The following post was originally published in January 2013.
A casual restaurant chain is a great place to study upselling. Recently, I stopped in at one of my favourite spots for a quick dinner. Time was tight, so I ordered as soon as I was greeted, without ever looking at the menu. I went for my ‘usual’. Except that something ‘unusual’ happened. I was offered a choice: “would you like regular or sweet potato fries?”
The truth is, I knew that I was being sold, but I wanted to play the game out. The question was posed in such an unassuming way – as if I had a choice between two equal alternatives – that I simply made my pick. I decided to try something different and chose the sweet potato fries. That decision cost me $3.00. In the grand scheme of things, $3.00 is not a big deal. In context, however, this was a significant upsell – a full 30% premium over what I would have paid for the meal if I had simply chosen regular fries. Top marks to the waitress and the restaurant for a successful upsell.
Every day, in restaurants across the country, patrons are presented with an A or B choice without any disclosure of the cost implications of that choice. Here are a few of the more common pitches:
- “sparkling or flat water?” – both of which are bottled, and therefore an upsell to tap water
- “with or without ice cream?”- presented as if ice cream is included unless you don’t want it!
- “garden or caesar salad?” – the latter being an extra charge
The A or B Choice method is a proven revenue enhancement winner. In the absence of price disclosure, however, the patron is nearly always “snookered”: embarrassed to ask if there is an extra cost for the more tempting choice and reluctant to complain after the fact because (they reason) it was their own mistake.
Revenue enhancement that makes your customer feel regret (aka post-purchase dissonance) may be generating short-term profits, but hurting the business in the long haul. I may highly recommend the restaurant to my friends, but I will likely also share this story of the $3.00 surprise.
The Bottom Line
The A and B Choice method is not exclusive to the restaurant trade. Many businesses can use this technique to substantially increase revenues per transaction. The challenge is managing price disclosures (especially where regulations require it) and customer satisfaction through and following the pitch. For help crafting winning strategies to drive revenue growth in your business, contact Stratum Five today.