Many eCommerce sites especially offer product bundles to sell more of that product and hopefully, boost revenue. But why does product bundling work? Is it something that consumers just can't resist? And consequently, should you try it?
This article will go over which product bundling strategies have historically proven most effective. And also, we will review mistakes that you should avoid when bundling your products. When done right, it could help increase your profit margin.
Why Bundling is Effective (Sometimes/)
So essentially, mixed product bundling is when a brand offers several different items that they sell bundled together and usually with a discounted price. So if a buyer for example is torn between two items, or needs both, they can opt for a bundled package that contains multiple offerings from that company. Why does this tend to work so well…Let's explore a bit?
There was a study done that focused on Nintendo and their efforts at bundling when it came to video games. Once they did start to utilize the bundling strategy, their sales of video game units increased by over 100k. Nintendo by the same token, also tried pure bundling—when they forced consumers to buy only bundled packages. In this case, the sales decreased by almost twenty percent. Therefore what exactly does this suggest…It is about balance and it is also about finding the ideal mix when it comes to bundling. Additionally, you have to have a firm handle on what customers value. In other words, what do they value enough to want to spend money on? Nine times out of ten, customers will indeed go for those products that they place a high value on.
Keeping this in mind, it is important to bundle those products that are all of significance to the customer. And again, the fact that they come with a less expensive price tag than if purchased individually is a draw for the consumer. So what kinds of products should you consequently bundle together? You want them to complement one another—as in the video game scenario. But it doesn't necessarily have to be quite that closely aligned. They can relate to each other a bit more distantly.
Considering Which Products to Bundle
Complementary products as mentioned always make for a great bundle. In the end, the grouping needs to make sense. If you are a tech company and are selling a laptop, why not bundle it with a free USB or some other accessories that the customer may inevitably need. You might even poll your customers. Feedback never hurts and could give you some incredibly useful information as far as what customers want to see in a preferred bundle.
You could also utilize data analytics to more effectively gauge what could work well together in a prospective bundle. You can track consumer buying patterns, interests, behavior. In this way, you start to paint a picture of what people are opting for in this current climate and therefore how you might create the ultimate bundle.
Look at the data in your shop—be it online or brick and mortar. If customer A is buying a certain skin care product and then that same customer also purchases a complementing cosmetic—this may be the start of a truly inspired bundle.
5 Tips for Better Bundling
Tip 1: Offer a Few Different Bundling Options
Just one specific bundle gets boring after a while. Offer a diverse array of groupings. In this way too, customers will want to explore more of your product line and thus be encouraged to buy things they may not have thought of trying before.
Tip 2: Hype Up the Savings
One of the absolute best things about buying things bundled is that they will save versus buying the individual units. Especially now, when the economy is precarious—saving money is something pretty much everyone is looking to do. Emphasize this. Show them exactly how much they are saving percentage-wise when they purchase a bundle.
Tip 3: Have Promos of this Nature at the Checkout Counter
The cashiers should be trained to up-sell by way of a bundle. That is to say, when people are checking out, the cashier could mention that if they opted to buy one or two more products in line with what they already have, they could get fifty percent off on each subsequent product for example. This works well for eCommerce too. On the check out page, you could highlight savings when purchasing one or more related items in tandem with the original item.
Tip 4: Showcase Those Bundle Sets
Put the bundled packages right where customers can seem them—whether you're a storefront or an eCommerce shop. It is about gaining exposure and getting the consumer thinking about the products they could potentially have for the savings they could potentially enjoy. The more you promote this package, the more likely the consumer will be to explore it further, and hopefully, they will then purchase.
Tip 5: Have a Separate Bundled Packages Section
Again, whether it's a web page or a storefront, have a section devoted to these bundled offerings. Many shoppers will go right to these dedicated sections because they do promise a deal. You could also for example highlight a bundle of the week.
First Union Lending is here to help you grow your business. Whether you have an eCommerce shop or a brick and mortar company, we have the financial resources to allow you to move forward and thrive. With short term loans, lines of credit, and merchant cash advances, we have a funding solution for just about any small business owner. And there is no off the shelf approach with us. Everything is custom-tailored to suit your needs. Not to mention, some clients see the money in their accounts within two business days—yes, we do work that fast. Call today and let's get started!