earnings with the existing number of customers. In cross-selling, however, the existing customer is sold another additional product in addition to the product they are interested in or want to buy. Classic example: The customer buys a grill and the seller sells him a grill glove and grill utensils.

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In terms of the hotel, cross-selling means that, for example, we sell the arriving guest a table in the restaurant or a spa treatment.

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However, the two sales strategies are not mutually exclusive, but should be used in addition.

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Upselling — reasons why

There's no sales guide or training book that doesn't include a chapter on upselling.

There are many reasons for this:

• It is easier to convince a customer who has already opted for “our” product of a higher-quality (and therefore higher-priced) product from us than to win a new customer.
• It is also cheaper to sell a product to an interested or existing customer than to a completely new customer. Because you first have to acquire this with suitable, often expensive measures for your own hotel/product.
• It is often the case that higher-priced products (in our case rooms) have a higher margin — this means that sales and yield are increased by selling to that one customer.
• In most cases, upselling results in higher customer satisfaction and therefore loyalty to our company. Because the pleasure of a higher-quality product, such as a deluxe room, is usually greater than in a “normal” room.

In summary, we can therefore say that we can achieve more revenue with up (and cross) selling without additional acquisition costs. This often goes hand in hand with our guests being even more satisfied.

Is there also criticism?

As with most sales strategies and sales opportunities, upselling involves criticism. On the one hand, in general terms, this means that the seller wants to “sell” something to the buyer and the customer feels pressured as a result. And maybe then go to the competition.

In order to counteract this, it is important that customer needs are paramount when upselling and that the seller shows a great deal of tact.

Only then will upselling add value for both parties.

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