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?