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As you start a small business, it’s important to consider how you’ll price your goods and services to optimise your sales.
For businesses that offer a variety of products or services that complement each other, the bundle pricing strategy might be an effective approach.
This strategy combines related products to encourage customers to buy more at once. Would you like to learn more? That’s where we come in.
This guide covers the bundle pricing strategy, including:
- What the bundle pricing strategy is
- Common examples of bundle pricing
- How to use it for your business
What is a bundle pricing strategy? : Definitions
By definition, the bundle pricing strategy is when a company offers several products or services together at a typically discounted price.
These packages simplify the shopping experience and help businesses sell more with each transaction.
There are three main types of bundle pricing, including:
- Leader bundling – matches a leading or primary product alongside relevant products of lesser value. The primary product draws in sales for the smaller products.
- Pure bundling – exclusively offers certain products or services as part of a bundle. If people want one piece, they need to buy them all.
- Joint bundling – combines two or more products or services to offer them for one price. Customers can still buy each product separately, but bundling might reduce the price of each item.
Who should use this strategy?
The bundle pricing strategy can benefit many industries, making it accessible to small businesses. It’s an excellent approach if you have various products or services that work well together.
Here are just a few of the places you might see bundle pricing:
- The food and drink industry
- The technology industry
- Toys and entertainment
- The travel industry
- The agriculture industry
What are the pros and cons?
This strategy predicts buying behaviour by pairing products people should buy together. As a result, it can increase profits for your business. But there are also drawbacks. So, let’s look at some pros and cons.
The pros of bundle pricing:
- If customers buy bundles, they can save on the individual items and feel rewarded.
- You can earn more from a single transaction when people choose a bundle.
- The approach lets you boost sales of less popular items by pairing them with your top sellers.
- It simplifies the purchasing process by pairing complimentary or essential items together.
The cons of bundle pricing:
- Some customers may wish to buy items separately so exclusive bundles could lose sales opportunities
- If you fail to package products wisely, people may not need some of the items and turn to individual products instead.
- Bundles require a higher one-time investment that some customers may not be willing to pay.
What are some examples of bundle pricing strategy?
Now that you know the bundle pricing strategy definition, you might want to see a few examples. Let’s look at some popular bundles in action.
The Tesco meal deal
Grocery shops like Tesco often offer meal deal bundles for a discounted price. Customers can get a main, snack, and drink, saving on each part. This system promotes the sale of smaller items while people do their weekly shopping.
Amazon camera bundles
Digital cameras can be pricey, so you may not consider adding on the accessories. But with an Amazon camera bundle, it’s a better deal to purchase the camera alongside an assortment of useful products.
The bundle adds value for the buyer while increasing the sales of these items.
Birchbox adopted a pure bundle strategy to offer skincare and beauty products. This business uses the subscription model to send custom boxes of beauty products. They also sell pre-made kits.
People don’t have to worry about deciding which products to try. Instead, they can test a bunch of products to decide which is best for them.
Jet2Holiday all-inclusive packages
Travel companies like Jet2Holidays often bundle their travel services to offer all-inclusive holidays.
These packages offer flight, stay, and experiences for one blanket price. It enhances their sales while simplifying the travel booking process for customers.
How do I use the bundle pricing strategy in my business?
The bundle pricing strategy might be a great way to promote sales and help you increase earnings. So, how can you introduce it into your business? Let’s go over the main steps.
Determine your approach
First, determine what type of bundle you want to introduce into your business. To do this, look at the products or services you offer and consider your target audience. Predicting client behaviour lets you strategise effectively.
As we mentioned earlier, you might use one of the following:
- Pure bundle – If you sell plants, you might bundle them with pots since people often need both.
- Joint bundle – If you sell cleaning products, you could bundle the essential household cleaners.
- Leader bundle – If you sell technology, consider bundling your top-selling tech with necessary accessories.
Pick your products or services
Next, find your best products or services to combine. You’ll need to understand which ones people might want to purchase together.
Consider sending a survey out to understand if people see value in buying them together. This information could help you estimate the success of that bundle.
To get people talking about your bundles, incorporate them into your marketing efforts. You could advertise these offerings on your business website and post them on social media.
As you promote them, focus on what value they offer. For example, you might point out that bundling saves customers money.
Track its success
Measure how well your bundle performs by tracking the sales you earn compared to individual product sales.
If you notice the bundle works well, you might want to introduce more into your sales strategy. Alternatively, you could re-strategise if people don’t seem drawn to it.
Strategise your pricing for better sales
With this article, you can incorporate a bundle pricing strategy into your business effectively.
This approach can help you boost sales and earn more with each transaction. Plus, it can save customers money and simplify their purchasing decision.
If you’d like to learn more about pricing strategies for small businesses, consider checking out these articles next:
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