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Seven lessons in upselling, learned from a trip to the mechanic

Customers typically don't question your motivations when you bundle offerings. They do when you try to upsell.

July 29, 2014 by Dale Furtwengler — President, Furtwengler & Associates, P.C.

We’re required to have safety inspections in order to renew vehicle licenses. My wife’s vehicle passed inspection, but the battery test indicated that the battery needed to be replaced. Since the battery was under warranty, the price of the replacement was only going to be $46. Then the service rep said “Cleaning the terminals will be $20, the total will be $66 plus tax.”

How would you have reacted to this offer? Would you have paid for cleaning the terminals? If so why? If not, why not? What could this company have done to increase the likelihood of the upsell?

Generally the answer to the question ‘Would you pay for the terminal cleaning?’ depends upon three things:

• Your experience in cleaning the terminals
• The value you place on your time
• Relative cost

Experience

The reality is that it takes less than 5 minutes to clean battery terminals. But the more important question in my mind was, why would anyone install a new battery and not clean the terminals?

To me the mere fact that the auto shop would consider doing such a thing raised concerns about their motivation. It seemed to me that they were more interested in generating revenues than serving me well. This belief was later confirmed when I objected to the price and the rep offered to lower it to $15.

Valuing time

If you can make $20 in 5 minutes ($240/hour), you’re likely to purchase the cleaning, assuming you don’t believe it should be included as part of the service. If you earn less than $240/hr, you’ll opt to do the cleaning yourself.

Relative cost

Another bit of math we do involves comparing the cleaning fee to the cost of the battery. In this case the $20 cleaning cost represents 43 percent of the cost of the replacement battery making it seem out of proportion with the item being purchased.

Selling up

What could these folks have done to increase the likelihood of the upsell? Very simply they could have told me that the replacement cost was $66 including cleaning the terminals.

Given that the vehicle was already there, they had the battery in stock, they’d acknowledged a warranty responsibility and that, if I found a cheaper prices, I would have to drive to the other auto store and go through the process again, I would not have questioned the replacement cost.

Takeaways

What lessons can we learn from this experience?

1. Don’t try to sell something as an extra when common sense tells us its the right thing to do.
2. A la carte selling forces customers to make more decisions which they resent.
3. A la carte selling gives customers more opportunities to say "No."
4. Bundling limits the number of decisions customers have to make and the number of opportunities for them to say "No."
5. Customers typically don’t question your motivations when you bundle offerings. They do when you try to upsell.
6. Customers are more likely to return when they get the sense that your bundled offerings address all the concerns they have or should have had if they’d been more knowledgeable.
7. Customers are less likely to return when they feel that you’re trying to sell them things they don’t need or should have been included in the price.

(Photo by Jenn Durfey.)

About Dale Furtwengler

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