Saying Yes to Up-Sell is Saying No to Being Frugal

by David Ning · 40 comments

Emma and I went to a pretty fancy restaurant to celebrate my wife’s birthday.  After we sat down, our waitress pleasantly asked us “Would you like some wine tonight?”  We just experienced a form of up-sell.

What is Up-Sell
Up-sell is the act of suggesting a higher priced product or service to a customer who is about to purchase.  What we experienced at the restaurant is no different than the cashier at Starbucks asking us to buy a grande sized mocha instead of tall or at McDonald’s when the cashier asked whether we wanted a combo rather than just the sandwich.

What It Means for the Company
These forms of up-sell are very popular because it works.  While at the restaurant, almost everyone that she asked ordered wine.  If she didn’t ask on the other hand, I bet half of those people will forget to do so.

What It Mean for Customers Like Us
On many levels, up-selling is actually good for customers like us.  We are given a choice which helps us realize that there are better options for our purchase.  When we are at McDonald’s, we are reminded that we can get that extra drink and fries at half price by buying the combo.

There is however one negative side effect of up-selling because agreeing to buying the more expensive product is not a frugal practice.  We all know that we are not too disciplined when it comes to spending.  When we are given a choice to buy the better product, chances are we will.  At the restaurant, everyone that ordered wine ended up paying more.  They ordered it because they wanted it, not necessarily because they can afford it.

When someone gives us a choice for a better product, we might not instantly realize how it affects us long term.  Sure we had a great time drinking wine, but what about the mortgage payment due next month?

What We Should Do
Now that we understand what up-selling is, we made a very good first step in keeping our wallets intact.

We routinely make purchasing decisions and if you are like me, sometimes that decision happens on the spot.  We wait until we are at the register to figure out which combo we want, we ask for pricing on a product without doing research, and we really only decide what to buy until we see it at the store.

On the other hand, if we already know what we want before we have to decide, it would be much easier to assess the effects of the extra choice when it’s presented to us.  Just to illustrate, if we knew that we wanted two sandwiches with water before we go into McDonald’s, we won’t end up with a combo and end up paying more. Who really needed all the extra sweets and oil?

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{ 40 comments… read them below or add one }

Jimmy July 30, 2008 at 9:58 am

I just fought off the temptation to succumb to an up-sell of grand proportions about an hour ago.

I was in the mall and browsing engagement rings. After wandering into the first jewelry store, I was approached by a salesman who asked me about my engagement ring budget, which I informed him was no more than $3,500.

Almost instantly, he ran over and grabbed a ring with an $7,995 price tag and told me that I could purchase it for a steal at $4,800. Granted, the ring was absolutely gorgeous and I wanted it badly, but my practical side kicked in and I immediately told him that it was out of my price range.

It’s posts like this that help me to keep my spending / splurging in check. Thanks for everything you do.

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Raj Grover October 11, 2010 at 8:50 am

If you were buying a ring at a mall, you cannot be called frugal…. you overpaid for a ring to compensate the store owner for mall rent, sales people etc.

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Kay January 13, 2011 at 6:40 pm

some people may not know there are more frugal ways of paying for a large expense of this sort – you r Not the final judge of who is and isn’t frugal – there r degrees – i guess U r at the TOP.

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Robyn April 16, 2011 at 9:34 am

Well said Kay. Raj’s advice was true, but his tone was judgmental, and you pegged it.

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Kiwikid July 26, 2012 at 5:16 pm

Jeepers, if a sales person had done that to me they would have seen me vent my spleen in a very loud manner. It would have been peppered with four letter words too, and no fool isn’t one of them.

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Richard Wilson, hedge fund blogger July 30, 2008 at 3:13 pm

Great post. This reminds me of Dr. Cialdini’s Weapons of influence. The atmosphere is set, you are there to have a great dinner and everyone is just so nice to you. Good tool for sales and reminder for those being sold.

– Richard

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Penelope @ Our Fourpence Worth July 30, 2008 at 4:10 pm

Great post. I don’t drink and I rarely dine out, so the choice to order wine is never a difficult one for me. But when you do order wine, not only do you end up paying more for it, but you end up tipping more because your final bill is higher.

I worked at Togo’s, a sandwich shop, for a brief time several years ago. We were trained to always ask our customers if they wanted to add the combo – soda and chips – for $1.19. About 99% of the time, my customers responded yes or “why not?” just because I asked.

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MoneyNing July 30, 2008 at 8:04 pm

Jimmy: I’m glad it helped. There are times when spending more is appropriate and there are times when spending more is a result of a lack of plan. If you are prepared, you will be able to better reduce overspending.

