News for the Hospitality Executive
Upselling Works Best Upclose and Personal
One of the many great pleasures I have had in this life is having watched the second and now third generation of family having spent time working in the hospitality industry.
Lisa, daughter number one, spent a summer in food service at a mountain resort; Cheryl, daughter number two, served as a tour director at a theme park and later became a hotel reservationist and an assistant meetings manager; Son Mark worked as a banquet waiter and bartender at resorts on both coasts.
And grandson Shane is a front desk clerk today at a resort here in southern California, after having spent the property’s first full year as a bellman. And he loves his job.
Shane called last week to tell me - - with great pride - - that during his first full month on the job he finished number one in his department in commissions for upselling (Shane receives a 10% commission for all upsells as part of his regular paycheck).
I loved his passion as he shared those guest interactions and transactions. One involved a couple that arrived late on one of those classic “trips from Hell”. Shane commiserated and then, reading the male credit card holder well - - in particular, asking about view - - told the couple he wanted to do something special for them. He described the room and location the resort had held for arrival, but that he could upgrade them into a beautiful oceanfront suite for “only” US$150 more. Gladly and quickly, the couple said yes.
There were no bellmen immediately available so Shane - - having already mastered the art of rooming guests - - put them in a golf cart along with their luggage, drove them to their suite, and after unloading luggage and presenting the suite with all its amenities, picked up the phone and made dinner reservations for the couple.
Not only was the couple able to let go of the bad trip experience getting there, they became happy - - so happy they extended for two additional nights; the resort was able to add room revenue (US$900 for the six nights), plus two additional covers in the restaurant - - and Shane picked up one huge tip to boot.
Guests need to “see” before they buy
It’s not just the upscale properties that practice good upselling techniques. A limited service branded hotel without food and beverage found a way to add US$20 to the room by showcasing an attractive activity basket upon check in. The basket included snacks for the room, a choice of golf tee discounts, movie tickets, zoo discounts, and transportation to activity - - transportation being the key. Not surprisingly, the activity basket did not sell well online, however, front desk agents produced 80% conversion at check in time primarily because guests could see a sample basket, touch the coupons, and choose their snacks.
Harry Beckwith, author of “Selling the Invisible”, makes the point that prospects rarely buy what they can’t “see”. Beckwith writes that people or prospects “will trust their eyes far before they will trust your (hotel’s) words, business cards, websites or brochures . . . prospects hear what they see”, according to Beckwith.
I doubt strongly that either upselling transaction - - Shane at the upscale resort or the front desk team at the limited service property - - could have been accomplished online or even on the phone. All the more reason why all lodging operators need to focus on optimizing incremental revenue from each and every point-of-sale station.
A common practice
Upselling isn’t a new practice. I was reminded at how basic and widespread the technique is when a cashier at a movie theater concession stand offered to upgrade my “medium” sized popcorn to large for only a dollar more. I thought US$7 was already outrageous and kindly declined.
Upselling certainly isn’t new for hotels, either. Obviously, upselling room inventory, recreation and special services is more common in times of high demand. But even during this recent tough economy, hotels have been practicing effective upselling techniques.
Hotels use CRM (customer relations management) software programs successfully to send e-mails automatically to confirmed guests over future dates where more expensive rooms and suites are forecasted to be available. Typically, the message offers upgrades to more deluxe rooms or suites with more amenities and/or preferred views or oceanfront location for US$100 or more. Most offer incentives for front desk and reservations personnel, too. And, most importantly, these programs are very trackable.
The value of repeat guests
It costs six times more to attract a new guest than it does to keep repeat guests. A repeat guest will outspend one-time guests 5-to-1. Hence, hotels maintain profiles on their most preferred or valued guests. Purchasing contact info from database management companies for potential guests that match repeat guest profiles (age, gender, income, buying preferences, marital status, children, etc.) has become common practice today.
Conference centers continue to create upselling opportunities to build revenue on top of their CMP (complete meeting package) packages. One Southwestern, lake view conference center is successful in selling on top of the CMP package with a sunset sail and dinner on private yachts for those special “off property nights”. The typical CMP dinner allocation (taken in the property’s dining room) is US$25 to US$35 - - the yacht experience option can yield US$15 to US$25 more per head plus alcoholic beverages (not available for groups in the dining room).
An upselling champion
My own personal upselling experience dates as far back as my days selling meetings and conventions at the Century Plaza Hotel in Los Angeles. I learned from the master - - Conference service manager Bodo Lemke would join my meeting with the planner/decision maker during a final site inspection.
What a thing of beauty it was watching Bodo build on everything I had just sold. He would start by reviewing the menus I had provided the client and then with his enthralling German accent he would start upselling everything - - I could sense the client melting when Bodo insisted on goose livers or foie gras for starters. Then he would move on to why the group should have beef wellington for entries, and then, of course, the baked Alaska presentation for dessert, not to mention the three different wines, center pieces, special tableware and table cloths and extra waiters to boot.
By the time Bodo was finished with the client, he had added a minimum of 30% to the groups banquet budget. But when that moment of truth arrived, Bodo and the banquet team delivered big time and the client had nothing but praises and thanks.
Value and price
Let’s close with my sharing a quintessential upselling anecdote from Beckwith’s book - - all about you setting the price, you establishing the value of your product/service.
A woman strolling along a Paris street spotted Pablo Picasso sketching at a sidewalk café. The woman asked Picasso if he might sketch her, and charge accordingly. Picasso agreed and in just minutes, he handed her an original Picasso.
“And what do I owe you?” she asked.
“Five thousand Francs,” Picasso answered.
“But it only took you three minutes,” she politely reminded him.
“No,” Picasso said. “It took me all my life.”
Message here: never commoditize or devalue your product or service.
David M. Brudney is a charter member of International Society of Hospitality Consultants
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