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Bundling Products and Services



When it comes to leveraging up-selling (some prefer to call it “up-serving”), one great strategy is to use product and service bundles. Think about the last time you were at the car wash. You probably went there to get a normal hand wash, but you may have ended up purchasing a more comprehensive package than planned. Car wash businesses are great at up-selling because they make it very easy to choose from a small range of service bundles at scaled prices. These bundles are clearly laid out and easy to pick from: 

Basic: Hand wash and dry - $15

Silver: Basic PLUS interior vacuuming and tire dressing - $20

Gold: Silver PLUS wax, polish, and air freshener - $25

Platinum: Gold PLUS undercarriage wash - $30 

There are several benefits to offering bundles:

  1. There’s something for everybody.
  2. If the most expensive option is out of the person’s price range, they’re more likely to choose one of the middle options than the cheapest one (because they get a glimpse of the added benefits of the less-basic bundles).
  3. If price is not a barrier, they’ll assume the highest-priced bundle has the best features and buy that bundle without considering the cheaper options.

In addition to bundling, it’s also wise to create tracks for your products and services. Suppose you’re selling a control system to a prospect that doesn’t have the budget for your “platinum” control package. You could say to your prospect, “Let's put the framework in to do this control system. When you’re happy with it, we can add control points as you have more money in the budget to control more systems. This infrastructure can provide a sort of “wireless mesh” over your building so that you’ll be able to get any of these devices talking to the wireless mesh. Let's put the network in first. Then you can add on as you come up with spare dollars in the operating budget.” 

What have we just done in the hypothetical situation? We’ve sold the prospect a basic package with a built-in track for up-selling. Once the framework is in place, the prospect can purchase middle or high-end packages without having to start from scratch. 

If you don’t already bundle your products or services, consider adding this tried-and-true up-selling strategy to your business model. 

On a very related note, I noticed in a recent Tesla ad that one can now purchase an “S60” sedan, which has less range than their S75 model, but then upgrade to the S75’s greater range with a roughly $9,000 software upgrade later on! In other words, it appears that the S60 is already equipped with sufficient battery capacity to take the car to the S75’s range; the additional range is simply “disabled” until you buy the upgrade. Interestingly, the difference between the S60 and S75 pricing at the time of this writing is $8,500. However, if you wait to upgrade the car to S70 range after driving it off the lot as an S60, it will cost $9,000. It’s certainly a clever way to lower the price point for new adopters of high-end electric vehicle technology who aren’t quite ready to buy a $90K car. They give you the luxury of upgrading to the car you’ll probably want as soon as you begin driving the S60 and find that the S75’s extra range comes in handy – and you won’t have to trade in your S60 to do it! 

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Posted by Mark Jewell