Bundling is the practice of including two or more products with your main product that you are selling. This also includes discounts, kits, and sets. It often improves the perceived value of your product.
Advantages of bundling
Bundling is a competitive tactic. It gives you the opportunity to set your items at a higher price point and increase your profit. It is also cost effective since it will take less time to pick and pack a bundle, and you won’t have to send the items out separately, which lowers shipping fees.
Bundling also increases the number of customers you reach. They might be searching for an anti-wrinkle cream and find that you are bundling one with an eye cream they haven’t tried. It therefore grows your target market. Competitors will also find it harder to analyze your sales data and find pricing intelligence on your products since the individual product prices might not be available.
Bundling your products at a lower price point can serve as advertising for your overall brand and products. In this outreach, you might find customers who are solely focused on price, and don’t so much care for brand loyalty.
Sometimes you have some items that are not moving and taking up warehouse space which results in additional storage fees. Bundling these items that are not selling will have you save on storage space, add value to the main product and still get some revenue from products you have basically written off.
Ways of bundling
There are several types of bundling methods, and each has a different impact on your sales and revenue. Make sure to crunch the numbers before bundling to ensure the same or a higher profit margin. Let’s explore different bundling techniques to identify what will be the best for your product. This will explain the importance of building a customer experience that is well-designed and flawlessly executed.
Bundling is an excellent way to upsell your other products in your product line. By bundling some complementary products that are often bought to together, you can offer a better deal to your customer, and increase your revenue. You’ll also be able to nab those customers who were unsure about purchasing another item. This gives them the option to sample your other products and become recurring customers.
Don’t underestimate the convenience of a bundled set of items. Your customer won’t need to research your whole inventory of products to find what they want. A complete bundle will give them a better deal and might even include a new product that they wouldn’t have selected to buy.
Another way to bundle is by suggesting related items on the page while they are looking at the lead product they are searching for. This way they can still get a great deal while curating their own bundle. Make life easier for your customers by suggesting related items they might need. If your customer is looking for a face wash, there is a strong likelihood that they will also need a moisturizer. You can give shoppers some of their time back by making it easier for them to find related products. This all adds to the customer experience and the ease of shopping on your site. This type of bundling is known as “mixed bundling”.
However, according to an assistant professor in the marketing unit of Harvard university, customers don’t like having only one option. Therefore, you should still make your products available individually. In this case, a way to incentivize your customer to look at other products is by providing discounts and coupons.
How to identify product bundling opportunities
You’ve decided that you want to give your customer the best experience by guiding them in their purchase. Now you just need to know what to bundle with your product. Make sure that it is relevant to the main product, or relevant to your customer. The way to do this is to track customer behavior on your site. What kinds of products do your customers usually buy together or search for? This valuable data will give you a very good indication of what interests your customers have, and which products complement each other the most.
With skin care brands, for example, customers often choose to use the same brand for all their skin care product needs, since there is great customer loyalty for these kinds of products. Apply your expertise in the field to see which products will complement each other.
Do it right
Bundling might fail with the wrong additional items and make you lose customers to a competitor with more relevant bundling options, or even a competitor that does not sell bundles. With the right product, bundling is an easy way of offering new products that complement the line that you are focusing on. It is cost effective and grows your target market. With this strong competitive tactic, you can easily outsell your competitors if it is done right.