Bundling is a game changer ...... #78
- Adrian Dionisio - business737 owner
- Sep 9, 2022
- 3 min read
Updated: Jan 12
So many business owners are focused on competing on price. Don't be one of them. Offer more value to your customer. When you do so you can also increase price. You can do all of this with one simple technique. Bundling.
This article will cover the following;
What is bundling
Why should you use bundling
Bundling strategies
Bundling examples
1. What is bundling
Customers today shop value not price. Often small business owners find it difficult to communicate value so price becomes the only value proposition left to customers.
The key is to offer more value than your competition. Prospects will pay more than twice the price if they believe they are receiving 4 times the value. This is why bundling is so powerful.
Bundling is the process of grouping together certain products to create packages. Any business can package several of their products or services together as a single combined unit, often for a lower price than they would charge customers to buy each item separately.
When you do this you eliminate the biggest complaint small business owners have these days - competing on price.
2. Why should you use bundling?
Bundled products offer more value to your customer. Typically they are offered at a bundle discounts. There are many reasons why you should use bundling;
Stimulate demand
Increase sales & revenues
Boost profits
Increase average order value
So customers buy more during a purchase
Decreases distribution costs
Decrease marketing costs
Reduces inventory waste
3. Bundling Strategies
There are many different bundling strategies
Pure bundles
New product bundles
Mix-and-match bundles
Cross-sell bundles
Gifting bundles
Inventory clearance bundles
Buy-one-get-one bundles
Pure bundles
Several products or services are included in the bundle and can only be purchased in the bundle, not as standalone products.
New product bundling
New and also existing or popular product / service are bundled together. This can help customers discover your latest product and increase exposure.
Mix-and-match bundles
The mix-and-match bundling technique allows the customer to choose among multiple similar products. They can create their own custom bundle from the options available. The customer feel that they’re in direct control of what they want to buy, thereby increasing the perceived value of the item.
This method encourages customers to buy products in bulk without forcing them to buy items which don’t interest them.
Cross-sell bundles
A business can sell a complementary product as an add-on to a main product. This type of bundling works well with lower-priced items, or accessories or parts that go with a more expensive item.
Gifting bundles
Gift bundles are aimed at shoppers who want to give a bundle of complementary products together as a gift.
Inventory clearance bundling
In this bundling technique, you pair a faster-moving item in the inventory with a stagnant or slower-moving item to clear inventory space and decrease your inventory holding costs. This method includes discounts on your bundles so that shoppers who are interested in a top-selling item will see the whole bundle as a bargain and will be more inclined to buy it.
Buy-one-get-one bundles
This bundling is used when you buy one main item, you can avail a discount for another complimentary product or get another product free. This is a best used technique for one time purchase products
Bundling Examples
A Contractor doing house refurbishment.
Normal fee is $100, 000
They have connection with supplier that can get
£50 000 Home security, home cinema, audio visual, underfloor heating , skylight windows set up for £5000 when normal price is £20000
They offer bundle package fo4 £110,000
They will more than likely see their business double.
You will incur expenses for the products or service that you choose to bundle but these can be added on at cost price – or you can take on the cost which will still be cheaper than discounting your offer
KEY TAKEAWAYS
Bundling is a strategy where companies sell several products or services together as a single combined unit.
Bundling allows you to increase price because you are offering more value to the customer
The bundled products and services are usually related, but they can also consist of dissimilar items which appeal to one group of customers.
Bundled products are typically offered at discounts to stimulate demand, lifting revenues often at the expense of profit margins.
Businesses occasionally use pure bundling strategies, rolling several products or services into one item that can only be purchased as a complete package.
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