It’s a trend that you see today with many large organisations introducing bundle products (e.g. Google, Disney and Apple). From a business point of view, there are a few reasons why bundling your product with strategic pricing can be an effective way. Here are some:
- Increase your sales volume.
Customer will generally purchase bundled products than a single item. Thus increasing your overall sales.
- Reduce in marketing activities and cost.
Instead of advertising for Product A and Product B, with bundle it’s a combination. So businesses save quite a bit when it comes to marketing cost.
- Increase customer retention.
Bundle subscriptions help to retain customers for a longer time compared to individual products. More so if the customer dislikes one of the bundle products; they are more likely to keep the bundled purchase.
- Increase profit margin.
Relating to point 1, an increase in sales volume means an increase in profit margin too. Furthermore, selling in bundle also means selling in bulk, which also helps to reduce your cost of good sales.
- Bundle helps to change consumers’ habits
When you are introducing a new product or service, bundling helps customers to try it out. This will gradually change customers’ habits too.
So you just started a new business, either a digital (SaaS) or a subscription box product, and you are facing challenges in pushing sales or gaining traction. So here are some tips on how to create a popular subscription bundle.
- Make the most out of collaborations and partnerships; more importantly, cross bundle partnerships.
Many large organizations will use their existing product portfolio and turn it into a bundle package. If you are just a start-up with a single product, collaborate with a few 3rd parties. How you want to collaborate is mainly up to you but partner up with products that relate to one another. For example: a gym membership goes well with a music streaming service, movie streaming service goes well with gaming streaming, photo software goes well with cloud storage and so on. Collaboration partnerships allow your business to attract new customers, get exposure from other channels and more importantly learning new consumer behaviour.
- Able to customise your bundle.
In a subscriptions business, companies have the data of their customer’s information in terms of usage and features required. Use the information to enhance customer experience by offering upgrade (multi-tier), downgrade, add-on or etc. This will give customers the flexibility to manage their bundles better. Hence developing a subscription bundle allows users to freely customize their bundles by selected product ranges, duration, payment method and offerings. Give customers the power to choose based on their preferences.
- Mix and match until you get it right.
A crucial experiment in every subscription bundle product is to always mix and match. How do you do it? Many ways, there is no perfect recipe for bundle combinations but you can try by finding a suitable rate, discount or partnership. Furthermore, you can also bundle by pairing certain products based on demographic, geographic and others. To get it right, always test and analyse every aspect of the bundle product result, such as who is buying it, how are they paying for it, why are they buying and so on. Then tweak those bundle products until you reach the right recipe. The right recipe is defined here as the most optimal number of customers or the best ROI.
- Keep it ever green with retention in mind
There will be a time where a subscriber’s lifecycle can lead to churn. Subscription based businesses should think of retaining customers longer and be creative in the effort to reduce churn. Customers who buy in bundle are more likely to stay longer if they find new items in the product. However, a new customer will generally unsubscribe within 3 months if they don’t like the product. To keep your bundle ever green is to ensure that the bundle follows current trends and the products are frequently being updated in terms of features. Furthermore, offering a free trial periods of 2 months (instead of 1 month) could help in retention too.