Paul Shrimpling a leading marketing advisor to UK accounting firms recently published the following on upselling.
“Upselling can have a transformative effect on profits and client satisfaction too. Here’s a classic and simple example of upselling used by the tea vendor on Fridays train journey home when I asked for a cuppa…
“Sir would you like your tea in this larger cup for only 20p extra or would you like less in this smaller cup?”
What would you opt for?
£1.90 vs £2.10 = 20p
I bought the larger amount.
Circa 10% price increase for probably 20% more hot water.
Same tea bag, same serviette, same stirer. Slightly bigger cup. A little more hot water. Cost of extras? 2p or 3p? Let’s be extravagant and say 5p. So 15p additional profit.
He mentioned the increase ‘only’ 20pence – clever. Showed me the large cup first – also clever. Then the small cup so I can see the value clearly for 20p. I said yes.
Then he went for the cross sell – anything else – and I bought some shortbread!
No big deal to me. Ignoring the biscuits how much pure profit is this worth?
There are nearly 1.5 billion train journey’s each year in the UK. If only 5% of these buy tea and only half these go for the 20p upsell then the train companies make 15p x 37,500,000 = £5,625,000 Extra profit from a simple upsell!
How are you making upsell strategies work in your business?”