The Art Of Bundling

Holiday fatigue got you down? If you’re like the rest of us, going back to work after the new year is kind of like having a root canal: painful but necessary. Spend the first few months of 2015 learning to work smarter, not harder. One way to do that is to exercise the power of packaging promotions. Let’s talk about bundling.

Bundling has been around since the dawn of the fast food industry. “Would you like fries with that?” became the flagship catch phrase that encouraged spending and increased revenue. Since the creation of the “extra value meal,” numerous businesses have hopped on the bundle bandwagon as an effective way of up-selling their customers. Maybe the most obvious (and perhaps obnoxious) modern-day participants are the companies offering cable, Internet, and home phone services. But regardless of the industry, consumer-spending trends are pointing to the fact that people are now focusing more on value, and what their money can do for them.

The beauty industry may be one of the most lucrative bundle opportunities, but also one of the least represented. Promotions that include multiple services encourage spending, expose your clients to new products and services, moves inventory, and increases revenue. If you design your marketing strategy in 4-6 week increments, you will have less time to promote but a better chance at creating a sense of urgency within your clientele. If you want clients to buy into the exclusivity of a special offer, you have to make the bundle attractive and show the real value of it.

For instance, let’s put together a package called Prenatal Princess that includes a full-body massage, a foot reflexology session, and aromatherapy oils provided at a discounted rate. For the sake of simplicity, we’ll say the cost of a massage is $100, the reflexology is $50, and the aromatherapy is an extra $20. Cost conscious clients may look at that price tag and think for $170 it’s a “nice to have” but not a “need to have.” A bundle would allow you to not only drop the price, but also raise the value. Pregnancy is a rough time for lots of expecting mothers, so chances are that mommy-to-be could really use those essential oils as a soothing and relaxing treat.

Consider the cost vs. retail price for the services. If you dropped the package price 20%, your clients would save $34 and you would still come out profitable because you were able to up-sell. To our Prenatal Princess, $136 suddenly seems much more affordable than $170-because it is. It’s important to realize this is your opportunity to present clients with products and services they may not ordinarily purchase.

Let’s say your client has never had a Keratin treatment, and those are usually a high-ticket item. If the average Keratin treatment is $275, plus a $50 cut, and $55 for a sulfate-free shampoo and conditioner for aftercare, the total tab is $380. A 20% bundling discount equates to a $304 tab for you, and a $76 savings for your client. Before you think you’re throwing money away, remember this promotion will only last for 6 weeks tops. By the time your client comes back in, she will have had plenty of time to fall in love with the treatment and be willing to pay full price.

If a Keratin treatment lasts 3 months, be sure to pass the value onto your client by letting her know that smooth and manageable hair is only costing her $3 a day. That’s less than a daily latte habit! A good rule of thumb to follow is if you’re bundling two items together, knock 10% off the retail price, 20% for three items, and 30% for four.

Remember, these are items they probably wouldn’t have purchased otherwise (and if they would have-consider it a treat for their loyalty), but they would be silly to pass up such a great deal especially when it won’t be there the next time they come in the salon. The strategy is to increase the volume of products and services you sell in half the time. The result is in an increase in your revenue without having to put in the energy to push each of the items separately.

Happy New Year and Happy Bundling!