© Corbis

The Basics

Just say no to the 'upsell'

Why do companies keep trying to sell you extra stuff? Because it's easier to make additional money off existing customers than to find new ones. But you don't have to listen patiently.

By SmartMoney

Maybe it's part of the deal we got when we left the Garden of Eden, or maybe the phenomenon developed during the Middle Ages along with the bubonic plague.

Somewhere along the way, we came to accept the "upsell" as a fact of daily life. There's no such thing as a simple transaction these days -- everything's an opportunity for a business to sell us something more. It's gotten to the point where if the bank's representative fixes our account problem, we'll patiently endure the home-loan pitch that follows, the same way we'll listen to an endless story from the boring neighbor who lends us his power drill.

Until it goes overboard. When I called Citibank recently to report a stolen credit card, I got an upsell, which the hapless rep obviously read from a script: "You may be concerned about identity theft. Would you be interested in our credit-monitoring service? For just $12.95 a month . . ."

Please! I asked for her manager, who to my surprise not only apologized but started commiserating: "I hate it, too. You can't get away from it!"

Companies are upselling more and more, and for good reason. Not only does it increase sales, but the profits on those sales are terrific: Compared with the cost of attracting new customers, it costs very little to sell more to existing customers, says Arun Shastri of sales-consulting firm ZS Associates. Plus, a relevant upsell makes everybody happy.

Netflix is offering a million bucks to anyone who can improve the accuracy of its movie-recommendation system, and that's a smart move -- it would rent more movies to customers who need help navigating its library of 75,000 titles.

Some companies won't give up

But too often, the upsell seems random and contrived, like when Best Buy employees push Entertainment Weekly subscriptions when you're trying to buy a hard drive.

Just as annoying are companies that don't know when to quit. A personal favorite is GoDaddy.com, which sells Web-site domain names for $8.95 -- sort of. Before you can check out, you have to dodge two pages of upgrade offers.

Then there's the over-scripted store clerk who hates the upsell charade as much as you do and offers "10%offyourpurchasetoday" with all the enthusiasm of a baked potato. You almost want to hug her and tell her you understand she's just following orders. Tom Vander Well of call-center-monitoring firm C Wenger Group says he's even heard recordings of call-center reps making the upsell after the customer has hung up. "They're under a lot of pressure," he says.

Video on MSN Money

Beach © Photodisc Blue / Getty Images
Budget your way to smarter spending
The "B" word isn't a straitjacket on fun. Here's how to start your budget and how to find the leaks in your wallet.

But upsell tactics work. Strange as it sounds, surveys indicate that 15% of customers actually want to hear additional offers. Unfortunately, the only way to reach those folks is to upsell everyone. Barb Rechterman, a GoDaddy.com vice president, took me through the site and explained how each upsell offer might help someone. It all made perfect sense -- except for the fact that when you put it all together, navigating GoDaddy.com is like running a gantlet of carnival barkers.

Some companies tailor their approach. Banks, for instance, spend big money on systems that suggest which products to push on which customers. The problem is that software can't replace human judgment. Sure, it makes sense to sell credit monitoring to someone who just had her wallet stolen, and Citibank says some customers in similar circumstances appreciate the offer. To folks like me, though, it just feels horribly opportunistic.

But you can sidestep the upsell. Citibank says customers can opt out of hearing product offers, and even GoDaddy.com has a "quick checkout" option.

For more advice, I consulted etiquette expert Judith Martin, also known as Miss Manners. She advises saying: "Thank you, but I'm not interested. Can we please just get on with our business?" Ouch! But she's right. You don't owe the company your undying attention. That's what you owe your neighbor -- at least until you return his power drill.

This article was reported and written by Anne Kadet for SmartMoney.

Published May 7, 2007

Rate this Article

Click on one of the stars below to rate this article from 1 (lowest) to 5 (highest). LowHigh
SmartMoney.com