4 EXAMPLES OF COMPANIES THAT BUNDLE PRODUCTS AND SERVICES PROPERLY
Product bundling is a common marketing tactic seen today. To summarize, bundling is the practice of combining individual goods or services and selling them together as package at a lower price than if you were to sell them individually.
Why would I want to sell any of my products at a lower price? The main purpose of bundling is to increase average order value, an important metric to predict the success and growth of your company. According to Vineet Kumar of Harvard Business School, customers are more likely to spend a lump sum of money upfront, rather than purchase items over an extended period of time. They may also in turn purchase complimentary products from other companies.
We have identified 4 examples of companies from different industries that properly implement bundling.
Nordstrom is one of the most recognizable global clothing brands. To help them sell more merchandise they use the concept of bundling by suggesting full outfits for customers. They have a specific page on their website that suggests matched looks for customers to choose from. You can buy those products in bundles influencing customers to spend just a little more to make sure that they have the perfect match for that shirt they were just getting ready to purchase.
We would suggest implementing a similar strategy for your retail store. This helps increase the revenue per transaction.
restaurant: red lobster
Restaurants such as Red Lobster create bundled meals for their customers. The popular seafood chain restaurant serves 11 different family meals, serving up to four people at a relatively low price starting at $27.99.
We would also suggest bundling a full dining experience. For example, you could offer deals for customers that purchase an appetizer, main course, and desert at a lower price to help you sell more of each.
financial services: sofi
A newer brand in the financial services industry, SoFi, sells bundles of services. Their entire business depends on the bundling strategy and makes money by charging fees for these bundles. They have influenced a shift in the financial industry and we are seeing more companies evaluating the way they do business. SoFi has noticed that some customers would like to have all their finances managed by one organization they trust.
As a financial service provider, offer discounts for customers that use your company for 2 or more services. It creates more revenue for you and helps develop more loyalty amongst customers.
healthcare: colorado physical therapy network
The last industry we will look into is in healthcare. The Colorado Physical Therapy Network offers comprehensive plans that offer multiple healthcare and physical therapy services for patients. The same organization that handles your surgery should be the same that helps with the rehabilitation.
If you are a physician that offers just one form of healthcare services, you can also use bundling in other ways. For example, if you are a physical therapist, you may want to also consider selling products like braces, KT tape, and pre-wrap to compliment your services.
If you don’t know where to start, let the customers bundle for themselves. For example, a retail company can offer a 10% discount for a customer that spends at least $50. This encourages customers to purchase more products just to take advantage of what is a perceived value. Above everything, you must make sure that the products you bundle make sense to the customer or this strategy will fail.
For suggestions specifically for your company, please contact us directly to see how we can help you implement this strategy and others in your business.
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