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Research shows upselling is vital for many businesses

17 February 2012 by
Research shows upselling is vital for many businesses

Hospitality business operators are well aware of the benefits of upselling but many of them stop short at upselling everything on the menu, and less than two thirds have trained their staff to make sure they increase the spend of their customers.

That's the finding of detailed research into upselling by Caterer and Hotelkeeper, in association with potato product manufacturer Lamb Weston.

The survey of 127 hotels, restaurants, pubs and other hospitality businesses showed that an overwhelming 83.6% of respondents regarded upselling as a vital part of their business.

Most of those who participated (51.6%) also decided only to upsell specific items, but 36.1% said that they upsold the entire menu.

And it appeared that businesses had good reason to place their faith in the importance of upselling, with nearly 87% finding that rather than putting customers off, upselling was either a "fairly effective" or "very effective" part of their business strategy.

Despite that, it was clear that more could be done to train staff in upselling. The results of the survey revealed that 58.1% of respondents trained staff to offer advice that would help to increase the spend of their customers.

An opportunity to upsell that is present on virtually every menu is chips. Caspar Gesthuizen, trade marketer north west Europe & UK at Lamb Weston, says that by offering different potato products, such as sweet potato fries or wedges, guests can try something new and caterers have the chance to achieve higher margins per portion served.

"Sweet potato fries offer a greater yield (up to 25%) and increased plate coverage, so more servings can be provided per case. Their premium quality also gives caterers the opportunity to generate more profit; sweet potato fries allow for a 20-30% mark-up," he adds.

"Staff should ‘upsell', asking every time they take an order if the customer would like to upgrade their fries."

THE WISDOM OF WORDS

Respondents shared their theories on how best to maximise spend per head, which included:

â- Honesty and no hidden tricks
â- Encourage different types of business - weddings, for example, invariably have a different effect on your trade
â- Offer complimentary petit fours to stimulate coffee sales
â- Set the table for a three-course meal - it plants the seed in the customers' heads that three courses is normal
â- Suggest snack food to accompany all types of drinks

THE RESULTS

Which of the following would best describe your view on upselling?
(83.6%) It is a vital part of our business
(16.4%) It discourages custom

Which of the following best describes your current strategy for upselling?
We upsell the whole menu (36.1%)
We only upsell specific items (51.6%)
We don't upsell (12.3%)

How effective do you find upselling for your business strategy?
(24.5%) Very effective
(62.3%) Fairly effective
(13.2%) Not very effective

How successful are your current strategies to maximise spend per head?
Very successful (15.1%)
Fairly successful (72.6%)
Not very successful (12.3%)

How frequently do your staff upsell?
(68.0%) Always
(31.1%) Rarely
(1.0%) Never

Are your staff trained to offer advice that will help increase the spend of your customers?
Yes, all of them (58.1%)
Yes, but only a few of them (41.0%)
None of them (1.0%)

What kind of an impact did upselling have on spend per head?
(23.1%) Significantly increased
(73.6%) Slightly increased
(3.3%) No impact

the research
Research for Upselling was conducted by Reed Business Insight from 2-9 February, with 127 responses predominately from the owner-operator senior executive level.
http://www.rbinsight.co.uk" target="_blank" rel="noreferrer">www.rbinsight.co.uk

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