Product bundles are a great way to increase your average order value while providing customers a better experience. They allow you to package several products that are commonly rented together and apply discounts over renting them individually. This means that instead of someone renting one product from you and the rest from others, they will rent them all from you.
They can be a great way to stand out from the competition. For example, you might offer a great range of camera bodies, but your competitor has you beat on lenses. However, you provide camera bodies, lenses, and accessories in a more affordable package. A customer is more likely to rent from you than your competitor because you are cheaper and more convenient.
Let’s look at how you can leverage product bundles to add more value, increase customer spending, and boost revenue.
What are product bundles?
A product bundle is a collection of individual products that can be bought or rented together for a lower price than individually. Some examples include cameras bundled with accessories, party tents bundled with tables and chairs, and campervans bundled with bikes and accessories. It is not uncommon for AV, party, and RV rental businesses to use bundles exclusively.
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Why do product bundles work?
Product bundles are all about the value proposition for customers, and it can be a delicate science to find the right mix. An essential part of creating a bundle is looking at what customers want and what they are likely to rent alongside other products. They also need to make economic sense for both you and your customers. Otherwise, you or they will lose out.
A typical example you may be familiar with in retail is game consoles bundled with games and accessories. If someone buys a console, they will likely purchase games and accessories too. Of course, they could buy these individual items from different stores, but if a store offers the console with one of the most popular games at a discount, they will likely make more sales.
This same psychology can be applied to rentals. For example, when someone is looking to rent a party tent, they will likely also need tables and chairs for their guests. They could rent them individually, but if a business can provide them in a package with a discounted price, it is much more convenient for them as they only have to deal with one company, and they save a buck.
Which products can be bundled together?
The best approach for creating product bundles is to add products that complement each other and will be used together, like in our previous examples. Product bundles must make sense to customers from both a use case and value perspective. For instance, you could bundle a few bikes and helmets for a family, but bundling bikes with kayaks wouldn’t make sense.
A great way to decide what product you should bundle is by looking at past customer orders to see if you can find any trends. You can also speak to customers to see if there is something they are looking for that you don’t currently stock. This data is vital if you accept online bookings, as customers can easily compare and cross-shop with your competitors.
Here are a couple of examples that work for rentals:
- Cross-sell bundles - Where products are bundled with complimentary accessories or parts that go with the main product—for example, bundling cameras with lenses and a carrying case.
- Pure bundles - Where the products that make up a bundle are only available as a bundle and not able to be rented separately.
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What are the benefits of product bundles?
Not only are product bundles an effective pricing strategy for your rental business, but they can also help streamline your inventory management and improve customer experience. These all create a positive impact on your revenue and bottom line as you save time, customers spend more, and they are much more likely to share their experience with others.
Increase average order value
One of the most significant impacts product bundles have is on your customers’ average order value. This metric is an excellent measure of the success and growth of your company. If customers rent bundles, they will spend more on average than those who rent one or two products, which increases your revenue and allows your business to grow steadily.
Save time on inventory management
When you rent out products individually, you likely have to run around your equipment room finding each product which takes a lot of time. Product packages allow you to pre-assemble kits with the products they contain. So, you just have to pick up a kit from the shelf and hand it to your customers. In addition, this helps you to stay more organized.
Improve customer experience
Product bundles help you to simplify the customer experience by reducing headaches from decision-making, helping customers to understand your products, and saving them money. If you can lay out your offering in a way that’s easy to understand, makes the value proposition clear, and limits choice, customers will have a more satisfying experience.
Why you should take advantage of product bundles in your rental strategy
Product bundles have been used for a long time with both retail and rental stores, and they are a trusted method for increasing order value. This is particularly important for the rental industry as it is still catching up with e-commerce in leveraging online bookings. As more and more rental businesses take a step into the digital world, competition grows.
It is more important than ever to make sure that customers understand your offering and can identify the value proposition. Product kits are an excellent way to simplify this process for customers while encouraging them to spend more. This allows you to grow your business while providing customers great value and service, which is essential for any business.