Richard: Having a sales background, I can tell everyone that it definitely works very well. As a consumer, we just need to realize when it is a good choice for us and when it is really just a waste of money.

Penelope: There are times when ordering wine isn’t a bad choice but most of the time it’s really just a chance for us to spend more money.

Togo management is smart. They know that it is an easy way to make more money for them. If anything, their profit margin is much higher for the drink and chips than the actual sandwich.

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Misch July 31, 2008 at 1:23 pm

*sigh* I had to up-sell my butt off working at a local movie theatre. It was part of your job… someone wants a small drink, you try your hardest to make the large irristable. Yes, it is more product for your money but do they really need the exta 6 gallons of bathroom-break-inducing soda? No.

At least most of the time, my customers said no politely because they understand we’re forced to do it. 1 out of 10 though would give me a 5 min lecture on getting what they asked for, and telling me to keep my yap shut and just dish the popcorn. Ah, memories.

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Misch July 31, 2008 at 1:28 pm

Yes, that should be *irresistible lol

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Allese July 31, 2008 at 2:21 pm

I really enjoyed reading this article. However, I don’t really think wine is an example of up-selling. Don’t get me wrong, wine quite definitely ups the bill and is always, always substantially overpriced at a restaurant.

That said, it’s also integral part of what many consider the fine dinning experience. Paired with the right foods, it intensifies the flavor and ambiance of an overall meal.

Obviously, I value fine wine and food, and thus I find it worth the extra money. Just because people may spend more on dinners does not mean they aren’t considering their financial responsibilities. One’s financial needs are mix shoulds (saving for retirement, a house, having an EF) and then value purchases (entertainment, cars, travel, food) which are very subjective.

This points to a larger issue. It’s possible to scrimp on everything and have a massive savings… but when is it worth it to spend?

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Atniz August 1, 2008 at 12:07 am

Never ever thought about this technique before. Most of the restaurant practicing it now. Just we don’t realize it. It is another business technique.

I think we can utilize this technique in online businesses too. I’m not sure how it is gonna work on blogging. But, the possibility of applying Up-Sell method in any business is endless. Thanks for giving out this great idea.

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Magnesium August 1, 2008 at 1:25 pm

I think this method is quite profitable, isn’t it?

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MoneyNing August 2, 2008 at 7:47 pm

Misch: I’m so sorry to hear. Do you actually make more commissions or does your manager just stand next to you listening to how you sell it to your customer?

Allese: It’s worth it to spend when you already have a plan to save and you are meeting that plan. Otherwise, it’s probably not worth it.

Atniz: No problem. I hope that as a consumer, you are able to recognize it and as a business owner, you are able to use it.

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Paul U August 2, 2008 at 11:48 pm

I don’t think that I would appreciate anyone doing some up sell on me.

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paulette August 3, 2008 at 1:19 am

I think its not being wise to spend for a product with low quality rather than purchasing a product worth the price and quality.

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Darlene August 5, 2008 at 4:48 am

My husband an I went out to dinner the other night…I wish we had just splurged on a little wine. But, the waitress told us the specials (no prices of course) and my husband ordered one. I figured, well everything on the menu’s around $15 or $20 the special can’t be that much more…HAHA WRONG…it’s was $35 I almost had a heart attack when our bill came out. But lesson learned…ALWAYS ask the price. Don’t know if this counts as upselling but I felt like a schmuck.

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Kiwikid September 24, 2012 at 2:05 am

Not trying to rub it in or anything but you’re part of a very big club. Hopefully you’ll remember next time. Painful lessons tend to be the best ones.

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Matthew Brundage August 6, 2008 at 9:23 am

I’ve noticed that many Vietnamese and Thai restaurants don’t upsell — in fact they don’t promote their food at all. Perhaps it’s a cultural thing.

Issues of frugality aside, if a waitress suggests an alcoholic beverage, I’m much more likely to try it. I want them to ask. It helps to rationalize the purchase, especially if no one else in my party happens to order alcohol.

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Cathy Sykes August 8, 2008 at 7:00 pm

The up-sell pressure is so all-pervasive now that just finding a non-combo option at a fast food place is nearly impossible. I also love the way the servers are become totally bewildered when you just ask for a sandwich and a water.

Going “non-combo” ruins their system. I went into Whataburger recently, asked for a grilled chicken sandwich and a water, then sat down. At Whataburger, they’ll bring your food to you…my server showed up with the sandwich, a soda and fries. I pointed out that I hadn’t ordered the soda or the fries and, totally bewildered, she turned and headed back to the counter….I caught up with her and pointed out that she still had my sandwich and could I please have it?

