Start low and upsell later

Upselling from a simple base offer got me thinking when I booked a hotel in New York in 2011. I started with a particular budget and ended up choosing more because the extras made sense to me.

Upselling from a simple base offer when booking a hotel

I found an offer at the Ritz-Carlton within the price I’d set myself. The basic offer was genuine, and I could choose it as it stood.

During booking, I saw the club level option. Among other things, it included access to breakfast and other things that could be relevant for our family of four.

I decided to pay extra for it. But then I discovered I also needed to choose another upgrade if I wanted to keep the Statue of Liberty view I’d talked about with my daughter.

I’d already started wanting the extras

I ended up spending more than planned. If the full price had been my first encounter with the offer, I might never have looked at it.

But once I’d seen the basic offer and imagined the family there, I began weighing up the extras differently. Breakfast, the view and the extra experience gained clear value for me.

A starting price needs to stand on its own

I stress in the video that this isn’t about hiding fees. There needs to be a proper product at the price you show.

Perhaps you can offer a simpler service and let customers choose more features or support later. The extras need to be something customers can actually see value in.

The story is from June 2011. Prices and hotel terms describe my purchase back then. My point was to think about how a genuine basic offer and clear optional extras could help customers choose.

Also read about upselling extra features.

Upselling from a simple base offer: How I came to want more

I still have a bit of a fever when I record the video in June 2011. I’m going to New York the next day, and the night before I’ve booked a hotel. Along the way, I discover how I can end up buying more than I’d actually planned.

I start by deciding the most I want to pay for the room. Then I use a search service. I mention both Hotels.com and Expedia, but during the story I remember that it was TripAdvisor I’d used. I think it’s a fantastic place to find hotels and restaurants when you’re going on holiday.

We don’t only think that way when travelling. If you’re buying a television or spending an amount that matters to your finances, you often start with a budget. Then you use a price comparison search engine or look for something within the limit you’ve set.

A five-star hotel within my price limit

I find some decent hotels. Then a five-star hotel appears that I hadn’t really expected to choose. Not necessarily because I can’t afford it, but perhaps because I’m too stingy. Let’s put it that way.

It’s the Ritz-Carlton, and it’s at the top end of what I intend to spend. I want to take a quick look. When I get to the hotel’s own website, there’s an offer cheaper than the price I initially saw in the search.

Then I think: What the fuck, man. The Ritz-Carlton for roughly the same price as a three-and-a-half-star hotel in New York? I’d bloody well rather have that.

The hotel isn’t by Times Square. On the other hand, it has a view of the Statue of Liberty. That sounds interesting, so I continue booking. Then the thing that gets me thinking about upselling begins.

Two thousand kroner more for club level

There are four of us going for seven days. During booking, I see that for around DKK 2,000 extra for the whole week, I can choose what’s called club level.

On TripAdvisor, I’ve read that people think it’s really great. You get access to the area on the 13th floor, where the view is better. Breakfast is included, and breakfast can be expensive in New York. There’s also lunch if you’re at the hotel, snacks, drinks and other things. People write that you shouldn’t miss it.

I start doing the sums. Two thousand kroner more for a week for four people, with breakfast included. By my calculation, breakfast alone could cover the amount. So I say yes to the upgrade.

But afterwards I think: Shit, did I still get the room with the Statue of Liberty view? No, I didn’t.

Now I’d already promised my daughter the view

I’ve already talked to my daughter about the Statue of Liberty. She’s learned about it at school and is incredibly excited. She actually had tears in her eyes when she heard we’d have a room with that view.

So now Dad is under fucking pressure. I have to go back and look again. If I want both club level and a Statue of Liberty view, I have to pay another roughly DKK 2,000 for the week.

Now I’ve already sold myself on club level. I’ve imagined how great it’ll be. At the same time, I’ve emotionally committed to the view and my daughter’s expectations. So I can’t really say no.

I end up spending DKK 4,000 more on the hotel than I’d originally planned. That’s my purchase and the prices I encounter in 2011.

I’d never have seen the offer at the full price

If the hotel had appeared in my search at the final price from the start, I’d never have seen the offer. The price would have been above my limit. Both the mental limit in my head and the one I’d set in the search service.

But I was shown a lower price that was genuine. There was no bullshit in the basic offer. I could actually choose a five-star hotel at a price close to the three-and-a-half-star hotels I’d been looking at. And I could get a Statue of Liberty view if I chose the original offer.

Only once I got in did I discover the other options. And then they had a value to me that I hadn’t budgeted for. I hadn’t been cheated, but in a way I’d tricked myself into buying something more expensive.

A good basic service can open the door

Think about that when you present your own prices. It’s not about hiding fees or anything like that. The price shown must cover a proper product the customer can actually choose. Also read E-pusher about my experiences of selling online.

If you have a service, perhaps you can create a good, solid base version with some extra features removed. Perhaps those very features are also some of the things that cost you money to deliver.

You could call it your Ryanair model. It’s simple. The customer doesn’t have access to telephone support or certain features, but gets a solid, no-frills product at a lower price in return.

Then perhaps some customers who otherwise thought your fancy service was too expensive discover they can actually afford it. They come in and see what you can offer.

You can then try to sell more during the purchase itself. Or you can start with the base version and offer an upgrade later. For example, the customer could get telephone support for DKK 50 more a week or month, or an extra module for DKK 49 more a month. Those are my examples of how optional extras can be structured.

It’s not some bloody brilliant invention I’m presenting. I simply noticed it because I experienced it myself while booking. I started with one price and then wanted to pay for more.

I end the video by wishing you a good weekend and a happy Whitsun. I’ll be in New York all next week. Perhaps I’ll be wildly productive, but usually bugger all happens with my videos when I’m on holiday. So perhaps we won’t see each other for another week or ten days.

Have a great weekend and Whitsun; you deserve both 🙂 Best wishes, Martin