Many companies offer multiple complementary products and services as a part of a bundle, which can increase the average deal size by leveraging economies of scale.
What is Bundle Pricing?
Bundle pricing is a business sales strategy that involves offering two or more related products and services as a package at a discounted price.
Bundle pricing helps businesses boost profitability while delivering greater value to customers. By combining multiple products or services into a single package, companies can offer an attractive price that encourages larger purchases, increases the average deal size, and simplifies the buying process.
Customers benefit from the overall cost savings of buying a bundle rather than individual items, making the offer more appealing. At the same time, businesses drive higher sales volumes and improve revenue performance, even when individual product prices are discounted, resulting in stronger profit margins and long-term growth.
Synonyms
- Price Bundling Strategy
- Product-Bundle Pricing
- Bundle Product Pricing
Who Uses Bundle Pricing?
Several business models use some form of bundle pricing in their overall pricing strategy:
- Business-to-Business (B2B): Businesses that sell products and services to other businesses often bundle items that fit into their customers’ overall business processes. This could be a software system, hardware and installation services, or other related products.
- Business-to-Consumer (B2C): Retailers often bundle complementary items to increase the overall value of the purchase for customers. For example, pairing a phone with accessories such as a case or a charger.
- Software-as-a-Service (SaaS): Software companies that offer subscription-based services often bundle additional features with their core products. This could be extra storage or the ability to access certain features that are only included in premium versions of the product.
- Hospitality: Hotels and resorts often bundle services such as spa treatments, meals, and activities into package deals. Restaurants and fast-food chains may also bundle meals or snacks into a single offer.
- Service Providers: Cloud services, hosted IT services, and other service providers often bundle their offerings into packages with varying levels of access or features. Internet, cable, and cell phone providers use the same strategy to offer different combinations of services and features.
Because it increases average order value, most businesses adopt some form of this strategy to offer customers a package deal that meets their needs while also driving profits for the company.
Examples of Bundle Product Pricing in B2B
While the concept of selling complementary products is fairly straightforward, SaaS and service-based companies use several types of bundle pricing strategies to increase customer value and simplify purchasing.
Companies with digital pricing models (e.g., travel, hospitality, and other algorithmic-based models) can also offer custom bundles based on user preferences and past purchases.
Discount Bundles
This is the most common type of bundle pricing, where a company offers customers a reduced price for purchasing multiple services or licenses together.
Example: A SaaS company might offer a 20% discount when customers subscribe to its full suite of sales tools (CRM, CPQ, and Billing) instead of purchasing each module separately. Similarly, a managed services provider (MSP) could offer a bundled discount for clients that combine network monitoring, cybersecurity, and data backup services under a single monthly contract.
Accessory Bundles
Accessory bundles encourage customers to purchase add-on services or features that enhance the value of the core product.
Example: A software company could bundle onboarding, implementation, or customer success training services with its primary platform license. An IT services firm might package cloud migration with ongoing support and system monitoring, ensuring customers have everything they need to operate effectively post-deployment.
Product Family Bundles
Product family bundles combine products or services within the same portfolio that naturally complement each other.
Example: A SaaS provider like Microsoft or Adobe offers product family bundles (e.g., Microsoft 365 or Adobe Creative Cloud) where users gain access to multiple related applications under one subscription. A professional services firm could offer a “digital transformation package” that includes IT strategy consulting, application development, and infrastructure optimization.
Custom Bundles
Custom or mixed bundles are tailored packages designed to meet the unique needs of specific customers or market segments. These bundles are common in enterprise sales, where requirements vary significantly across clients.
Example: A managed services company might build a custom bundle for a healthcare client that includes HIPAA-compliant data storage, cybersecurity monitoring, and 24/7 helpdesk support. Similarly, a SaaS company could allow enterprise clients to configure their own package from a menu of modules, such as analytics, API access, and advanced automation, priced dynamically based on usage or user count.
In many cases, companies with digital pricing models use algorithms to create personalized bundle offers. For instance, a SaaS platform might analyze a customer’s feature usage and recommend a tailored package that includes additional modules or higher-tier support to improve value and retention.
Benefits of Bundling Products and Services
Effective bundle pricing strategies help SaaS, IT services, and managed services companies create more value for customers while maximizing revenue opportunities. Bundling simplifies purchasing decisions, increases average deal size, and improves customer retention by offering integrated solutions that address multiple pain points at once. Whether through predefined product suites or dynamic, usage-based bundles, these strategies enable businesses to better align pricing with customer needs and strengthen long-term relationships.
Here are four ways bundle pricing is advantageous to businesses:
Optimize Pricing
Price optimization is a pricing strategy that maximizes profits while ensuring customers will actually buy a business’s products and services.
Bundle pricing helps businesses achieve this by allowing them to adjust prices based on customer preferences, demographics, and other factors. This way, businesses can offer customers the best deals without sacrificing profits.
Increase Sales Volume
When customers know they’re getting a good deal, it’s easy for them to make purchase decisions.
Customers can save significantly by purchasing a bundle of items, especially when they require all its components. It is typically more cost-effective to buy products in a bundle than individually, making bundling an attractive option for buyers.
Easier to Market
Rather than sell each product or feature individually, organizations can develop marketing strategies around the bundles they offer. This makes it easier for businesses to target potential customers, simplify their sales process, and ensure that their message resonates with each market segment.
Simplify the Buying Experience
To achieve optimal sales, it’s important to ensure that customers have a smooth, hassle-free buying experience. With bundle pricing, customers can view all the products or services in one package and make an informed decision on what they need.
This simplifies the buying process and allows customers to purchase the best bundle for their needs easily, without searching for individual items.
