How’s your eCommerce bundling strategy going? Are you maximizing the full profit potential when a customer buys from your website?
First lets talk about cross-selling. There are 2 basic types of cross-selling strategies 1) similar products & 2) related products. Don’t get them confused.
Similar products are products made to satisfy a similar need. It’s a good idea to share similar products to your potential customer if they are at the early stage of their shopping experience. This helps tell the buyer you have a wider selection and not to leave your site if the first item doesn’t match their needs. If you’re having a high bounce rate, maybe refine your similar product strategy as something to lower your bounce and improve your conversion for traffic that’s early in the funnel.
Tip: NEVER SHOW SIMILAR ITEMS IN YOUR SHOPPING CART. YOU DON’T WANT TO CONFUSE THEM.
Related products are items that relate to the main item they are buying. Most of the time they are accessories, components or even warranty plans. Selling related products is the focus of this blog post so lets dive deeper on this one.
There are 3 basic strategies to sell related products:
1) As an entire package
2) After add to cart
3) Before add to cart
From my experience, I’d say the most popular strategy is the first one where sellers will bundle a package together with many related items then sell the package as one complete item. Much like ordering the #1 at your favorite fast food drive thru. This strategy works great for items that make sense to bundle and it’s easier to build in extra profits that make it hard for the buyer to compare apples to apples and notice your additional margin. I’m a huge fan of bundling in this manner and recommend sellers find ways to make their offering unique through creative bundling. Be sure to bundle more value than costs and you’ll find this strategy to be a winner. But, be careful not to over bundle. Adding items to the package that don’t carry a perceived value and only add to the cost can have the opposite effect of making your package less attractive than the competition.
Let’s look at your own experience at the fast food restaurant. You just ordered the #1 super sized and you’re ready to pay the cashier. They ask you one more time before swiping your credit card, would you like to add a pie or shake with that? This takes us to the 2nd way of bundling and that’s by asking for the upsell after the buyer “adds to cart” but before they do their final checkout. This is probably the 2nd most popular bundling technique and most website shopping cart software do a great job of upselling “related” items in the shopping cart stage of the buying process. But let’s be honest, how often do you add that extra shake and how often does a buyer add a related item at the shopping cart stage? It’s less often than you’d like. I’m shocked at how many eCommerce experts tell people they need to be upselling during checkout because it will make them rich. I have a feeling many of these experts don’t practice what they preach enough to know better.
Tip #2: whenever you listen to an “Expert” be sure they actually do what they say you should be doing. Otherwise, turn around and run as fast as you can! I watch so many sellers out there looking for advice and help at growing their eCommerce business being told bad information by professionals who should become a professional car salesman instead because they know more about used cars than they do eCommerce.
I’m not saying you shouldn’t upsell, but let me tell you something that works far better and I’ve been testing this strategy on my own website for the past couple years and I have solid data that tells me this approach blows all the other approaches out of the water. I’m actually shocked I don’t see anyone else talking about this strategy. I discovered it by accident as I was in the process of setting up some of my items and I thought to myself, why not try it this way. As you know, I love testing new ideas all the time. Some turn into great success, others turn into great case studies.
I was shocked by the results! With this approach I’d say 60-70% of my customers add additional highly profitable items to their package! That’s right I said sixty to seventy percent!
My approach is to first bundle my product into a unique package like we talked about in strategy 1. I bundle the things that are most common and most of my customers will value while at the same time making my package different than any other package on the market. I also try to bundle items from different factories to build packages that are harder than average to duplicate.
Tip#3: Make bundles that are hard to duplicate!
THEN…and here’s my magic sauce formula…I include my high profit add-on items as product options on the product detail page. These product options don’t necessarily make sense to bundle with the original package because not everyone will want these additional accessories but make great sense to add on so the buyer has the option. It might be a wire to make installation easier, an extra headphone in case they have more than two kids and even an extended product warranty. These “Options” are selected by the customer BEFORE they hit the add to cart button. Some options actually require the customer to make a choice before going forward. When they add the option to their desired package, the system automatically (this is important) increases the price for the entire package with the added option included. This does 2 things. 1) It makes it simpler for the customer by doing the math and telling them their new total instantly. 2) It makes it difficult for the customer to know the exact cost of the additional item without doing the math.
Also with this approach the customer is introduced to the original package at a lower price than they will most likely checkout with after they add more accessories and options to their final bundle. If they would like the standard package, they can have it at the starting price. But for just a few dollars more, they can add valuable accessories that will make their life easier with just the click of a button. We make it easier, much easier than adding the item after they reach the shopping cart page. And in eCommerce, we all know easy (this is also important) wins the race.
This approach is like combining the huge success of the first bundling strategy with the desired but seldom achieved success of the 2nd strategy. Over the years I’ve tested both strategies and found with a significant margin that this 3rd strategy outperforms every time. Give it a try today!
Depending on what shopping cart software you’re using will determine how easy or hard it is for you to setup this selling strategy. I use Big Commerce for my shopping websites and it has features that make this very easy to setup. We also manage Big Commerce websites for other sellers. If you would like us to help you setup this method of bundling, we’d be happy to do so, give us a shout.
Cheers to selling smarter!