Bundling is not some new dance move nor is it a new diet trend where you put salmon on your cereal in the morning to lose weight. Bundling can be defined as the sale of two or more products at a single price. These products are typically sold separately as well and the bundled offer is usually priced at a discount to the summative price of the individual components. There are several advantages of bundling and many online stores have successfully used bundling as a marketing strategy. In this post I’ll look at some of the advantages of bundling and how it can benefit your online store.
1# To Inspire Product Trials
If you are offering a new product in your store, bundling it with an existing fast moving item, is a great way to inspire product trials by customers. It makes it easier for customers to make the decision to purchase the bundled product as his perceived risk is lowered by the presence of the tried and tested item in the bundle. Ideally, the new product should be bundled with a complimentary product that the target customer base uses. Let’s say you have an online store that sells perfume and one of your vendors gave you samples of a new anti-acne cream. An appropriate bundle would be introducing the new cream with a perfume that’s preferred by teenagers, like the new Justin Bieber fragrance.
2# Increase Revenue Per Sale
Bundling can help you to increase the revenue per sale in your store, as customers who otherwise would have purchased an individual item, are now stimulated to purchase the bundled offering, thus leading to a higher sales volume and resultant increase in profits. Again, for this to really work, you need to bundle items that “make sense” and have the price be lower than the individual purchases or you will actually have a harder time moving product. Outside of your gut feelings on what makes a good pair, check out the customer flow in your Google Analytics dashboard and see where your users are going. If you have an e-commerce shopping software that can tell you that too, even better!
3# Increase Product Sales
Bundling can help to increase sales, as customers often perceive the lower price of the bundled product as a better offer than having to pay individually for each of the components. You can offer the bundled product at a lower rate as you save on order processing, packaging and shipping costs. Thus, bundling can be a win-win situation for both the customers and the merchants. Definitely do your research here but with the money saved on your pretty new bundled package, you may be able to waive shipping – a factor that converts website visitors into sales 9 times out of 10. I don’t know about you but there is nothing turns me off to an online purchase more than when the shipping is more than the actual product. That’s why Amazon and Zappos are so popular! Interestingly enough, increasing sales through ‘deal’ marketing has been speculated to decrease the need for aggressive 24/7 live contact center powered customer service. If people feel like they are getting a great deal, they are less likely to phone your call center with billing issues, product complaints, or general disgust of a product with a push for a refund or RMA.
4# Offload Slow Moving Inventory
Bundling of products can also help in offloading slow moving inventory in your store. Customers who would otherwise not have purchased a product independently, would happily purchase it when clubbed with another interesting product. This is because the perceived demerits of one component in the bundle gets netted off against the benefits of the other components in the bundle, especially when the price is right. In my experience, this usually helps move higher priced items – items that are great but they may be seen as expensive. Think about it this way, would you be more likely to buy a new LED television by itself or if that television came with a few BLU-Ray player? I’m not suggesting you need to bundle your slow moving expensive items with free products, but if the profit on a larger item outweighs the smaller item, it makes financial sense to give something away to help the profitable item fly off your virtual shelf.
5# Command a Premium
Although typically, a bundled offer is less costly than buying the items individually, you can often command a premium for a bundled offer. This idea is created in an innovative manner such that the customer is convinced that the value of the bundled offer is greater than the sum of its parts. For example, if you have an online baby store, you can create gift hampers for babies which can be attractively packaged and can be priced higher than the summative price. Something like a hamper with a baby monitor, clothes, shampoo, etc. The customer will be willing to pay a premium for the bundled offer as you are now offering the convenience of a ready-made gift thus helping him to save the time and energy that would have to be otherwise spend on scouting for the individual items, buying the packing material and then creating an attractive hamper. One thing to keep in mind while bundling products in this manner is to ensure that you have bundled offerings at various price points so that you have something for customers with different gift budgets. This is a great way to boost your sales especially during the festive season and on occasions such as Mother’s Day or Valentine’s Day.
Have you successfully used bundling as a strategy in your store? What insights have you gained? We look forward to hearing about your experience below!
Author Bio:- This guest post has been provided by Nicolas Dalleva. Mr. D’Alleva is the a technology and marketing consultant for Specialty Answering Service, a us outsourcing company for businesses looking for dedicated call center agents. For more information about SAS, please visit http://www.specialtyansweringservice.net.