Up-selling may offer valuable add-ons, but beware

By Russ Van Arsdale, executive director, Northeast CONTACT
Posted Sept. 22, 2012, at 2:41 p.m.

“Would you like fries with that?”

This catchphrase of our culture is no surprise; it’s as common as, “Have a nice day.” What would be surprising is if the fries question were followed by the statement, “Don’t buy the fries, and you can’t have the burger.”

Asking about adding fries to a food order is what salespeople call up-selling. Once someone has decided to buy something, the technique can add significantly to a company’s profit margin. Up-selling is not just encouraged, it is seen as vital to much of a retail sector still reeling from a sluggish economy.

Here’s how it works when everyone’s playing nice. You buy a pair of shoes and the salesperson asks if you want a can of waterproofing spray. It’s a natural question, since you want to protect those shoes from the sometimes harsh Maine weather.

Thinking bigger, maybe you’ve just decided to buy a car. The salesperson asks if you want to add a couple of dollars to the monthly payment for upholstery protection. You decide that’s a good idea, since your children always seem to have sticky, grimy hands. An inquiry about an add-on cost for undercoating gets another positive response, again in the interest of protecting the original investment.

In fact, sales managers stress to their charges that up-selling is in the customer’s interest. If an extra sale can add some value to the entire package, it’s up to the salespeople to make sure the consumer is aware of the additional available items.

From the seller’s point of view, it’s just plain dumb to leave those add-ons on the table. Let’s take a closer look at the upholstery protection to see why.

Say you have agreed to a 48-month loan on a $25,000 car. Adding $2 a month for upholstery protection is a no-brainer for you; for the salesperson, it’s literally as good as gold. He or she spent no more than 30 seconds asking if you want it and explaining the coverage. Once you’ve agreed, the add-on amounts to a $96 sale over the life of the loan. And the markup for the dealership is likely a higher percentage than on the car itself.

For that reason, some sellers put more value (from their viewpoint) on the “market basket” of add-ons than on the original item being sold. One major chain — which sells computers among other items — got a black eye a few years back for what’s called “walking the customer.” The chain told employees that a $200 “market basket” (total of all add-ons) had to accompany the sale of a laptop computer. Several customers documented that, when they declined any add-ons, the salesperson either checked with a manager or went to the back room. The employee returned to announce that the item, somehow, was suddenly out of stock.

We don’t argue with the technique of up-selling. We do take issue with a bait-and-switch-style tactic that sends a potentially happy customer away empty-handed.

Salespeople will use all kinds of incentives. “Buy the main item, and I can give you 20 percent off add-on X” is one of the most common. However good an extra item or two is made to sound, decide for yourself if you need any or all. We will discuss the extended warranty in a future column.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

http://bangordailynews.com/2012/09/22/business/up-selling-may-offer-valuable-add-ons-but-beware/ printed on October 23, 2014