Making the Case for Bundling Services

We recently had a meeting with an Orlando, Florida based social networking company we are considering partnering with. While our services are non-competing, we still serve the same audience and seek the same customer.  Both companies want to add value to our current service offerings to help entice sales.  In a word, we are looking to bundle our services together.

It is my belief that people like things in a neat package they can understand.  When it comes to a sale there are so many questions and concerns a customer has that rambling off a number of features leads to more confusion and lost sales.  Using bundling gives the customer a complete package they can easily digest.  In my experience the best salespeople are the ones that can accurately take a customers needs and provide a bundle that fulfills their needs.  The features, which can be explained, are not the main focus - the problem resolution that the bundle represents is.

Starbucks: Bundling in Practice

Starbucks does not want to dilute the value they have created for their coffee. Considered "premium", if Starbucks was to lower the price and sell more latte's, they would dilute the perceived value of the coffee.  It is not so easy to raise a price once it has been lowered.  So, to help offset this, they turned to bundling their coffee products with some of their food products and created a value that way. Their new "pairings" enable them to maintain the margin and perceived value of their coffee and take a hit to the price of the breakfast item that is bundled with it. Customers end up spending more per transaction, but do not mind as they see a better combined overall value.

It also gives people an excuse for the guilt they feel for spending money at a Starbucks!

In advertising, and especially bathroom advertising, creating value added benefits for customers is a must. We have chosen to use our Mobile Advertising service as a free add-on to our primary offerings.  Also, to display videos on our screens we have chosen to create videos at or near our cost so that the "ticket to entry" to get videos formatted for our screen is small.

Finally

When you have an opportunity, look for what offers you can bundle together for your customers.  Take a couple complimentary services and combine them with a new overall price.  Partner with other companies that are willing to work with you on your services as well.  Sticking together is a key component to weathering out the troughs experienced in economies like today.