Product bundling is a great strategy to use when you want to create additional value for your business. Product bundling is simply the process of grouping together certain products to create ‘packages’ which you then sell to your clients. If you’re in a service-based industry then “discount books” do the exact same thing. At the heart of all value-added propositions lies the need to help make your clients’ decision-making process easier.
Many people are very indecisive by nature and will often prefer not to make a decision at all rather than make the wrong one. Product bundling can help people make easier decisions. Consider these examples of product bundling to stimulate your own thought processes.
A dentist could offer 30% off a teeth-whitening program after each visit by a patient. A person is more motivated to buy this product having just gone through the physical and financial pain to have their teeth look great, and naturally they’ll want to keep them looking that way?
A landscape gardener could offer a do-it-yourself garden maintenance kit after each job… including gloves, a spade, a rake, a broom, clippers, a compost bin and so on. This enables the client of the new garden to keep it in the same pristine condition. When added to the cost of the new garden, this bundled offer can be positioned to sound like an excellent investment.
What about a photographer? They could bundle enlargements, a photo album and a DVD of all the session photos taken. Customers are thrilled to receive this complete service and it gives them a permanent record on DVD for future generations.
A locksmith could provide an alarm system, roller shutters, a fire protection system, a car alarm, a personal attack alarm, exterior alarm warning signs and stickers and possibly an ozone detection system where appropriate. People often need a locksmith due to a break-in or fear of one, so why not offer them a ‘complete home-protection package’. Some people will definitely say yes.
By the way, most locksmiths aren’t qualified to install some of these types of high-tech systems. No problem… just joint venture with businesses that are qualified and work out a referral fee for driving qualified clients to them in droves. The locksmith can go ahead and sell the service as well as collect the revenue… then pay their JV provider the reduced fee.
Consider a home builder or remodeling contractor. If they build or remodel multiple homes every year (some builders construct more than 50 homes annually), they typically contract with suppliers and receive huge volume discounts. This is especially true for electronics.
Consider a builder or remodeler who agrees to buy multiple packages of a whole home entertainment and security system including a 42 inch HDTV, a complete high quality surround sound system, a complete home security system including surveillance cameras at all entry points to the home as well as a complete fire protection and monitoring system.
The retail price of this package would easily exceed $25,000 but the builder or remodeler could acquire them in volume for around $6500 since installation would not be part of their costs. Since the builder or remodeler will already have the home stripped to the studs, installation can be handled by their crew for pennies on the dollar.
Now imagine a builder competing with other builders in a moderately priced neighborhood. All the builders offer homes in the $250,000 price range. Our builder offers their home for $256,500 (includes the additional $6500 out of pocket expense to the builder) and it comes standard with a $25,000 home entertainment and full security system for FREE! Which builder would you buy from?
In fact, what if this builder offered that new home for $260,000? Do you really believe that additional $3500 would prevent anyone from buying this home? I seriously doubt it. And if it did, the builder always has the option of reducing the price. They could even maintain their original price of $250,000 and lower their profit margin on each home they sell. This would allow them to possibly double their normal sales volume and practically doubling their overall new profit every year.
The remodeler could use this same type of positioning for every remodeling job they bid on.
What kind of value Bundle can you Create? If you would like help looking to add value versus the discounting madness, let’s chat.
There are three parts to creating a marketing message that delivers new customers. The first is getting clear on who your target market is. (We will get to how you solve their problem and the message in subsequent articles.)
Let’s look at a Real Estate Agent as an example. They may be able to sell commercial and residential real estate. And they could sell to anyone. But as they communicate their message many people won’t hear it because when they hear “Real Estate Agent” they have a concept of what that is. The rest sounds like Charlie Brown’s mother “Wah, Wah, Wah Wah, Wah.”
Now when the agent gets very clear on who they can serve the best. The clients that best fit with their talents, skills and personality, now they can create connections. For example, “I help millennials find the Loft of their Dreams in downtown Denver.”
The fist step is to identify who qualifies for your target market. There are four things to look at:
- They have a need, want and or desire for your service or product.
- They have the budget for it.
- They have the decision-making authority
- They have access to you and your business
First look at your product or service. What need, want or desire does your product fulfill? What does your product cost? Who can afford it who will be willing to pay for it? Who tends to make this buying decision?
Did you answer the questions?
Do you have a better sense?
Demographics also play a role in developing your target market. Who does my product cater to in terms of Age, Income, Generation, Occupation, Education, Is ethnicity important?
Then there are the Psychographics. These tap into the beliefs and emotions of your target buyers. What is their lifestyle, who do they listen to, what do they read? What is their motivation are they leaders or followers? What values and beliefs do they hold? Will they be supportive of the environment or do they care? What are their hobbies?
Now that you have this information you can begin to describe your target client your ideal client. As an example, it might be something like:
“My target customer is a senior manager in a health system who has risen through the ranks to her position. She has earned her degree through night-school and now that the kids are out of the house, she is ready to move up to the next level of management a Director role. She wants her team and organization to thrive.”
Now for the research. Does this target customer exist, and do they want what you are selling?
You can research this through a variety of ways. Beginning with the resources at the library. A librarian can point you to the resources to see where this demographic exists. Are they in the zip codes you serve? If not do you want to adjust your target or move your location? You can also buy research.
Then there is primary research. That is, you out in the environment where your buyer is hanging out. What are they doing? How are they spending their time? What do you notice about them?
Then there are surveys. If you have a list, you can survey the market to see what their preferences are. If you have a website, you can have some tracking analytics to help you identify who is finding you and what their characteristics are.
Another method might be a focus group. Here you gather likely buyers and interview them about the offering, their motivations, what they like and don’t like.
Once you have done the research that you can determine, is there a market? How does the market want to interact with my product or service? Is the market large enough to support my dreams?
Now you know who they are and what they want. In our next conversation we will explore how we can uniquely solve their problems so that we are the choice for their business.
If you would like help identifying how you can identify your target market or if you are interested in my 45 minute break through challenge (we will find $10K – $50K perhaps $100K in 45 minutes or less.) Contact me at CALENDLY LINK
Image Courtesy pf Cliff from Arlington, Virginia, USA [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)]