Upselling: Retail vs Hotel

Upselling is a technique used by businesses across various industries to increase revenue and profits by persuading customers to buy additional products or services. However, the approach to upselling can differ depending on the industry, and in this article, we will explore the differences between upselling in retail and hospitality.

Retail Upselling

In retail, upselling refers to the practice of suggesting complementary or higher-priced products to customers at the point of sale. Retailers aim to increase the average order value and drive more sales by providing helpful suggestions to customers. For example, a salesperson at a clothing store might suggest a matching accessory to go with the garment the customer is purchasing. Or a customer at a fast-food restaurant might be offered an upgrade to a larger meal or additional sides.

However, it is essential to strike a balance between being helpful and being too pushy. Pushing customers too hard can turn them off and harm the brand's reputation. Retailers should focus on providing value to customers by offering helpful suggestions that genuinely enhance their purchase experience.

Hospitality Upselling

Upselling in hospitality is a similar strategy, but it is applied differently in the context of hotels, restaurants, and other customer-facing businesses. In the hospitality industry, upselling refers to the practice of offering customers premium services, products, or experiences that enhance their stay or meal.

For example, a hotel receptionist might offer a room upgrade or suggest additional services such as a spa treatment or room service. Or a server at a restaurant might suggest a premium wine or cocktail to go with the meal. In the hospitality industry, upselling is not just about increasing revenue; it is also about enhancing the customer experience and creating a more memorable stay.

Upselling in hospitality is often part of a broader customer service strategy that seeks to build loyalty and repeat business. By offering personalized recommendations and exceptional service, businesses can create a more positive impression on customers and encourage them to return in the future.

Difference between Retail and Hospitality Upselling

One of the key differences between retail and hospitality upselling is the importance of building a relationship with customers. In hospitality, upselling is often relationship-oriented, focused on enhancing the customer experience and building loyalty. On the other hand, in retail, upselling is more transactional, focused on increasing the order value and driving more sales.

Another difference is the timing and delivery of the upsell. In retail, upselling is typically done at the point of sale, where the customer is about to make a purchase. In contrast, in hospitality, upselling is often done before or during the customer's stay or meal. This allows businesses to anticipate and fulfill the customer's needs proactively, creating a more seamless and enjoyable experience.

Combining Upselling and Loyalty Programs

AMResorts is a well-known luxury resort company with properties in Mexico, the Caribbean, and Central America. One example of their successful upsell offer is their "Preferred Club" program.

The Preferred Club is a premium level of service that offers guests exclusive amenities and privileges during their stay. Guests who opt for the Preferred Club upgrade receive access to a private lounge, personalized check-in and check-out, upgraded in-room amenities, and access to exclusive areas of the resort such as private beaches and pools.

AMResorts uses a variety of methods to promote the Preferred Club upsell. Upon booking, guests are presented with the option to upgrade to the Preferred Club, with a clear description of the added benefits. The resort also sends pre-arrival emails to guests who have booked but not yet arrived, promoting the Preferred Club upgrade and offering additional incentives to upgrade, such as discounted spa treatments or excursions.

During the guest's stay, the resort staff is trained to promote the Preferred Club upgrade as part of their standard customer service interactions. For example, a concierge might offer a guest a complimentary breakfast at the private lounge as an incentive to upgrade.

The success of the Preferred Club upsell program can be seen in the high percentage of guests who opt for the upgrade. According to AMResorts, guests who book the Preferred Club tend to be more satisfied with their stay, which can lead to positive reviews and repeat business.

In conclusion, the Preferred Club upsell program from AMResorts is a great example of an effective upselling strategy in the hospitality industry. By offering guests exclusive amenities and personalized service, the resort is able to increase revenue while also enhancing the guest experience.

Checklist for Better Upselling in Hotels

1. Upselling can be a powerful tool for hotels to increase revenue and improve the customer experience. Here is a checklist for better upselling in hotels:
2. Train your staff: It is crucial to train your staff on how to upsell effectively. They should be knowledgeable about the products and services offered, and they should be able to provide personalized recommendations to customers.
3. Provide value to customers: Focus on providing value to customers by offering helpful suggestions that genuinely enhance their stay or meal experience.
4. Use technology: Utilize technology such as pre-arrival email, front-desk upselling tools, and in-house guest communications to offer upsell suggestions to customers throughout their journey.
5. Anticipate customer needs: Train your staff to anticipate customer needs and offer personalized recommendations based on their preferences.
6. Be transparent: Be transparent about the pricing of upsell items and the benefits they offer.