Up-sell Training Creates Additional
Revenues
By Doug Kennedy
Date: 2010-09-10
Even with the lodging industry starting to rebound, most hotels
these days could still use another revenue source, especially one that is
generated with relatively little effort and cost. Yet many still overlook the
opportunity to upsell guests to higher-priced options. With a little planning
and effort, properties can easily turn-on the faucet to this revenue stream and
reap the benefits immediately.
Even with the lodging industry starting to rebound, most hotels these days
could still use another revenue source, especially one that is generated with
relatively little effort and cost. Yet many still overlook the opportunity to
upsell guests to higher-priced options. With a little planning and effort,
properties can easily turn-on the faucet to this revenue stream and reap the
benefits immediately.
While upsell opportunities vary greatly according to a hotel's inventory of
accommodations, most all properties have some potential to upsell guests to:
- Special room types, such as junior suites, one bedroom suites, suites with
special features such as whirlpool baths.
- Preferred views and resort locations.
- Special "exclusive" floors such concierge or executive level floors.
- Packages that include additional amenities, services, or activities.
There are generally two opportunities for upselling, with the most obvious
being the chance to upsell in advance during reservations inquires.
Increasingly these days it seems the best opportunity to upsell occurs during
the registration because:
- Guests may not be aware of
upgraded options, especially when the reservation was made by third party
such as a travel agent, administrative assistant, or function planner.
- Voice reservations agents may
have failed to convey the value of the upgraded options, or worse yet,
failed to mention them at all.
- The guest's needs might
change while en route. Business travelers, for example, might have pop-up
meetings or projects to work on, requiring additional workspace in their
rom.
- The impulse of the moment
might cause guests to be more receptive to upgraded options, especially after
a stressful day of travel. For example, when mom and dad were planning the
trip it seemed like a good idea to share a room with the two kids, since
"all we're going to do is sleep there anyway." Yet after 8 hours in the
minivan the adjoining room or suite starts looking like a great option.
Strategies
And Tactics For Upselling
Whether upselling over the telephone or at registration, here are some
strategies that your staff can use to optimize profits from this revenue
stream:
When Upselling Over The Telephone:
- Always offer a menu of
options. Whether starting from the top and working down, or using a
bottom-up approach, the key is to always give guests a menu to chose from.
Remember that if you don't mention these options, they effectively don't
exist for the guest.
- Adjust your upsell method
according to clues provided. When guests indicate price sensitivity by
saying "what's your cheapest rate?" use a "bottom-up" approach by
mentioning the lower-rated option first, then referencing only the incremental
difference for the next category such as "For only $25 more you will
receive..." When callers convey a urgency and no price sensitivity, such as
by saying "Hi, I want to make a reservation...," use a top-down approach to
mention the higher-rated categories first. With this method you can
drop-down to the lower categories if necessary; just be sure to reinforce
that even the lower-rated accommodations are still a good value.
- Demonstrate the value
received. Be as specific as possible. Rather than saying "Deluxe rooms
have a view," say "In this room you can look out your window and see..."
Rather than saying "The concierge floor has a lounge," say "As a guest on
this floor you'll have 24-hour access to our executive lounge, which
includes..." Rather than saying "This is a 600 square foot suite with a
fully equipped kitchen," say "Since you're traveling with your family,
you'll love having all the extra space this suite provides. And the
kitchen will be nice if you want to make breakfast or bring back take-out
one evening."
- Avoid making lower-rated
options sound undesirable. This is especially important when using a
top-down approach, or when guests decline the upsell offer. Be sure to
reinforce the positives of the lower-tiered rooms with statements such as
"With this option you will still receive all the same amenities and
services..." or "Although this room is a little smaller, it still has..."
- Use personal recommendations
that tie into their stated needs. "Since you're traveling on business, I'd
definitely recommend the executive level rooms..." "Since you are traveling
with a family, our suites would be just perfect for you...."
When
Upselling At Registration:
- Reconfirm the pre-reserved
accommodation; reassure the guest that they already have a nice room.
Avoid making the options they've already selected sound undesirable and
instead say "Mr. Johnson, we have you confirmed in one of our ______
rooms, which I'm sure you will find quite comfortable..."
- Probe to find out if the guest
is aware of available upgrades with statements such as: "Did your (travel
agent or assistant) have a chance to tell you about our ____ rooms?" or
"May I ask if you are familiar
with our suites?"
- Present the availability of
upgrades as a unique opportunity by saying: "We've had some of our ____
rooms open up this evening..." or "We're offering a special rate to help
familiarize our (repeat or first time) guests with our business suites..."
- Utilize incremental sales
techniques, especially since in their minds the original room rate has
already been paid. "For only $25 more, I can offer you one of our _____
rooms."
- Mention higher rates as a
reference point to position lower rates as being a good value:
"These rooms usually run _____, but because of
(special circumstance) I can offer you a special rate of _____."
Structuring Rates So That An Upgrade Is A
Reasonable Value
Most properties market a range of rates to various market segments. However,
groups, high-volume accounts, or guests participating in special discount
programs, are only offered their special rate for the least expensive room
type. Upgraded accommodations, if offered at all, are at rack rates. The end
result is that the additional cost to upgrade does not justify the value
received.
For example, if the rack rates are $100 for a regular room and $135 for deluxe,
a $35 difference seems reasonable. However, when a special corporate rate of
$79 is offered for the regular room only, the upgrade fee, which is now $56, is
effectively out of reach.
To work around this, many properties are implementing a "flat rate" for
upgrading. In this scenario, the guest always has the option of upgrading for
the same fee, regardless of what rate they qualify for. So whether it's a
corporate, group, government, or promotional rate, the investment for the
upgrade is reasonable. Best of all, additional revenue is created from rooms
which might have been given away at lower rates anyway!
Recognition And Incentive Programs.
A key ingredient in any upsell program is to measure the results and to
implement a recognition and/or incentive program. Front desk upsell incentives
are especially easy to justify, as the upsell can be documented. Reservations
incentives are sometimes more controversial, because the possibility exists
that guests might have requested the upgrade to begin with. If this is a
concern, simply set a "quota" for upsells based on your current trends. In
other words, if reservations agents typically sell 5 suites a week, then make
that a quota and only pay out incentives on the sixth upsell and beyond each
week.
Most incentives reward the individual associate for each upsell, with either a
predetermined cash amount, with points that can be redeemed for prizes, or
perhaps with days off with pay. (Cash incentives should be paid separately to
help differentiate rewards from base salary.) Alternatives are team incentives
where everyone who works during a given time period (i.e. shift, day, or week)
is rewarded equally for upsells which occurred during that period.
Regardless of which incentive program is selected, it is important to post the
results in a prominent area on a regular basis. This helps spark the
competitive spirit, and reminds all associates of the potential to achieve the
same rewards being earned by the top performers.
By focusing your front desk and reservation team's attention on upselling, by
providing training on the tactics for doing so, and by measuring and rewarding
the results, your property can turn-on the faucet to this extra revenue stream.
Along the way, your guests will enjoy utilizing the extra space, upgraded room
features, and special services they might not have otherwise considered.
- Doug Kennedy
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