Full confession: I’m a sucker for a good upsell. Anytime the movie theater cashier asks me if I want to upgrade to the XXL-sized popcorn and soda combo for just $1.75 more, my initial reaction is, “OF COURSE I’D BE A FOOL NOT TO!”
But, inevitably, I walk away. Yes, there’s some value in a tub of popcorn so large that it could double as an infant’s swimming pool and a soda capable of causing the instant onset of diabetes, but I just didn’t see how it improved my purchase. I already had a sufficient amount of soda and popcorn, in all reality.
What the theater missed is a greater opportunity to earn my buy-in on a long-term relationship with their brand. Let me explain.
Upselling is a great path to incremental revenue. There are obviously few better times to sell to a customer than when they’ve already made decision to buy. It’s why we see lots of little cheap trinkets and candy at the register at the grocery store. People are already resigned to spending money, what’s a few more bucks?
The right upsell products can and should do three things for a brand:
1. Have clear value for the customer – Obviously, the product should have some sort of return to the customer that enhances their purchase or is of obvious benefit on an ongoing basis. Basically, the customer should feel like they “got one over” on the brand. (Click here for more thoughts on customer ROI)
2. Enhance the brand - Adding on to #1, the right upsell promotes the value of the brand on a regular basis. Membership benefit packages can allow a brand to go places and do things for customers that add value to the customers in ways other brands can't.
3. Extend the relationship – This is where the missed opportunity truly comes into play. An ideal upsell is one that prolongs the relationship between the seller and buyer. This could be in the form of a loyalty program or membership club, but the idea is to not just add a few bucks into one transaction, but to turn that lone transaction into many more down the road.
On the flipside, a bad or "meh" upsell can actually make the customer doubt why they made a purchase with a brand at all. Most consumers know when they've been taken for a ride, and these days, they punish brands for it.
Marketers need to shift their focus from the near to the far, and concentrate more on the fact a customer is pleased enough with their brand to make a purchase, so why not extend the relationship instead of just the cash?
The key isn’t so much “adding more revenue to my sale” as it is “adding more value to the relationship.” In the long run, it actually is a revenue play, as that relationship with customers pays off with repeat business and referrals to their own networks.
So maybe next time my movie theater will sell me an ongoing membership club that would give me discounts at all their locations plus a few mobile coupons to partner brands and a free movie every once in a while. It'd be more attractive to me and profitable to them than a slightly-more-massive tub of popcorn and pop.