Upselling or upgrading? Either way, Your Hotel Benefits

 

Contributed by Nathan Nokes, Key Client Success Manager, SHR

We’ve all been there.

We browse Amazon for deals on the latest gadget and click a mid-priced unit for details. The photo looks like what you want, description is what you need--but wait! What’s this? A chance to bundle my purchase with other complementary goodies. And, you think, hey, they’re right. I could use this stuff with my new instant-rice pot.

And therein lies the psychology of upselling and upgrading. Knowing how and when to use them both can make all the difference in how successful your hotel will be in reaping their revenue 

rewards like this Wine Country client did—and pleasing your guests.

First…some definitions.

An Upgrade: Something the guest gets anyway, but could get a better one.

An Upsell: Something the guest doesn’t need, but can be persuaded to think they must have.

Upgrades

There are two types of upgrades; complimentary and paid. They each have their places and best-uses.

Complimentary
Have you ever gotten an email after you chose your room that said something like “Hey, because you’re a gold member, we’re upgrading you!” This is where the idea of Gold or Diamond members comes into many hotel business plans as it’s based on loyalty and personalization. These are good faith upgrades and really don’t cost you anything in the scheme of things. Easy, right? 

Also, freebies like this can come in very handy to turn around an uncomfortable situation, perhaps a misunderstood check-in time, or a missed wake-up call. This type of upgrade use is known as “service recovery.”

Paid
Well, these are easy to understand because they are probably the main goal for most hotels in the upgrade game. And bonus: You can use these types of paid upgrades to fill in the gaps where a full-blown loyalty program may be missing (most independent hotels don’t bother with traditional loyalty programs anymore anyway.)

Here’s a typical scenario. Your guest books a room overlooking the parking lot. You send them an email that says “For $10 more, we’ll give you a room with an ocean view.” And who wouldn’t love that? Bingo for you and for your guest.

Upsells

There are definite steps to figuring out your hotel’s best uses for upsell offerings.

Step #1 Look around.
Look at your market first; who is around you?

Disneyland? Then go with family breakfasts.

Business travelers? Then go for premium/high speed WiFi.

Couples? Romance add-ons, for sure. Think a handful of perfect chocolate strawberries and a great (inexpensive) bottle of wine or champagne.

Have a lot of outdoorsy types? Check out the creative offerings this Reno Nevada client created.

Step #2 Be honest about costs.
Break down the real costs from start to finish. This means don’t just think about the cost of the actual items you are upselling. Think about the labor of your staff, too. Because interacting with a happy, unstressed staff will make the upsell that much better for the guest and make them want to do it again next time.

Step #3 Timing, timing, timing.
Get upsells in front of guests while they are online. If you can’t get them to purchase online, ask them again in an email or when they arrive to check-in. 

Empowering Your Staff

When it comes to offering upgrades and upsell opportunities, train your staff to be empowered to know the time and place for good faith give-aways, and when for-profit must be adhered to as well. Many hotels handle this by creating guidelines to help their staff decide on the freebies they can give based on the situation at hand.

After all, you don’t want to end up with a scenario where your hotel is giving away the lobby. Remember too, people talk on hotel reviews sites, so give them something good to talk about by pricing your upsells and upgrades fairly. That will give them more value without breaking the bank.

So, don’t be afraid to give a little to get a lot when upselling and upgrading. Just take your time and do it right.