Once you have a paying customer in your ecommerce funnel, your focus should be to provide the maximum value to them. It can be in terms of discounts, offers, or most importantly, convenience.
But how do you offer greater convenience, without compromising on your profit margins?
By leveraging growth strategies like upselling and bundle pricing, you can offer convenience and discounts to your existing customers, while also increasing your revenue and margins.
Quick definition: Bundle pricing is a pricing strategy that offers multiple products or services at a reduced price. It works by giving a small discount to the customer as an incentive for purchasing more quantities. Retailers use this as a sales technique to drive more value per purchase.
On the other hand, upselling is a growth strategy where you offer an ‘upgrade’ with a higher-priced item. You can show similar product recommendations on the product page, checkout page, or post-purchase thank you page.
You can also suggest complementary products, or add-ons for an item, called cross-selling. For example, if a shopper is purchasing a face cream, you can recommend a relevant face wash to complement the purchase.
The result is an increased average order value (AOV). By offering relevant product recommendations, you’re reminding your customers of additional products they might’ve needed, but didn’t remember.
And as your customers check out more products, their average cart value increases, helping you increase revenue.
It’s a win-win for both your customers and you.
Bundle Pricing Examples
Here are some DTC brands using bundle pricing to increase their AOV and revenue:
Harry’s, a men's grooming subscription brand, uses mixed product bundles by bundling items according to activities like a shave, shower, or skincare routine.
For example, they offer a "clear skin essentials set" which includes skincare must-haves like face wash, toner, and a blemish treatment gel. While the set doesn’t offer heavy discounts on the products, it still offers convenience and the shopper doesn’t have to purchase separate items for their face care.
They also use terms like “essentials” and “full suite” that make the bundles appear as necessities.
Takeaway: Use persuasive copy and bundle your products according to the usage.
ASOS, a DTC fashion brand, uses pure product bundling to sell items that can't be purchased individually.
They wanted to sell a Fujifilm camera. But customers are unlikely to choose ASOS for purchasing photographic products because it is mostly an online cosmetics and fashion business. As a result, the most effective way they can persuade buyers to choose their photography products above others is to offer them as part of a special bundle.
So, they bundled a camera set with sheets of film and made the products “exclusive”, meaning they can’t be purchased separately. Club it with a discount and you have customers checking out the bundle as either a gift set or for themselves.
Takeaway: If you want to introduce products outside your niche, leverage price bundling to sell them to your existing customers.
How to Design Pricing Bundles
While you can bundle products based on the usage, leveraging post-purchase data will help you create bundles that your customers need.
Here’s how: Create cohorts of people who purchased a particular product or based on their AOV. After that, track and analyze a repurchasing pattern where the cohort is:
- Repurchasing the same products in their subsequent orders, or
- Repurchasing another product to complement their first purchase.
In the first case, you can create a bundle with multiples of the same product, for example, buy 3 at 40% off. Bombas, an apparel brand, offers such discounts on packs:
In the second case, you can create a bundle of multiple products to compliment the main product. For example, a moisturizing set like Glossier’s:
Let’s take a look at how some DTC brands use upselling as a growth strategy to maximize their revenue.
Chubbies, a DTC apparel brand, sells summer wear clothing products. They have cleverly used gamification to upsell their products.
They host an exclusive summer sale every year, offering rewards as more products get added to the cart.
The rewards are only applied when the extra products are added to the cart, enticing shoppers to purchase more. As the products are usually lower-priced, Chubbies make sure the cart has a higher AOV to minimize operational and shipping costs.
SuperGoop, a DTC sunscreen brand, cross-sells on their cart page, offering their best sellers.
After you add an item to your cart, SuperGoop places the CTA for their best seller of the same item category in your cart.
Similar to bundle pricing, your DTC brands can use post-purchase customer data and examine customers’ AOV and cohort purchase patterns to create the best upselling strategies.
For example, identify and offer the best sellers, like SuperGoop, which increases the chances of purchase since the demand is already there.
Bundle Pricing Tools & Upselling Tools
Both upselling and bundle pricing require hyper-personalization. If the products offered for upsells or cross-sells are not relevant to your customer, the conversion rate will be lower.
You can use AI-powered tools that leverage customer data to show relevant product recommendations. Here are some bundle pricing and upselling tools:
Bundle pricing tools
- Bold Bundles for Bundle Pricing: Bold Bundles allows you to bundle your products in a variety of ways. You can let the customers choose the products included in a bundle, create “buy one get one” bundles and place the bundles on your storefront automatically to highlight them.
- Bundler for Bundle Pricing: Bundler is a bundle creation tool that comes with a free plan. It allows you to create bundles even in subscriptions, choose a discount type, and create upsell popups.
- Unlimited Bundles & Discounts by Revy Apps: This bundling tool integrates with your Shopify store without interfering with your theme. You can create bundle offers for holidays and sales in advance, create a dedicated “bundle” page listing all your bundles in one place, and control the stock button.
- Rebuy for Upselling: Rebuy uses your sales data and customer behavior data to create personalized upsells and cross-sells offers. It also automates order follow-ups for you.
- One Click Upsell: This upsell tool allows you to offer upsells at different touchpoints. For example, you can create in-cart upsell, post-purchase, and thank you page upsells.
- ReConvert for Upselling: ReConvert focuses on creating targeted post-purchase upsells, making sure you’re not distracting the customer from their purchase journey.
- AfterSell Upsell App: AfterSell helps Shopify brands create curated and powerful post-purchase offers and checkout upsells with deep personalization.
Grow Your Brand with Upsells and Bundle Pricing
Upselling and bundle pricing are the key to an increased AOV and minimized operational costs.
The catch: It’s difficult to create bundles and upsell recommendations relevant to your customers. The offers are often created based on the assumption of customer needs instead of customer data.
To take the complete benefit of these growth strategies, you need to spend some time analyzing post-purchase data and customer behavior. But as it can be time-consuming and prone to human errors, use a tool like Peel that automates the post-purchase analysis.
You can segment your customers based on any value like the first purchased product, location, SKUs, and view the corresponding data of AOV and repurchase rate. This makes sure your offers are data-driven, increasing the chances of conversion.
Try Peel for free today to unlock your revenue growth potential.