Upselling is an absolutely essential part of healthy sales figures in the hospitality industry. The most obvious benefit is increased revenue. When you successfully upsell a product or service, you’re either upgrading the quality and/or value of what your customers are buying or adding something onto their bill that wouldn’t have been there before. This can be a big money maker, illustrated by the fact that 59% of hotel guests are interested in upgrades and additional services.
However, whether you operate a vacation rental channel manager or a chain of hotels, upselling can present your business with many additional benefits. These include increased occupation rates and use of facilities, strong customer retention and loyalty, and higher numbers of referrals.
Now, all these benefits sound great, but you might be wondering how you can actually generate more upsells for your hospitality business.
Upselling in the hospitality industry
Upselling is a great tool, but it’s important that it’s done well, or else it can come off as pushy, irritating, or downright unnecessary.
We’ve put together a comprehensive guide that’ll help you integrate upselling into your sales model and do it right. Whether you opt for trying well-timed sales calls, new kinds of social media posts, or an exciting loyalty program, there’s truly something for everyone in our breakdown.
Keep reading to find out which option best aligns with your business and start generating those upsells!
Making sales calls
Many professionals are skeptical about trying to upsell over the phone because they worry about customers feeling annoyed about being called. While this can certainly be the case, phone calls are incredibly important sales tools. In fact, 92% of customer interactions still happen over the phone.
One of the key tips to keep in mind when upselling over the phone is timing. While it’s true that many people get annoyed with phone calls that are repetitive or come out of the blue, statistics show that customers overwhelmingly prefer human interactions like phone calls when communicating with companies.
Rather than calling customers with an upselling opportunity seemingly out of nowhere, try to call them at a time when you might have called them anyway. In the hospitality industry, that might be immediately after an online booking, after they asked a question online, or a couple of days before their reservation begins. That way, you can seamlessly integrate your upsell into your booking confirmation or reminder.
In addition, you’ll always want to make sure that the services or upgrades you’re trying to sell align with your customer’s profile. There’s certainly no use upselling a fun family activity to a couple without children. Make sure that you use the information you have about your customers to give your sales calls a better chance of success.
Let’s take a hotel booking for a family of four, for example. They booked a small, 2-bedroom suite and no additional services. They would be excellent candidates for a room upgrade at a great price. You might also consider telling them about fun activities for their children either at your hotel or in the surrounding area.
There’s even software like Callpage out there nowadays that can help you with your sales calls and callbacks if you’re looking to scale your communications.
Posting on social media
Another way that various hospitality industry businesses are upselling is by harnessing the power of social media. Platforms like Instagram and Facebook are great because they provide customers with a visual element, which is great for upselling products or services. In fact, a 2020 report showed that 83% of Instagram users discovered new products or services while using the app.
Showcasing your services on social media is also great because it provides additional opportunities to pique your customer base’s interest. If your customers see something that interests them on your social media page, that gives you a great opportunity to follow up with a message or even a phone call.
When thinking about how to upsell your services on social media, consider options that have a strong visual element, like the following:
- Spa & wellness services
- Rental services (think cars, bicycles, kayaks, and the like)
- Leisure activities
- Family or children-focused activities
- Special hotel amenities
- Special room amenities
- Food & beverage services
For example, check out how the luxury Fairmont hotel in Whistler, Canada uses their Instagram to showcase their food and beverage services in the image above. They further solidify their image as a romantic destination and make an appealing case for couples to dine on-site.
Another way to upsell on social media is by advertising packages and promotions that show off special additional services and encourage people to upgrade their purchases. Above, the Four Seasons Chiang Mai is advertising exclusive benefits and activities for guests who stay with them for more than a month.
Offering upsells face-to-face
Giving customers the opportunity to upgrade a service face-to-face is a huge untapped resource in the hospitality industry. It’s often easier to communicate effectively with customers in-person, whether they’re sitting in a restaurant or checking into a hotel. It’s also a great opportunity to add a personalized touch to your upselling pitch without any pressure.
Let’s take the example of upselling in a restaurant atmosphere. In this setting, face-to-face conversation is the best opportunity you have to encourage customers to level-up their food or drink choices. There are a couple easy ways to do so:
- Keep in mind which items on the menu are the most expensive or have a high profit margin. That way, you’ll be able to recommend them to customers quickly if they’re looking for a special treat.
- Offer extras or sides that customers can easily add to their meals.
- Know your menu. That way, you’ll be able to make recommendations based on customers’ specific needs and preferences.
- Suggest courses. You’ll never know whether your customer will want an appetizer, dessert, or coffee until you ask.
- Be honest and genuine. Even though you’re trying to upsell products, you don’t want to come off as irritating or overly pushy. The best way to avoid this is to make authentic suggestions that you truly believe your customers will enjoy.
Overall, if you’re interacting with customers face-to-face, take advantage of the deeper communication, friendly rapport, and high level of personalization you can offer them and make those upgrades happen.
Developing a loyalty program
Last but not least, putting together an appealing loyalty program is another popular way to generate upsells. It’s also a great all-around sales strategy as it fosters customer loyalty and retention. Don’t forget, 65% of companies’ business comes from existing customers, and new customers are much more expensive to gain than returning customers.
There are different kinds of loyalty programs out there. Some offer special rewards and discounts, while others operate with VIP access and points systems.
Whatever the case, it’s important that your loyalty program is a win-win situation. It should provide your customers with meaningful perks that keep them coming back, while providing you with a loyal customer base and increased revenue. After all, returning customers spend 67% more than new customers on average.
Let’s take the Mariott Bonvoy, the Marriott hotel chain’s rewards program, for example. Marriott Bonvoy has various levels of benefits depending on your membership level, extending from special member rates to late checkouts to lounge access to guaranteed room types and upgrades. Membership levels depend on how many nights guests stay at a Mariott hotel per year, encouraging them to keep coming back and increase their membership level.
On top of that, members can earn points while staying at a Mariott hotel with car rentals, flights, credit cards, dining experiences, and more. Those points can then be redeemed for things like gift cards, travel experiences, and hotel bookings.
All in all, loyalty programs are great ways to foster long-term customer relationships and encourage them to upgrade their services at the same time.
Start benefiting from excellent upselling strategies
As you can see, there’s money just waiting to be made by upselling in the hospitality industry. Not doing so is like leaving a rich resource virtually untapped, and that’s just not good business sense.
When integrated effectively and genuinely, upselling can give your business a huge boost. Not only does it increase revenue, but it also ensures higher occupation rates and use of facilities, develops meaningful customer relationships, increases customer retention, and even generates referrals. What’s not to love?
Consider your business model and think about which upsell generation strategy would work best for you. If you love connecting with customers on the phone, consider integrating them into your sales calls and correspondence. If you’re working on developing your social media presence, try showcasing upgrade opportunities and special services in your posts.
We can’t wait to see what increased upsells can do for your overall sales and business success.