Upselling or Upsetting? : Studies on the Behavioral Consequences of Upsell Offers in Service Encounters

"Would you like to supersize this room?" In many industries, especially in the service sector, consumers are offered the opportunity to revise their initial reservation decision in return for a superior but more expensive product or service option. For instance, when checking in at an airport or hotel counter, consumers are frequently encouraged to reconsider their initial reservation and book a higher-quality but more costly seat or room. This marketing technique is referred to as upselling. Even though upselling attempts are commercially appealing for companies and beneficial for consumers, there is little research on how consumers respond to upsell offers. However, practice and anecdotal evidence suggest that it is not self-evident that the consumer decides in favor of the upsell. As such, one important question that remains to be addressed is what factors drive a consumer's decision in favor or against an upsell offer. While research on sequential decision making and preference reversals may provide initial insights into consumers' behavioral intentions, it does not explicitly examine when and why consumers decide to accept and pay for an upsell offer.

Hence, the purpose of this dissertation is to develop a conceptual model of the upselling decision process and to empirically clarify when and why consumers may accept such offers. Drawing on findings from the effort-accuracy framework, goal framing and decision justification theory, the present research develops a theoretical model that argues that the upselling process is best conceptualized as a three-step decision process. The model proposes that extensive initial cognitive effort investments induce a lock-in situation that reduces the willingness to choose the upsell and to pay for it and that this effect is moderated by the goal frame of the upsell offer. In total, four experiments confirm the models' propositions and provide substantial evidence for the mediating role of anticipated inaction regret and decision justifiability. Furthermore, it is tested whether decision delegation to a surrogate shopper such as a travel agent alters these relationships and whether need for justification acts as a boundary condition. The model and research results have important implications for the services and sales literature and suggest that antecedent decisions and associated cognitive effort investments exert a strong influence on subsequent decisions regarding acceptance or refusal of the upsell offer. Thereby, this dissertation contributes to research on selling techniques and identifies managerially important levers on how to successfully manage upsell offers in the service encounter.