Pricing strategy · Bundling

When introducing premium services, bundle vs a la carte?

Reem

November 11th, 2015

Our mostly free platform is introducing premium services. Most places I've seen bundle one must-have service with a ton of marginal stuff to encourage people to buy.
However, since we're just trying these out for the first time, I was wondering if it would be more interesting to offer the new services a la carte and see which ones are most appealing.
We can always bundle later, and then we'll have the data on what's worth what to whom.
Has anyone experimented with that before? Any advice?

Rodrigo Vaca Product & Marketing

November 11th, 2015

Reem - when I joined Zoho, we had the following scenario:
Free Service + some bundles, plus then a bunch of a-la-carte offerings which you could buy on top of the free service or on top of the paid (bundled) services.

I eliminated the a-la-carte offerings and instead bundled smart. We reduced customer confusion when choosing services, eliminated the "nickel and dime" image and increased our ASP.

All thing being equal, I'll always choose bundle vs a-la-carte. If nothing else because it reduces complexity. Under all B2C scenarios and most B2B ones, pricing complexity is to be avoided.

Now, we already had a bunch of data that we could use to guide our bundling decisions. You don't have that data just yet. But I think you should know your customers well enough to know what things they are going to value out of your platform and what they won't.

My advice is: go with the bundling approach first.

Reem

November 12th, 2015

Rodrigo, thank you so much for your answer. That's exactly the type of info - based on experience- I was hoping to get.
So "pricing complexity is to be avoided." is the overriding priority.
Many thanks for taking the time to answer.