Disadvantages of Bundle Pricing
Of course, bundle pricing isn’t perfect and can have certain drawbacks. To create an operation that effectively leverages bundle pricing, businesses need to take several factors into consideration, such as their customers’ needs and market conditions.
Here are the primary disadvantages of bundle pricing:
Unable to Tailor Offers
Bundle pricing has the potential to limit a business’s ability to tailor offers based on customer preferences or market conditions, as the nature of bundles has a fixed range of features.
Companies can navigate this by creating multiple bundles and offering them at different prices. However, this can be a time-consuming process that requires businesses to invest in market research or utilize customer data to determine the best offers for each segment.
Revenue Optimization
One of the biggest challenges businesses face with this strategy is finding the right balance between offering attractive packages and making a good profit.
Some customers may be willing to pay more for certain features or components of the bundle, but are restricted by the bundled pricing options.
This can lead to businesses leaving money on the table, as they cannot optimize revenue from those more profitable sales opportunities.
The Paradox of Choice
The paradox of choice is a psychological phenomenon that describes how too many options can lead to confusion and indecision. When customers are presented with bundles that offer the same features, they may find it hard to decide which one is best for them.
This leads to fewer sales and unsatisfied customers, as they may be unable to select the product that best meets their needs.
Too Few or Too Many Features
Some customers may also be hesitant to purchase a bundle of products they don’t necessarily need or want. They may take their business elsewhere if they feel they will overspend and underuse.
On the other hand, bundling too few features may leave customers unsatisfied, feeling they are missing out on features that could have been included in the package.
Businesses need to create balanced bundles with enough features for customers to be satisfied and willing to make a purchase decision.
Types of Bundle Pricing Strategies
There are two main types of pricing strategies for bundles:
Pure Bundling Strategy
In a pure bundling strategy, customers must purchase all the items in a bundle as one package at an additional cost. This pricing strategy is popular among companies offering highly integrated and compatible services or products.
Joint Bundling
A subcategory of pure bundling, joint bundling is where customers must either purchase all the items in the bundle or none of them at all. This pricing strategy allows companies to discount their products more than pure bundling, as it’s a way for businesses to save costs and make up revenue.
Leader Bundling
Leader bundling is a popular strategy in the retail sector, where customers can purchase one valuable item and receive items of lesser value along with it to make it seem more valuable. Another subset of pure bundling, leader bundling allows companies to be creative with their pricing strategy and highlight the most important product in a bundle.
Mixed Bundling Strategy
Mixed bundling involves offering products from different categories in a single bundle at a discounted price. Sellers can be flexible about which products are included in a bundle, allowing them to account for customer preferences and market conditions.
This pricing strategy also allows businesses to showcase the features of multiple products at once, as customers can view them without making individual purchases.
How CPQ Executes Price Bundling Across Industries
Price bundling can be complex, especially for businesses managing a large catalog of products and services or selling into multiple verticals. CPQ software simplifies this process by enabling sales teams to configure, price, and quote bundled offerings accurately and efficiently, while aligning with customer needs and revenue goals.
CPQ platforms support bundle pricing through dynamic product configurations and rules-based logic. This allows companies to define which products or services can be bundled together, apply conditional discounts automatically, and enforce pricing policies without manual intervention or lengthy approvals.
CPQ Price Bundling Examples
- SaaS companies can use CPQ to bundle core software licenses with onboarding, training, and premium support services. Sales reps can easily tailor bundles to different customer segments, like startups versus enterprises, ensuring each quote reflects the right price and value proposition.
- Telecommunications providers often sell multi-layered packages that combine hardware (e.g., phones, routers), service plans, and upgrades. CPQ ensures accurate bundling and tiered pricing for customer plans, minimizing quoting errors and reducing time to close.
- Managed Service Providers (MSPs) can create bundles that include IT monitoring, cybersecurity solutions, and helpdesk support. CPQ helps automate volume-based or contract-length discounts, streamlining sales of service packages tailored to client needs.
- Manufacturers frequently offer equipment bundles that include installation, maintenance, and spare parts. CPQ systems help configure these complex offerings based on product dependencies, regional pricing, and inventory levels, ensuring compliance and profitability.
Product bundling requires businesses to think strategically about what products they should include in their bundles. CPQ bundles allow sellers to pick and choose which products should be included and reduce quoting errors that result from complex sales.
Leveraging CPQ to manage bundle pricing enables companies to gain more control over how products and services are packaged and sold. Sales teams can build accurate, personalized bundles in real time, reduce pricing errors, and accelerate quote approvals and revenue.
People Also Ask
What is a characteristic of bundle pricing?
A key characteristic of bundle pricing is that it combines multiple products or services into a single package offered at a lower total price than if each item were purchased separately. This pricing approach increases perceived value for the customer, encourages larger purchases, and helps businesses boost sales volume and streamline the buying experience.
How do I decide which products to bundle?
Look at recent sales and marketing data to see which products and services customers often buy together. You can also use customer feedback to help you decide which products should be included in a bundle. Some businesses also have success being flexible with their bundling strategies and allowing customers to customize their bundles.
Why is a bundle pricing strategy good for your revenue?
Bundle pricing is a great way to increase sales and optimize your revenue. Customers are likely to purchase more when they see a good value proposition, and a bundle price is often seen as a better deal. Bundles also make it easier for customers to make their decision quickly and save time.
How does bundle pricing affect competitors?
Bundle pricing can create a competitive advantage by making it harder for competitors to match the overall value of a bundled offer. When a company packages complementary products or services at a discounted combined price, it not only appeals more to cost-conscious buyers but also differentiates itself in the market. Competitors selling standalone products may struggle to compete on both price and perceived value, potentially losing market share if they cannot offer a comparable bundle.