And they totally do not understand that although getting a “combo” is cheaper than ordering everything separately, it’s even less expensive to simply buy less food, period. (And better for your waistline too, LOL.)

Cathy Sykes
http://www.moneytospare.net

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Praveen, the simple trader September 26, 2008 at 9:25 am

Today, I experienced the opposite – one of those rare cases of a down-sell.

It made me feel good.

We have domestic service with Dish Network, and my wife wanted to add an international channel.

I called up to add it, and the guy told me I had to get a second satellite dish for $56.

Somehow we got disconnected (turned out to be lucky for me) and I called back and spoke to a woman.

She told me that, instead of paying $56 for a second dish, they now have a “super dish” that can take the place of both the international and domestic dishes. I could get my domestic dish swapped for this one for free.

So, now, instead of having to pay $56 and having 2 dishes wired up together on the side of my house, I’ll pay nothing, and have only one dish to worry about.

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Kiwikid September 24, 2012 at 2:11 am

Well that’s a con. Needing 2 dishes? Unless the satellites are in way way different orbits absolutely not necessary, which in your case is exactly correct, you didn’t need to get 2 dishes. 1 dish, 2 transponder thingies (don’t know what they are officially called) and you’re ready to go. Don’t even need a bigger dish. Total con job.

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Andrew @ Financial Services October 27, 2009 at 11:48 am

It’s definitely a great tactic by corporations but you can simply turn it down. Just stick to what you really wanna buy, that’s it. I recently went over and made a cash loan for a washing machine I was going to purchase, which included a radio with a cd player. Sales said it was a limited time offer so I kinda went for it. Did I need the radio, up to now I’m not sure.

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Primetime! November 3, 2009 at 2:13 pm

and to quote the original post:

“When someone gives us a choice for a better product, we might not instantly realize how it affects us long term. Sure we had a great time drinking wine, but what about the mortgage payment due next month?”

I know this is a stretch and I’m taking way out of context (Courtesy of MSNBC for showing me how to spin things) , but if upgrading to wine at dinner is going to impact your budget that badly, why are you going to dinner in the first place? That dinner and wine could be had from the comfort of your own home with wine for a fraction of the price with the up-sell of a little effort. Or you could just raid the dollar menu at the fast food joints.

Up-selling is an art, and happens in just about every form of marketing. Sometimes, it’s hard to notice or avoid. It’s how a business gets paid a little extra for their efforts.

Buying furniture- are they charging you for delivery and are you buying the protection plan on your new item? Yes, save $50 on delivery and go pick it up and when it breaks, no warranty.

Cars- when your shop asks you to replace your old fuel filter or dirty air filter, scheduled maintenance etc, are you going to say no just because it’s a few extra bucks, or you want your car to run like crap?

Groceries- 2 for deals are the classic up-sell. Buy two and save this (although its more than just one in most circumstances). Can’t hurt to spend an extra $1 and get a second box of hot pockets.

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July Luis December 8, 2009 at 7:18 am

I was shopping online yesterday trying to buy for my son a Super Mario Bros Game.. I stumbled upon a site called EZWINGAME…they are running a free contest this week for a free Nintendo… Wanted to know if anyone has heard of this site..and what they think…thanks

July

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Steve in W MA August 29, 2010 at 1:00 am

The reason the upsell is so effective is that it is positioned right at the point that you are ready to make the purchase. The momentum is on the sales side. Becuase we tend to be goal oriented, we want to get to the end of the transaction, and also we are attracted to the upgraded product with more “value” and additionally prefer to say “yes” to saying “no” when we are asked by a friendly/pleasant person.

You can counter this with the idea that “Thanks. For now I’m going to stick with this (my original purchase) . But I’ll consider that (the upsell) next time.

This keeps your attitude open and feels accepting while deferring the decisionmaking on the upsell to a future (and possibly nonexistent) time while also giving you a more of a chance to rationally consider it in the context of your real overall needs over time, instead of suddenly, at another person’s suggestion or direction, and without real consideration at the register as you are checking out.

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Steve in W MA August 29, 2010 at 1:06 am

I sell people down all the time at my job. I do it both up, and down.
For the customers that I perceive are value conscious or cash strapped, I will suggest a less expensive solution for their problem. I know that they will remember me and my business gratefully in the future and believe that I get repeat custom and gratitude from them as well.

for the customer for whom price is not such a consideration, I will offer or suggest add-on purchases and will not mention lower cost alternatives.

It is all a matter of tuning in to who they are and what is important to them. Someone who is rich and visiting town may be a lot more concerned about having a great experience than in getting the “best deal”.

