The Simple Secrets to Upselling Every Time!

Using decoys and loss aversion to make it easier

Gotta tell you, I’m pumped about our topic today: Upselling.

Why? Getting good at upselling can literally 10x your business. So if you could use some help getting good at this… you’re in the right place.

Ready? Let’s go.

It Begins With The Popcorn Study

Nat Geo conducted a study to learn a bit about upselling along with the decoy effect (hang tight I’m getting to it). Oh, BTW, I have no idea why Nat Geo spent time conducting this study…

In part one of their experiment, customers were offered two sizes of popcorn: a small $3 popcorn. Or a large $7 dollar popcorn.

Take a guess where most landed.

Yep, the $3 popcorn won. Most customers commented the large popcorn seemed “unreasonably high.”

Hmmm. Ok, let’s put a pin in that comment for now.

The results from the first study are typically what happens in these scenarios.

When presented with an A & B option. One low and one high. Similar results occur. The lower-priced item wins.

But what if it wasn’t that simple?

What if a third option was added to the mix? Let’s find out what happens. And I think you’ll agree the results are very interesting.

The Decoy Effect

In part two of the experiment, customers were given three options: Small for $3. Large for $7. And medium for $6.50.

The medium option is the decoy. Its purpose was to impact the customer’s decision process.

Now, instead of a simple choice of high or low… this third option made buyers react differently.

With the decoy choice added to the mix – the $7 bucket of popcorn became the best-selling option.

Hey, I thought it was unreasonably high!?

But in this scenario, things have changed. Some buyers commented: “Spending the extra 50 cents seemed like a rational thing to do.”

Interesting, don’t you think?

How You Can Upsell in Your Business

The popcorn study provides some great insight for advisors.

When given the opportunity to provide trip options, think about adding a third price point to the mix. You may just find that you’re able to increase your sales.

But That’s Not The End Of The Story….

In fact lets switch gears briefly and explore upselling through Loss Aversion. Told in one story I came across and need to share with you.

The story comes from Victor Antonio’s book  Mastering the Upsell.

This is a good one…and it goes like this:

Antonio’s wife had been wanting to redo the backyard for some time. After some discussion on what they could afford, they set a budget of $25,000. His wife then went to work finding a company that could do the work. 

Without too much trouble she found the organization and made an appointment. The salesperson came out and listened to Antonio and his wife discuss their vision for the backyard. 

Throughout his time with them, the salesman asked the right questions and impressed Antonio with his professionalism. 

During a tour of the backyard, the salesman asked even more questions and dropped in things to avoid and things that were good to do. In short, this guy knew his trade. 

When the meeting was over, the salesman sat back down with Antonio and his wife and went through the next steps. 

He said, “I’d love to work with you. We can have our design consultant come out and do a property walkthrough with you. Then do a full-scale colored blueprint of your design based on the information you gave me. The process takes about two weeks to complete. Then I’ll come back, and we can add/subtract/modify as you see fit. The cost for the blueprint will be $2,500. If you decide to use our services, that amount will be subtracted from the final price. Can I go ahead and schedule a walkthrough appointment for next week?”

Both gave a big yes and two weeks later the salesman returned with a large cylinder under his arm. 

Antonio was hoping the drawings would come in on budget. 

The salesman had two options. 

• Option A: $27,000
• Option B: $45,000

Both were good. But Option B clearly had more of what they had hoped for. 

This is where it gets good. 

After a few minutes had gone by the salesman could sense there was some uneasiness towards the options.

He then said, “Look, it’s apparent Option B has more of what you want.” He slides the proposal their way and hands Antonio and his wife a pen. “Why don’t you take out what you don’t want or need from Option B and I’ll recalculate the price.” 

He then added, “I forgot something in my car, I’ll be right back.” 

With the salesman gone, Antonio and his wife could feel the loss aversion set in. They took the option and tried to scratch things off. But it was hard. They wanted it all. 

Eventually, they got the final number to $34,000. Nine thousand over the original price!

But how? How could this happen to Antonio — a man already a master salesman himself? 

Two words: Loss Aversion 

We’ve all been there before. We begin to imagine the new backyard, the new piece of clothing, the new car, or the new whatever. 

Once that happens, we don’t want to let go. In fact, we can’t let go because in our mind the item belongs to us. 

And once we cross that bridge, we will go to great lengths to make the purchase. Sometimes that involves going $9,000 over the original budget. 

How Can You Use This in Travel?

As Antonio says, “When you’re submitting a proposal, never start with the basic (low price) option. Go with the fully loaded option.”

If the client says, “That’s more than I wanted to spend. Or I don’t have that in my budget.” Simply slide a pen their way and ask them to take out the experiences they don’t want or need and you can recalculate the price.

For TWO option sales… Upsell through loss aversion. 

More great stuff for you to think about. 

Thanks, and if you’re a fan share with someone in your circle 😉