January brings a sharp decline in sales across hospitality, and optimising sales revenue is a hot topic once again.
Our recent analysis found that certain industry sectors have suffered as much as a 60% drop in sales this month compared to December trading. If businesses are to thrive at this barren time of year, upping customers’ spend per head is an important strategy. Here are our top tips for upselling for managers and their teams.
Cross-selling and the ‘Rule of 25’
True upselling, convincing a buyer to purchase a completely different, more expensive item, is rare in hospitality. A customer asking for a sandwich is unlikely to take kindly to being asked to buy a steak instead. Cross-selling, the addition of extra items to complement a main order, is a far more effective approach. The sandwich customer is far more likely to be receptive to the suggestion of adding a portion of chips or a coffee to their meal. A useful guide to staff, the ‘Rule of 25’ is a sales principle that suggests that items offered for upsale should add around 25% total value to the order.
Focus on High-Yield Items
The most effective upselling offers items that yield high profits for minimum labour time. Extra chips or sweet potato fries and additional soft drinks are prime examples of this. While coffee is a high-yield item, depending on your style of coffee machine, it can be time-consuming and labour intensive to serve. Team members should be careful to only upsell coffee at appropriate times. Taking three extra minutes to make the perfect flat white with a queue three deep at the bar is not going to do any favours for your bottom line or customer experience.
Premium lagers are a prime candidate for upselling
Premiumisation
Although footfall fell at many hospitality sites in 2017, particularly wet-led pubs, average spend per head increased by three percent. This suggests a market where customers are increasingly keen to spend a little extra on high-quality products – ideal for upselling. A fruitful technique is suggesting premium brands when a customer doesn’t specify. A vague request for a ‘lager’ or ‘glass of red wine’ should be seen as an invitation to offer higher priced options in the category. Faced with a clear and positive suggestion, the customer is likely to agree.
Eyeline is the Buy Line
Studies into point of sale advertising reveal a significant increase in demand for items given a more prominent position on the bar, or displayed clearly on posters or television screens. It sounds overly simple, but if you want customers to buy more expensive items, simply letting them know they are available has been shown to boost demand by a third. For smaller operators who don’t receive centrally prepared marketing materials, creating effective adverts has never been easier. Templates and free design software are easily accessible online.
Communicate and Incentivise
With upselling, as with most aspects of running a business, the better managers communicate with their staff, the better the results will be. Team members should be furnished with clear information on which items they are expected to upsell and when. It can be a great idea to incentivise your team by offering a reward to the employee with the most successful upsells in a given period, though desire to win should never come to the detriment of customer service!
Think Long-Term
Maximising immediate sales and profits is typically good for business, but shrewd operators know that driving long-term profitability through repeat custom is a superior goal. Well executed, upselling can form part of a tasteful, personal service style that will deliver special experiences, keeping customers visiting your site time and again. Poorly or inappropriately delivered, it can come across as pushy and harm your chances of winning repeat custom. It’s important to know your audience when upselling, and lifetime custom should be prioritised over a quick sale.
