How Selling From-Best-to-Basic Generates Higher Revenue Returns

Posted on Posted in Article-5, White Paper

UPSELLING IS OVERUSED & INEFFECTIVE.

THE NEW WAY OF SELLING THAT TURNS THE PROCESS UPSIDE-DOWN.

by Marty Desrochers

The primary goal at any Point of Sale is to keep it simple. Packages make our products easier for guests to understand. When we bundle products like animal encounters and IMAX films together with our facility’s general admission, arriving guests have an easier time making their decision. Traditionally, we present these packages to our guests as upsells, starting at the bottom, with General Admission, and working our way up the ladder—Good, Better, Best. Presenting products in order, From Basic to Best, in combination with traditional sales training (aka upselling) produces only mediocre results.

There is a better way…

 

 

Packaging Value

Bundling products in the form of Day Pass packages and Membership products make it easier for our guests to perceive value in what is being offered and to quickly make a purchase decision. Day Pass packages should include experiences and services that enhance the guest’s visit today. These inclusions must be useful to arriving guests on the same day they are visiting. It makes no sense to recommend products that do not connect with guest needs. Membership products, on the other hand, can include offerings that can be used on future visits. One example of a great Membership inclusion might be a voucher for an exclusive animal experience, early access to the facility, and other special experiences.  

 

 

Less Is More

In 1995, Columbia Professor Sheena Iyengar conducted the famous Jam Study which propelled her to instant fame. The study was designed to test whether offering a larger number of products had an impact on the consumer’s decision to buy. The results were surprising. Ten times more people chose to buy when offered a fewer number of products.

 

The Jam Study*

A grocery store in Menlo Park, California sets up a special display to sell jam. At certain times, the display had six flavors to choose from. At other times, the display had 24 choices. Each person who came by the sample booth was given a $1 coupon to purchase. The displays were up for a total of 10 hours. Here are the results:

 

The display with 24 choices

  • Number of people who stopped by: 145
  • Number of people who bought from the display (based on coupon redemption): 4
  • Percentage redemption: 4%

 

The display with six choices

  • Number of people who stopped by: 104
  • Number of people who bought from the display (based on coupon redemption): 31
  • Percentage redemption: 31%

 

What appeared to customer as a typical promotion was actually a sociological experiment. The attendants handing out samples were research assistants of one Dr. Sheena Iyengar, the S.T. Lee Professor of Business at Columbia Business School. She was studying the effect that the number of purchase choices has on the propensity to actually make a purchase.

 

This experiment seemingly proves that customers presented with fewer choices are 10 times more likely to purchase compared with those who are shown many choices. It has been upheld as a crucial example of choice overload, the idea that presenting customers with too many choices actually inhibits customer purchases. The idea of choice overload is counterintuitive; classical economic thought maintains that more choices are always better for the customer.

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* "Too Much Choice: The Jam Experiment." People-triggers. People-triggers, 03 Sept. 2013.

Arriving, our guests want to have the best experience possible. It’s also fair to say that they want options but, similar to findings in the jam study, presenting a limited number of great choices is the best way to keep guest attention during the transaction.

At a zoo or museum, for example, the correct strategy would be to design a line of 3-4 Membership products maximum. Offer too many choices and guests get overwhelmed, shut down, and default to the lowest price—the General Admission ticket.

The best opportunity for growing revenue occurs when we are able to connect with arriving guests and to provide them with great experiences and lasting memories.

 

Traditional Upselling

Having established that product categories typically range from “good” to “better” to “best,” traditional upselling begins with the seller offering the basic product first—often General Admission—and then moving up the line, to the “better” product and ultimately to the “best” product. The seller shares one product at a time, asking the guest if they “want to do” the progressively more inclusive (and more expensive) product. This traditional approach of upselling is tedious and ineffective.

Trouble in River City (below) demonstrates how presenting products from “good” to “better” to “best” fails to yield positive results.

 

 

Trouble in River City

Brunswick is one of the top manufacturers of pool tables in the world and they’ve been in business for the last 170 years. A few years ago, Brunswick also operated a chain of retail stores around the country.  Within their stores, they offered an array of pool tables from the low end to the very high end. The tables inside Brunswick’s stores were arranged on the showroom floor with the cheapest pool table located near the front doors and the higher-priced, more luxurious models situated at the back of the store.  Brunswick had identified that their top-selling pool table was the one positioned second from the front doors.  Retail sales throughout the chain were steadily declining and so the company did what all good companies do when they need help growing sales, they hired an outside consultant to review the operation and provide recommendations. 

 

When the consultant finished their review, they had only one recommendation for Brunswick--flip the order of the pool tables within the stores.  The consultant recommended that Brunswick move all of the expensive pool tables forward and to the front of the store and relocate the cheaper models to the back of the store.  Brunswick made the change...and almost immediately, sales improved.  The tables at the front of the store--now the more luxurious and more expensive models--began to sell very well. In fact, the number one selling pool table in the entire store was now the model positioned second from the door.  The Brunswick story just goes to show that when consumers are exposed to quality, value, and higher-prices first, they are more inclined to purchase those products.

 

 

 

Selling From-Best-to-Basic

Presenting products From-Best-to-Basic is the exact opposite of upselling.  As the story on the previous page illustrates, when consumers are presented with higher-valued and higher priced products first, they become biased in favor of the higher value and price. 

At the front gate, we can employ a similar technique to present product options From-Best-to-Basic. The illustration below shows how Membership products might be offered From-Best-to-Basic:

This process works regardless of the time of year; no matter if it is peak season, slow season, or somewhere in between, the psychology is the same—arriving guests buy more when we flip the order and present our products From-Best-to-Basic.

 

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