Mastering the Upsell to Boost Average Order Size

Every floor dealer wants to boost their revenue. There are really only three ways to accomplish this: increase the number of transactions; increase your overall margins; or increase the average size of your transactions.

This column focuses on increasing transaction size. One of the most effective ways to make this happen is by upselling. Here are some examples of upselling in the hospitality and travel industries.

The Dessert Tray
I was at an upscale restaurant with my wife and business partner, Jolyn. Our evening started with our server asking whether we’d like something to drink while we looked at our menus. Jolyn ordered a glass of wine, while I ordered a gin and tonic. After our drinks arrived the server asked if we’d like to start with an appetizer. We both ordered one. Part way through our meal the server asked if we’d like more drinks. I ordered a second gin and tonic. By the end of dinner we were both quite full, so we planned to skip dessert. However, when the server arrived with a tray full of the most decadent desserts, we couldn’t resist and ended up splitting a crème brulee.

Upon reviewing the bill, the main course cost approximately $100. With drinks, appetizers and dessert, the total tab was closer to $180. That’s an 80 per cent increase in revenue over the price of the main meal itself. The extra 80 per cent didn’t happen by chance; over the course of the meal our server upsold us four times, which she was trained to do.

McDonald’s Super Size
McDonald’s is another example of a restaurant that had an effective upselling strategy. (I use the word ‘had’ because it’s no longer using the method.) For years, the fast food chain was famous for employees asking, “Do you want to supersize that?” This single question encouraged customers to upgrade their meal; for a nominal fee, they could increase the size of their fries and drink. The seemingly small upsell had a significant impact on McDonald’s revenue, with studies suggesting customers who supersized their meal increased their transaction size by $0.50 to $0.90. When you consider the sheer volume of daily transactions at McDonald’s worldwide, this upsell strategy translated to millions of dollars in additional revenue each year.

Enhance your Stay
Upselling happens continuously in the travel industry, too. Often when you book a hotel room, you’re presented the opportunity to purchase a spa package, dinner or a guided city tour. These add-ons not only create a better experience for the traveller but also provide the hotel with significant additional revenue beyond the cost of the room.

Seating Upgrades
Airlines have an entire menu of upsells they offer each time you buy a ticket. Some include first class seating, other premium seating options, extra legroom, priority boarding, access to airport lounges and trip insurance. These upsells cater to customers who are willing to pay for added comfort or perks. For airlines, these upsells can significantly increase their overall revenue and profitability.

Part two in my three-part series on upselling will analyze and apply these examples to the flooring industry so you can dramatically increase your average transaction size.

Jim Augustus Armstrong is founder and president of FlooringSuccessSystems.com, a company that provides floor dealers with marketing services and coaching to help them attract quality customers, close more sales, get higher margins and work the hours they choose. Jim can be reached at 530-790-6720 or [email protected].