There is a problem with bundling.

We like to bundle things together, to say “If you buy X, get Y as well for less!” And the simple problem is that our customers don’t actually always want X. We treat bundling like it solves our problems, but it doesn’t. It just makes angry customers who have more than they need, and pay more than they wanted for things they don’t use.

Let’s think of it like a coffee shop for a moment.

You go to Mooncoins and you want a latte and a gluten free donut. When you get there, you look for your $5 latte and see that you can’t buy it anymore but you can spend $10 for a latte and a vegan donut, non-gluten-free. If you want the gluten free bundle that’s another $15 and it comes with a muffin. You don’t want the muffin. You want the option to name your own bundle.

Okay, so how does this relate to software?

If you live in the US, you’ve probably heard about the Progressive insurance company. Yes, the Flo ones. Since they own Jacob’s Field in Cleveland, I hear a lot more of their commercials than I care about, but they have a weird deal with a ‘name your own price bundle’ where you pick what you want, and how much you want to pay for it. Within reason.

This means we ask “What are you bundling?”

I get waxed once a month or so and they offer ‘packages.’ There’s a ‘whole face’ package and a then separate services for lip, chin, and eyebrows. What I want is lip and chin, which they don’t offer, so instead of paying less for two services (which is what you get in a package), I have a choice of paying more for a package I don’t want (whole face) or more for two services I want (lip and chin).

The company wants me to pay for a package, which would save me quite a bit more than buying the lip, chin, and eyebrows as separates would cost. But they don’t have a ‘pick two’ option.

When you decide what you want to put in a bundle, you presume you know more about what the customer wants than the customer. And the flaw in this plan is that you don’t know more than the customers. You presume you know what works best, but you don’t.

You may have an idea of what works best for the people you’ve run into, but some of them would look at the price difference between paying for two services and paying for a package, see than it works out to less than $50 a year, and go for it. Then you have someone who thinks that $50 a year isn’t nothing, and would like to save it and not use services they don’t really want.

Bundling is meant to reduce options and let people pick what they need. What it more often does is require people to make different decisions of what they want and need, but also what the value is on those things in time and money.

Maybe we should start rethinking what we bundle and instead consider how we bundle. Let the customers have options. Use features like “People who bought X also bought Y.” Add in discounts “If you buy 3 products, get 5% off your entire purchase.” Offer them example bundles that are your current deals “Most people buy these 3 together. Purchase them now and save 5%, or mix and match your own.”

But start looking at how people purchase your products as a whole, and give them discounts not on the bundle you invent, but on the bundle they create. Guide them to what they need, not what you think they want.

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