Service bundling strategy – 7 benefits for your small business

A service bundling strategy is a marketing tactic that involves offering multiple, complementary services as a package for a single price. You may wish to include other options in your packages such as information products or access via email or phone for questions to increase the value to the client. Usually the price is a discounted sum of the pieces.

But many small businesses avoid creating a service bundling strategy because they fear undercharging and losing money. But the trade-off between what you charge for a service and what your ideal client thinks it’s worth is a careful balancing act.

If you offer an à la carte menu of services, pricing them all separately, you can:

• Paralyze your prospects. Too many choices often results in no decision. Or they choose the least expensive option, shortchanging them of valuable services you offer.
• Make your services appear more expensive. Separate service offerings make people do the math. They will try to lower the cost by not choosing services that could benefit them.
• Add complexity in your business. It is harder to put systems together to simplify your business when there are a lot of items to sell.

Bundling is attractive to your prospects. They see your offering as a value-oriented purchase from a single source that solves their problem or addresses their need.

Why create a service bundling strategy?

Packaging and pricing your services for your target market is one of the more powerful marketing activities that you can do. Service bundles and pricing them based on value has several benefits:

Provides a tangible offering

When you sell your services on an hourly basis, you create objections from your ideal clients. They think only in terms of the cost and will question whether what you offer is worth it.

Creating packages for your services creates a product that can be evaluated on its merits. Seeing what you get in the package and what the package will cost them, enables people to more easily make a purchase decision.

Shifts the focus from cost to value

As a service business, people pay you for what you know and how you apply what you know to solve their problems. How your ideal clients perceive the value of your services is a critical component to being paid what you are worth.

Any service business can offer their services at an hourly rate. But when you do that, you encourage the customer to think in terms of hours, not value. If you charge $100 per hour, your prospects are already figuring out the cost to hire you. And when they are thinking “hours”, they are looking at how to minimize their cost. Getting them to think “value” is very difficult in this situation.

Makes it clear what you get

Many businesses provide a laundry list of services on their website. This puts the onus on your prospects to figure out what you offer and whether you can help them. Or best case, hope they contact you to provide a proposal that wraps your services into a nice package.

The lack of clarity encourages questions on why they need a particular service. Service bundles eliminate those questions and make it simpler for your prospects. Fewer decisions usually leads to an easier sale. Give people too many options and you risk losing them to someone who makes it easier for them.

Appeals to customers with varying budgets

We all like to land clients that can afford our highest priced services. But we also like to help small businesses succeed. Providing a choice of service packages in a range of prices can help people decide to work with you.

An entry-level package priced to appeal to someone with a limited budget, can help them start small. As your relationship grows and you help solve the problem they came to you to solve, they will naturally continue to work with you.

Makes it more difficult to compare your services to your competition

When you list individual services, it makes it easier for prospects to compare you to your competition. But when you create service bundles with value-added options, the comparisons are more difficult.

Your target audience is either looking to eliminate a pain point or striving for a positive outcome. Your service bundles should clearly project your value proposition and how how you help them achieve their goals. Being clear on why you can uniquely solve their problems makes you stand out from your competition. And when you have this advantage, comparing you to others is very difficult to do.

Eliminates the risk of working with you

Packaging your services turns selling individual tasks into selling results. In other words, here is what we are going to do, this is the intended result and this is how much it costs to do this. Now your prospect knows exactly what they will get and for how much.

Think about how most attorneys and CPAs charge for their services. They bill by the hour. Hourly charges are open ended and risky. As a client, you wonder how much their invoices will be each month. You hesitate to call them with questions for fear of racking up the cost of their services.

Attorneys and CPAs who provide fixed-cost packages for their services create a better relationship with their clients. Clients feel like they have an advocate they can speak with, eliminating the fear of higher charges. Services packages remove those psychological barriers that can prevent people from hiring you.

Simplifies your business model

Creating a service bundles has benefits to the back end of your business. It simplifies your business model because you now can create systems to do things more consistently.

• Proposals become turnkey and easier to create.
• Pricing is more consistent rather than customized for each client.
• Marketing is simplified because you can market the value of the bundle not the individual pieces.
• Average order value is increased.

Simplify your business with a service bundling strategy

The key to pricing and packaging is to understand your client’s needs and then create packaged solutions that are high value and low risk. Answer the following questions for each of your packages:

• Are your packages designed to help your ideal client overcome some critical need?
• Do they highlight the value of your unique differentiator?
• Have you included value-added benefits to make the decision to work with you really easy?
• Are they priced to fit within their budget while maximizing your revenue?

Be creative with your offerings and put together services that are value-packed and easy to buy. These fixed price packages will attract prospects and make it easier to show them the value you provide.

You have plans. We have ideas. Visit OldNational.com to learn more. 

 

This article was written by Debra Murphy from Business2Community and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.