The power of bundling
Product bundling is a common method for eCommerce businesses to sell more of their items and boost their revenues over time. This essay delves into the psychology of bundling, offers a few pointers based on industry experience, and provides examples of successful companies.
Read on to discover more about the best product bundling tactics, how to avoid common mistakes, and which online retailers and direct-to-consumer eCommerce businesses are successfully implementing such selling techniques.
But first, let's get a definition out of the way.
Product Bundling
Product bundling refers to the sale of multiple individual items or services as a single package at a cheaper price than if they were offered separately. Value dinners at restaurants, beach packages, and shampoo and conditioner sets are all examples of product bundles. To encourage consumers to explore complementary goods alongside their best-sellers, some businesses only offer specific best-seller inventory as part of a bundle rather than separately.
Psychology of Product Bundling
Product bundling refers to the sale of multiple individual items or services as a single package at a cheaper price than if they were offered separately. Value dinners at restaurants, beach packages, and shampoo and conditioner sets are all examples of product bundles. To encourage consumers to explore complementary goods alongside their best-sellers, some businesses only offer specific best-seller inventory as part of a bundle rather than separately.
According to research conducted by Harvard Business School's Vineet Kumar, when Nintendo utilized mixed bundling to advertise video game units, sales rose by 100,000 units (and video game sales increased by more than a million, as well). Nintendo, on the other hand, witnessed a 20% drop in sales when they tried pure bundling, in which buyers were compelled to buy only the bundled product, as well as lower sales of both video game systems and games.
With these figures in mind, it's apparent that selecting the correct balance for your combined package, or using mixed bundling, is the key to product bundling success. However, in order to discover the correct combination, you must first understand how customers perceive value. Customers choose items that they value, and they regularly choose products that appear to be "worth it." Because of this perceived worth, the items in your bundle offer should all be valuable to the consumer and be available at a lower price when purchased together rather than separately.
Take, for example, Netflix and NatureBox. Despite the fact that their products are significantly different (streaming video and nutritious snacks), both companies have done an excellent job of embracing this "bundled" business model. Their subscription services whittle down massive stockpiles into individualized selections for each user based on customer preferences and feedback.
Bundling simplifies but amplifies the buying experience, and the benefits don't end there.
Bundling benefits
The following are some of the most significant advantages of bundling, all of which can assist your company and its bottom line.
Improving the consumer experience is a must. Customers would be a lot pleased if they can select specific items and services that are catered to their personal wants and needs. Allow customers to add, remove, or alter products from your base bundles to make the purchasing process easier and more enjoyable.
Recognize the things you've purchased. Consumers who tailor a service or product to their own requirements will have a better knowledge of what they're paying for and will be able to obtain greater value from it.
Increase customer trust. When a consumer has invested in his purchase, he is more likely to value the goods and the firm with whom he worked. So the next time he wants advice, he'll think of your company.
Customer feedback should be supplemented. You'll obtain useful insights on which of your products or services work and which don't if you let customers drive their own experience, which will help you enhance your offerings. In the long run, this continual feedback loop will help you to fine-tune the shopping experience and build superior items.
Reduce the amount of time it takes you to make a decision. Consumers enjoy having options, but not an excessive quantity of options. This is why Netflix makes personalized suggestions depending on the tastes of its users. You can avoid the mental strain produced by being forced to choose from too many possibilities by steering customers toward options that are tailored to their specific needs.
Let's look at a few specific ideas to assist you to implement this plan and do it right the first time now that you know how to bundle.
1. Show savings
One of the most appealing aspects of bundle sets is that the products are less expensive when purchased together than when purchased separately. This is beneficial to consumers who are always looking for a good deal. So, while you're selling, utilize numbers or percentages to underline how much money they'll save if they buy the bundle.
2. Display bundle sets
Make sure your bundle sets are displayed where your target clients can see them. It's critical to highlight your packages the instant your target visitor appears on your page, whether you're selling through an online marketplace or an independent site. Your bundles will be exposed to more potential clients the more you market them. This allows them to decide whether or not they wish to take advantage of them.
3. Different bundles for products
Customers will gather ideas for how to use the products, which things to pair with their purchases, and how to resale these items if they choose to do so if you offer a varied range of bundles for them to choose from.
4. Offer bundle promotions at the cart
Have you ever been approached by a cashier at a store and offered a deal? "If you buy a second item, you receive a third one free," it might say. These offers are designed to pique your interest and encourage you to make a quick choice about whether you want something that will make your purchase more valuable.
Product bundling is already paying off for the top online retailers. Here's how Amazon bundles its products:
Amazon continues to improve its online sales algorithms. They've mastered the art of bundling and created a technique for their website to suggest bundled products (called Virtual Product Bundles). They're able to do so since Amazon's profits are derived from the revenue of their vendors.
Upsell & cross-sell your customers by offering extra products, related products, and automatic free gifts through a one-click, tactful upsell popup.