Pricing, packages, bundles. Are they right for you? Yes? Start here.
I do a lot of work with telecommunications companies and it occurred to me that a webcast on 'bundling' I did for them last year might have some value to others. The concepts can certainly extend to many other industries, in fact, they are quite interesting when viewed through this lens. So if you are interested in pricing and bundling your products or services, you might want to scan this. I'll include a link to the slide deck at the end of this post.
So, what are the initial questions you want to ask yourself before you dive into bundling or a pricing restructure? Here are a couple to get you started:
- Do you have the margin for it? Sometimes bundles just don't make sense. If they are not for you, don't push it.
- Do you have capacity? This can be defined however you want: time, inventory, capital, etc.
- What are your competitive pressures? Simple question. How does competition affect your pricing?
- What are the goals for your bundling? Simple questions #2. What are your reasons for wanting/needing to bundle?
Reasons to bundle vary. Below are some to consider that MAY apply to you or could if you worked at it.
- Stickiness: in most industries customers in bundles with more products reduces churn significantly!
- Customer expectation: bundles are easy (think Extra Value Meals and 2for1 deals). Customers like them.
- Easier to sell/explain/understand: putting stuff together that makes sense is easy to buy and sell.
- Increase revenue: Often bundles are used to raise Average Revenue per User/Customer.
Be relevant if you decide this approach is right for you.
- Talk about what is important to customer, not what is important to you.
- Create products that show you are concerned about customers needs.
- Educate them concerning products and services they want or need.
Finally, be creative with your creative!
- Be thoughtful about your customer. Use words & graphics that connect to them & pull them in.
- Be consistent with your look & message. About when you are getting bored, they are starting to hear.
- Know the hot buttons and push them. What matters to customers? It shows you care and are listening to them.
Good luck. Please let me know what questions you asked yourself as you considered this for your industry or business.