It probably seems counterintuitive, but the best way to bundle products together is actually to bundle unrelated, not related, products together. Before explaining why this is, let’s take a moment to have a quick refresher on what bundling is. Bundling is the practice of selling two or more products or services as a single unit for a discounted price. A bundle is attractive to consumers because a consumer wants to receive value, and the discount associated with receiving multiple products helps consumers feel like they’re getting decent value.
It’s recently become more clear that bundling utilitarian and hedonic items together often receives better sales results than bundling complimentary items together. A utilitarian item is something that provides clear value (fulfills a basic need or accomplish a practical task), while a hedonic item provides less apparent usefulness (more for pleasure and fun). This means that the next time you’re creating a bundle, you should be combining unrelated hedonic and utilitarian items together.
To increase the results of your utilitarian and hedonic bundle, the discount should be framed in a way that makes it look like the discount is more focused on the hedonic good. This is important to do because “hedonic items are associated with greater guilt and therefore require more justification. The purchase of hedonic items can hence be enhanced by reducing the guilt associated with their purchase.” When it appears that the bulk of the discount is being applied to the hedonic item, you’re giving the consumer guilt-reducing justification for making the purchase. The “discount on the hedonic component would make it easier to justify the purchase of the bundle.”
It is also possible that people are more likely to be familiar with utilitarian items than with hedonic items, so the discount on the less familiar part of the bundle is useful for introducing a new product to consumers, which in-turn increases bundle sales.
All of these notions combined allows us to predict that framing the discount as a savings on the total purchase would be far less effective in increasing the sales of bundles when compared to offering the discount on the hedonic portion of the bundle.
“Framing the discount on the hedonic item provides a justification required to reduce the guilt associated with the purchase of such items. However, since no such guilt is associated with the purchase of utilitarian items, framing the discount on utilitarian component of the bundle has little additional impact. In support of our explanation, we show that the anticipated guilt in a hedonic purchase mediates the effect of discount framing on the likelihood of bundle purchase.”
We can continue this thought and recognize that, “discounting a hedonic item in heterogeneous bundles can justify purchase of the whole bundle, discounting the same hedonic item may not serve as a sufficient justification when the second item in the bundle is also a guilt-inducing hedonic product.” It’s important to combine a utilitarian item with a hedonic item, and not two hedonic items together.
Next time you’re creating a bundle, you should combine unrelated items together, the items should be a mixture of utilitarian and hedonic goods or services, and you should remember to frame the discount with a focus on the hedonic item.
Things to remember:
- Unrelated items bundle best together (ex: a textbook and a school sweatshirt).
- Frame the discount on the hedonic item over utilitarian item (ex: sweatshirt appears discounted, not the textbook).
- Combing utilitarian and hedonic items together greatly increases purchase rates (useful+pleasure).
- Hedonic discounts are best because hedonic purchases involve more guilt in the purchase, and a discount helps the consumer justify the purchase.
- Bundles can’t work without discounts.