The Ultimate Upsell Strategy to Maximize Ancillary Revenue

September 20, 2018 Darya Subotka

hotel amenities

Airlines promote seat upgrades to enhance a flight experience, and McDonald’s has been upselling its customers for years simply by asking, “Do you want fries with that?” In hospitality, upsells enhance the guest experience while generating more ancillary revenue for hotels. The best upsell strategies to consider are segmentation, timing, and email design. Keep reading to learn how you can build an upsell strategy that gets results.

 

Segmentation for personalized upsells

The key to maximizing ancillary revenue via amenity upsells and room upgrades is personalization. By tapping into your database and leveraging guest preferences and stay history, you can customize upsell offers that are relevant to individual guests. Below are some effective segments to consider for your upsell strategy.

Reservations with children

It would not make sense for you to receive an upsell email featuring a bottle of champagne, a bouquet of flowers, or a romantic sunset cruise when you’re vacationing with your children. The type of upsells you’re more likely to purchase would be family-oriented, such as kids’ activities or free dessert for children when they dine at your restaurants.

OTA rate bookers

Segment by the channel or market on which your guests have booked. Direct bookers, in contrast to OTA bookers, should be rewarded for booking directly with upsells like free newspapers, discount spa services, dining discounts at your restaurants, etc. This is also an easy way to incentivize guests to keep booking direct.

Loyal guests and VIP

This segment consists of your highest spenders and biggest promoters, so you should definitely personalize upsell offers to this most lucrative group. Offer discounts for services you know these guests have previously enjoyed while on the property.

 

Optimizing send time

When you optimize your send time, especially with upsells, you’re giving yourself the best chance to generate the most revenue. Check out the best send times for some popular segments.

Resorts vs. city hotels

Resorts send their pre-arrival upsell emails earlier - usually a week ahead - as people start getting ready for these types of vacations fairly earlier. On the contrary, hotels based in a city should send their upsell emails just a few days before arrival to stay top-of-mind.

Non-clickers

For recipients who opened your email but didn’t click through, retarget and resend the email as a second attempt to include offers that may resonate with guests better.

Last-minute bookers

It’s common to send a pre-arrival upsell campaign seven days before check-in, but a last-minute booker might book only two days in advance. To ensure you capture all your guests, send one pre-arrival upsell campaign seven days before check-in and another two days before for those who didn’t get the first email or who opened the email but didn’t click through.

“When do I want to see these offers?”

When deciding when to send upsell emails, ask yourself, “When would I want to see these offers?” For example, our Revinate Marketing customer Tomo Kakegawa of Hotel Spero was offering late check-out to his guests, but the campaign wasn’t generating great results. That is until he realized that if he were a guest at a hotel, he wouldn’t think about checking out until the day before he’s supposed to. So, he changed the send date to the day before check-out and noticed a major uptick in requests.

 

Common upsell email mistakes

Be sure to avoid the following common mistakes made by hoteliers:

Including competing links

You don’t want to include call-to-actions (CTA) that counteract each other. Each email campaign should have a specific goal driven by clear and obvious CTAs. For example, do not include both ‘Add your preferences’ and ‘Upgrade your stay’ in an email as having a guest upgrade their stay will generate more revenue than adding preferences, so draw the focus to the latter.

Burying the CTA at the bottom

Your CTA should sit above the fold so recipients can see the main action button without having to scroll. According to a Litmus study of email analytics, recipients only spend 11.1 seconds reading an email. That means you should put all your important, engaging information near the top to capture a reader’s attention and interest them enough to take action.

Including long, technical information

Avoid making your email text-heavy as it will only deter recipients from purchasing your upsells. The purpose of an upsell email is to improve the guest experience, so add attractive photos of your offers. If you must provide transactional details and other pre-arrival information, send it in a separate email. Try sending your upsell email seven days before check-in and waiting until two days before check-in to send your pre-arrival or transactional email.

upsell email design tips infographic

 

Generating ancillary revenue with upsells is one of the most undervalued methods in email marketing platforms like Revenue Marketing. If you’re interested in learning more about how upsells can increase your ROI, reach out to chat with us.

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