Someone who is financially stressed usually is in the store because they really need what we sell, but probably would appreciate having to lay down less cash. Making clear to them that we are offering them a more economical solution builds customer goodwill.

To tell you the truth, the blanket upsell or aggressive upsell is something I am not interested in doing as a sales person.

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Kiwikid September 24, 2012 at 2:14 am

And it’s probably smart to get a sale on a smaller dollar purchase than to not get a sale at all.

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Kay January 13, 2011 at 6:49 pm

Steve in W Ma – great that there r still a few like you around.. Good job. A good salesperson. Sure you could sell more by only upselling probly, but there are ethical issues to think of. Appreciate your care for the consumer. God bless U.

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Steve in W MA January 13, 2011 at 7:50 pm

I was just rereading this and realized there is something else I do at the sales desk: When someone is buying a few items and wavering on one because of the total cost, I try to get a sense of which way they are headed in their decision–and I get ahead of it if they are struggling to say no to it by suggesting that I can reshelve it for them if they don’t want it. Hearing me say, “well if you decide you don’t want that now, I ‘d be happy to reshelve it for you” normalizes the experience for them, lets them know that I understand what they are thinking and going through, removing a lot of the stress they are feeling of “not buying it from me,” which I can tell that a lot of people feel. Again, they really don’t want to spend that extra bit of money for the item, so I just reinforce that decision they are making internally/help them out in overcoming the resistance or struggle by offering to reshelve it for them “if you decide not to get it. ” and acting like it’s no problem. I have no studies to back me up, but not only does it feel better to me as a person to do that, I think they are grateful (if only unconsciously) for my making it easier for them to make their decision (the one they WANTED to make in the first place) , and in the future remember the sense of connection and agreement/flow and NO PRESSURE and come back to the store for future purchases when they can again afford it. And we do get a lot of repeat business.

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Kiwikid September 24, 2012 at 1:58 am

Ah, but you should be prepared for this. After all, they always do it. Just respond by saying “did I ask for medium/large?” and when they say No, then you say, “then why did you ask me? I ordered what I wanted.”

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Ed September 23, 2014 at 11:14 am

Good answer, but, be nice! Just say: I appreciate your offer, but I’ll stick with what I ordered.

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Donc February 7, 2011 at 1:22 pm

I don’t blame people for trying to up sell as long as it’s done politely. Generally speaking it’s good for their business and usually the boss is either encouraging or demand that they do it.

The best way I have found to control my impulse to say yes is to have a budget or shopping list in mind before I make the call or walk in the door.

My major weakness: rebates. Sadly I have agreed to add that $50 item that is “free” with the $50 rebate and either not received the rebate or forgotten to mail it in. I’m working on “Just say no to rebates.”

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AJ April 8, 2011 at 11:40 pm

CHEAPSAKE…

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Steve in W MA April 16, 2011 at 9:38 am

With rebates, you need to have a deal with yourself that if you get a rebate item, you have to prepare the rebate mailing once you get home and mail it the next day. No putting it off. Having mailing materials (stamps and envelopes) in the kitchen or readily at hand is vital for getting those rebate coupons sent off.

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Learned the Hard Way April 21, 2011 at 3:49 pm

Buyer Beware: There are other up-sell tactics out there (typically by fast-food chains) that everyone should be aware of also. For example, for many in the fast-food industry today, the “meal” price includes the sandwich/burger, and the SMALL drink and SMALL fries. When viewing the menu board, you get the impression that you’re still getting a decently priced meal. However, upon ordering, the first thing they ask is whether you want the medium or large size combo meal. They don’t mention that either of those choices are both up-sized costs…so you have to think fast to say NO, I want the meal size that you have listed for $XX.

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Tom B. October 8, 2011 at 7:46 pm

My favorite thing to say to anybody that tries to upsell me anything is “it’s free right” and when they say “no”…. I say “oh no thanks, I am trying to cut back”. They always laugh, but as we know I am laughing all the way to the bank!!!!

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Shane July 25, 2012 at 2:34 pm

I know people who work in the industry and they all agree that up-selling increases the check total which in turn increases the total tips. Therefore you are losing out by adding the little extras.

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Kiwikid July 30, 2012 at 4:03 am

In New Zealand we don’t do tips. People here get paid a living wage, unlike vast numbers of employees in the States.

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BrightSky9 September 22, 2012 at 7:29 am

One correction, I think, to the original article. I’ve never had a Starbuck’s employee try to upsell me. Lots of other places do, but I think Starbuck’s doesn’t.

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