How to Bundle Products to Achieve Higher Order Values
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A fantastic way to increase your order values, sometimes at very high margins, is to introduce bundles to your product range.
Media subscriptions in particular have done this very well, combining their print and digital offerings.
The Economist do this particularly well, offering their digital subscription at £55 per quarter, or their print & digital for just £65. Just £10 more to receive their print magazine seems like an amazing deal.
Another way of looking at it is, the bundle is £65, but do I really need the print version? I’ll just pay the £55 for digital, which has a far better margin for The Economist.
What complementary products do you sell that could be bundled together?
The key is to add a high margin product that people may not normally choose to buy, but when positioned properly, adds value to their order. This last bit is crucial, you can’t just add anything to the bundle and expect it to work as a value add.
So how else can it work outside of subscriptions?
Pricing Opacity - If a minor has a price point which causes friction, think of the food or drink you have to buy at a conference, gig or sports event, if it can be bundled in to the price of the ticket, it’ll seem much more acceptable to the consumer.
Clearing Inventory - Got a load of product that isn’t selling? See how it can be bundled in with other similar products. Just be wary of value, if the product doesn’t complement the others, or is a very different price point it can have a negative impact.
Marketing Simplicity - If you’ve got loads of products, or variants of a product, can you just bundle them together and offer a slight discount on the per-unit price? This is quite popular with smaller versions of products such as candles, where you buy a bundle with 20 candles and can try them all.
Cognitive Overload - With products that have the potential to be highly customised, let’s say Netflix, or buying a car, it can make sense to bundle everything together and only offer limited customization to reduce cognitive overload. For every decision the customer has to make, the next decision becomes harder, and that final decision will be whether to hit that final Buy Now button.
Have a think about how bundling can benefit your business, but don’t rush into it.
Plan it through, run some tests to your database to see how customers react to it, and only then commit to it.