Mar 30 | Dana, Director of Public Relations
Internet, cable, and phone. Flight, hotel, and car rental. Whopper, fries, and a drink. What do these products and services have in common? They are all among the most recognized examples of product bundling.
What is Product Bundling?
In marketing, bundling is commonly defined as a selling strategy where two or more products are sold at one price, often at a discount to the customer.
For example, a communications company may choose to offer a cable TV bundle that allows the subscriber to enjoy cable television, local telephone service, and Internet access as a single product offering, rather than having to purchase three different services at a cumulative higher rate.
Benefits of Bundling
Product bundling can save your customers time and money. Rather than having to deal with multiple vendors in order to have access to multiple products, the customer has one central vendor for all his or her needs. This concept of one-stop shopping means the client spends less time keeping up with various vendors, and has one central pipeline when there is a need for customer support.
Companies also benefit from providing various types of bundled packages to their clients. In many cases, the cost and convenience created by product bundling go a long way toward promoting customer loyalty. This makes the client less likely to switch to another company for any of the products or services, especially if the price for the bundle is competitive. Product bundling also gives you more latitude when it comes to pricing. Anytime you eliminate pricing by line item, people can’t shop your price as easily.
How to Bundle
What are some of the considerations that go into developing a product bundling strategy? First, look at unique ways to bundle complementary products. Then, identify customers that would be good candidates, determine product configurations and set a pricing strategy. Also, think about how to advertise the bundling program. Get your sales staff involved and consult your advertising agency early on.
After developing a pricing strategy, you should test it on a sample group to determine whether it has appeal for a wide range of customers.
A company that can provide its customers with hard-to-resist ‘package deals’ will move more product, bring in more money, and attract loyal customers. Contact us today to build your own bundling strategy.