Adding value for your customers
To have an effective strategy you will need to understand consumer value perception. In short, you must be able to persuade your customers that the alternative you are suggesting has greater value than their original choice.
Magento Commerce has great tools for managing related products that can add value. This might be because the alternative or additional items you recommend will provide a better solution to your customer’s problem, add a ‘feel good’ factor, enhance their reputation with others, or because there is an actual saving for them.
Upselling and cross-selling
Upselling is a strategy to sell a bigger or better version than your customer was planning to buy. This can include a higher product specification, a different model or the same product with value-added features that increase its perceived value.
Cross-selling offers your customers products related to the one they plan to buy. They can belong to different product categories but will complement your customer’s purchase. For example, McDonald’s position their apple pie dispensers behind their cashiers, tempting customers at the point of sale. The head of the corporation’s US division said that moving the dispensers to the back of the kitchen area would probably reduce apple pie orders by half.
What is a bundle?
Bundling combines both upselling and cross-selling. Amazon’s strict bundling policy says that bundles should be made up of different products to provide a new product that adds convenience or value for buyers.
Items in a bundle should be complementary, enabling or enhancing use of the other items in the bundle or adding convenience.
Amazon is the recognized master of upselling, cross-selling and bundling. When you choose a product on Amazon, you will often see other items that are ‘frequently bought together’.
Often the most expensive item in the bundle will be reduced in price when you buy multiple products, and shipping might also be reduced or without charge. When Amazon introduced its upselling strategy in 2006, sales increased by more than a third.
Your customers appreciate personalized homepages that reflect their interests; they will also help you to build your brand and customer loyalty. You can curate their content and navigation options based on how customers came to your site, their recent browsing history, or their past purchases.
Artificial intelligence (AI) experts, Nosto, offer a really useful ‘add to cart’ option, showcasing related products at checkout to help you increase overall sales. Their ‘live feed recommendation’ allows you to dynamically add a carousel of what other shoppers are currently viewing and buying, related to whatever your customer is viewing.
Clerk.io uses AI to automatically show your website visitors selected products through their personalization engine. It includes prebuilt options based on hot products, previous orders, visitor click history, and best cross-selling products, to deliver more relevance to your buyer’s journey.
Optimizing your bundles
Analytics - it will be important to track your results to see which bundles are popular.
Testing - A/B testing or split testing will show you which version of your bundle is most popular, by offering half of your clients an alternative.
Composition - bundled products might be used together or be complementary; you will need to think about what works well for your customers and for your business.
Mix - you might want to make items available as single products as well as part of a bundle. This mixed bundling approach gives your customer the option to buy a single item if they don’t want to purchase the whole bundle.
Pairing - your catalog will include new and slow-moving items and you can give sales a boost by combining them with more popular items that sell quickly.
Accessories – you can add accessories into a bundle with your more expensive items that your customers might otherwise have forgotten.
Promotion - consider making a web page dedicated to your bundles to encourage bargain hunters to visit, rather than having to look through your whole site.
Making the most of Magento bundles
Products that are ‘grouped’ in Magento are often also sold individually but they offer limited customization, usually only through choosing items and their quantity. You might choose to bundle products that are rarely, if ever, bought separately.
Creating product bundles in Magento is straightforward. You simply choose the option to create a bundle from your catalog in the admin menu, complete the product details and add the bundle items. For example, for a customer buying a laptop computer you could include a carry case, an extra USB cable and screen cleaner.
This makes purchasing easier for your customers and you can also offer a competitive bundle price which will give them an incentive to buy and help you to sell items that are in less demand.
You can include simple products or virtual products with customization options. These products are called ‘child products’ and can be collated in sections, allowing customers to make their own choices.
A bundle can offer a much wider selection, allowing customers to choose several products at one time. Alternatively, radio buttons can be used to give the option to order multiples of a single product. Customers can even create a unique product. Using the computer example again, your customer could specify their own memory and processor to meet their requirements.
Required purchases within the bundle can be marked, but optional non-required fields can also be included.
Your administrator can define the stock keeping units (SKU), weight, and price, with either a fixed or dynamic values.
With a dynamic SKU each bundle item with have a suffix added. With a fixed SKU a unique reference will be created for each bundle item. A fixed weight will be determined by the products in the bundle, while a dynamic weight can be calculated from the bundle items chosen. If you set a fixed price for a bundle, you can enter a base price and taxes. Dynamic prices disable price and tax attributes, and the price of the bundle is based on the prices of the items selected.
You also have the option to select ‘price range’, displaying the lowest and the highest prices for the bundle. If you set ‘As low as’, the lowest possible price of the bundle will be shown.
Speak with one of our experts to find out how to unleash the power of Magento bundles for your business.