Workshop
The idea is, the more you offer in the bundle, the higher value a customer gives to it and the more likely they are to make a purchase. It’s a marketing strategy that's useful across tons of areas, but is seen most often in tech, software, consumer goods, media, insurance and electronics.
Here’s why it’s useful. It can...
• Increase demand – and therefore revenue.
• Help shift certain items that aren’t selling so well.
• Reduce your marketing and distribution costs.
• Allow customers to meet several needs with one purchase, meaning they’re less likely to feel guilt from buying too many things.
• Attract a new kind of customer: those looking for a good deal.
• Give customers exposure to products that might not have been on their radar – and that they might love.
What you need to know about product bundling
Make some financial projections. Bundling generally increases your revenue but naturally negatively affects your profit margins on each product (compared to selling them individually). That means you have to get clear on your revenue and profit projections – for both unbundled and bundled items – to make sure it makes sense.
There’s more than one type. Mixed bundling gives customers the choice between buying the entire pack of products, or buying individual items from the pack. Pure bundling, meanwhile, doesn’t give customers the option of buying things separately – it’s all or nothing. Leader bundling lets customers get a discount on one ‘leading’ product – but only if it’s bought with something else.
Transparency is key. For customers to not feel like they’re getting ripped off, it’s useful to be transparent about how much the individual items cost on their own.
The products don’t need to be directly related. They might just be a group of products you think would appeal to a certain kind of customer.
It’s about experimentation and proper analysis. If you opt for bundling, you’ll need to analyse what’s working and be open to experimenting with what you’re offering. It’s not a static strategy.
A version of this article was published in the Courier Weekly newsletter. For more insights, analysis and inspiration, sign up here.
