Master Pricing Strategy: Why Product Bundles are Essential to Marketers

The Honest Company is a great startup example of how a marketing team has mastered product bundles at checkout. In fact, it was the diaper and wipe bundles that enabled Jessica Alba to build a 1 billion dollar business

These are the diapers that gave The Honest Company its start and indeed still account for a large proportion of sales: About 75% of revenues still comes from online commerce, and the majority of that is from the company’s $79.95 monthly bundles of diapers and wipes – Forbes

Go visit their site and try to put something in your cart and you’ll see what we’re talking about. They do an amazing job highlighting the perceived value and savings of bundles:

2016-04-13 21.38.04.png 2016-04-13 21.37.10.png

Brands have been bundling for decades but not all of them are able to communicate the opportunity to increase value and savings as well as the Honest Company as above. They also have them on subscription that is a valuable source of recurring revenue. Bundles they are really the gift that keep giving. They increase average order value and help vendors save on shipping costs.

To summarize, every good marketer should develop product bundling into their lifecycle strategy for these reasons:

  • Create additional value combining
  • Introduce new higher price points
  • Diversification of deals and promotions
  • Create exclusive offers for partner promotions – affiliate, big box, daily deal

By combining multiple products you’ve increased the perceived value of your bundle significantly. You can then increase the price to the consumer, which is really helpful if  you’re trying to produce larger margins for a new channel. Bundles can also help introduce or gain exposure for lesser known products in your lineup.

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