Imagine that you are on vacation and are checking in at the reception of a Holiday Inn. The front desk lady smiled and told you warmly that if you pay 10 yuan more per night, you can upgrade your room to a larger suite. I think you will be hosting a barbecue party for some friends. These extra spaces are definitely useful, so you are happy to accept this suggestion. Win-win.
Unless you say that you are a hotel operator, you have sold a larger room, but because of the discount, it has not increased profits. In these cases, you may even have less profit per square meter.
The bigger problem for hoteliers is that most hotels are actually business hotels, so the decision to upgrade a room to a bigger or better should be done before the guest enters the lobby. Upselling at the front desk of a business hotel has almost no effect. At the front desk, employees are giving more and better rooms (suites) to those who are more loyal. However, in most cases, according to the words of a friend of the hotel industry, “the suite is provided free of charge to a customer who is less likely to be acceptedâ€.
Upselling popularity
Upselling - UpSelling may be used more often in places like food & beverages such as fast food restaurants, cafes, and bars. In these places, the front desk staff will advise the customer to spend an extra little to increase the size or change to a bigger brand. McDonald's and Starbucks all do this and make a lot of money.
But when you look deeper, you will understand their success in these cases. Beverages usually have very high profits (eg soft drinks and coffee), and even a free increase in weight will hardly affect profitability. The 0.10 buck you pay for the increase in weight is rare for you, but it is almost ten or even hundreds of times the cost of these added drinks.
Therefore, it may not give you a reasonable return by attracting customers to pay more for additional sales. Unfortunately, it is not going to make your business more attractive by suggesting to customers to pay more.
Cross-selling of other products - CrossSelling
It used to be said that McDonald's used to have 20% of its profits from French fries, and all the clerk had to use these magic words. "Are you going to pick up the fries?"
Regardless of whether the rumor is true or not, McDonald's is indeed very successful in cross-selling, whether it is French fries, apple pie or other things you did not expect to buy, the Metropolis is still bought because of the clerk's advice.
In addition to the fast food industry, cross-selling has been very successful in other industries, such as:
*Automotive insurance and other packages are sold to customers in car sales;
* Printers (and replaceable cartridges) are sold when customers (personal and corporate customers) buy computers;
* Warehouse equipment, land diversion and other supply chain services are also provided to customers when customers purchase air/sea freight services;
* Customers also buy ties when buying shirts and suits;
* When the customer purchases corporate training, senior executive guidance and meetings are also packaged for sale, and so on.
According to the McKinsey Quarterly article in December 2007, many companies still have a lot of room for cross-selling, although this may be better than up-selling. For example, an industrial product manufacturing company's operating unit has a detailed sales record that refuses to provide customer information.
The same is true:
* Desktop computer sales staff are not involved in the sale of IT solutions that have the same target customers as they do;
* Shipping or shipping sales personnel do not visit important customers with their land transportation or warehouse management partners;
* An industry salesperson in an industry does not communicate with colleagues in other industries in other regions to ensure that customers will live in their hotel chain wherever they are.
Because of this, cross-selling is widely quoted only in the food and beverage industry, with French fries sold with cola and burgers, and muffins sold with coffee.
But at the Crowne Plaza Zhengzhou Zhongzhou, the front desk, F&B are selling moon cakes, through various corporate sales visits or other cross-selling opportunities. So it is not surprising that they sold mooncakes worth £500,000 in two months in 2007. That is almost 5,000 per night of profit, and it is obtained at a very low cost.
In addition to moon cakes, the hotel can also cross-sell a range of products and services:
* Meeting rooms (spaces of different sizes to meet different meeting needs);
* Food and beverage packaging (for those customers who want to entertain their customers);
*Business center services (can provide special arrangements for customers who need to contact executives in other time zones), and so on.
Hotels that fail to make full use of the facilities for cross-selling are wasting their assets, and of course they deserve more lucrative profits.
Many companies across different industries are looking for ways to get salespeople to share each other's customer information and try to make salespeople see themselves as part of a larger team rather than working independently. Such a transformation will be painful at first, but IT giants like HP, IBM, and DELL are already on this path, and the return will prove the value of the initial efforts.
Outside the rules
Is up-selling destined to fail?
Fortunately not. And just how to perform needs to be adjusted. The pricing policy of a hotel serviced apartment in Shanghai (the one that hosts the monthly breakfast meeting) provides us with a real case. Rather than lowering the price of a better and larger suite, they raised the price of a small standard room so that the price difference between the two rooms was only between 10 and 15 pounds.
There is no need to question, this way is effective. This is a rare case except for the food and beverage industry, where more expensive products continue to sell more than cheaper ones. ,
Imagine such a scenario now. You are on a business trip and arrive at the hotel very late. The front desk staff smiled at you and told you that all the suites were gone, but enthusiastic suggestion that if you are willing to “downgrade†to a standard room, you will get a £10 discount and an additional £10 for any food and beverage in the hotel (including Moon cake). If you embrace it, this will be a new perspective on upselling and cross-selling.