Upselling through upgrading: The role of employee engagement

Abstract

Although the literature on upselling has investigated different aspects of inducing upselling, there are limited discussions of the effect of past transactions on customers’ acceptance of upsells. Building on the expectation-confirmation and reference dependence theories, this study utilized mixed-effect regression analysis to explore the extent to which customers’ acceptance of upsells changes in response to their prior experience of unexpected gains via free upgrades. The results show that customers accept and spend more on upselling offers when they have experienced a free upgrade in a past transaction and that the effect of the free upgrade on upselling is positively moderated by the level of employee engagement.