In this story I will tell you how we switched from selling single products to selling only bundles and that boosted our sales by 200%.
EWM Interactive is a startup I co-founded with my friend Alex. It is a service that provides analyses for the financial markets based on the Elliott Wave Theory.
Few years ago we were fiddling with the idea to start providing paid subscription service. At that time we basically had a blog where we posted analyses for the financial markets.
We did few interviews and questionnaires and it turned out it was a good idea to provide people with the option to choose which instruments they want to subscribe for.
So this is how we structured our products:
1. We chose the 6 most popular instruments
2. We listed them separately in our website
3. We provided the users with the option to choose for how many weeks they want to subscribe for each of the instruments.
So the user flow was like this:
We received lots of feedback that our analyses are way more expensive than the competition. And that was a problem because we have lots of competition and people are not buying from us! At least not as much as we wanted.
Well the obvious solution here was just to lower the prices but we did not want to lower our profit per user so we had to come up with some other ideas.
Running this business model for a while provided us with a significant insights about our users.
The most important of which is that our users are usually following and trading 2 or 3 instruments but they are purchasing analsyses for one instrument every few weeks. In other words they purchase analyses for 1 instrument for 1 or 3 weeks and then for another instrument for 1 or 3 weeks.
That makes on average 1 short (1 or 3 weeks) subscription for 1 instrument per user.
So that got us thinking … Will our users see more value in buying a bundle of few instruments? If yes will it seem not that expensive and increase sales, especially the longer subscriptions (6 or 10 weeks)?
So here we arrived at the hypothesis:
We believe that if we make bundles of instruments our users will see more value and we will generate more sales and of the more expensive subscriptions.
Testing the hypothesis
With that hypothesis in mind we decided to test it out. But then we had 6 instruments. How do we bundle them? Which + which and how many in a bundle. We needed a way to test different scenarios.
We did few interviews with different traders as we wanted to know whether there was any pattern in choosing which instruments they trade. We found none.
We needed more extensive research. Then we started offering different bundles every week as a promotion. We tested lots of combinations of 2 and 3 instruments in a bundle, different prices and the results were more or less the same. So no significant pattern emerged. Also they did not sell as much as we expected.
Towards the end of the experiment, before we drop it as a feature, we decided to make one last bundle of 5 instruments. That made the difference! We tested it couple more times and it turns out the more instruments in a bundle the more it sells. No matter the price.
Later on we knew exactly what we had to do. We bundled all of the instruments in 4 different subscription packages – 1 week, 3 weeks, 6 weeks and 10 weeks.
We kept the pricing as well. We calculated that one user usually needs analyses for 2 instruments. But in the old model he will probably purchase few weeks a single instrument and then another few weeks another instrument. That makes on average 1 instrument per user.
So basically we calculated that if we kept the price of the whole bundle the same as the price of a single instrument from the old model that will not lower the profit per user and so it will seem to our returning users as a huge bargain.
So we did implemented it.
What happened was that even though the users needed analyses for 1 or 2 instruments they actually received 7 (we added one more). That way they saw a lot more value in the whole package. That lead to 200% increase in our profit.
As an additional advantage that simplified the user flow as it rendered the shopping cart page unnecessary as well as the separate pages for the separate products. That optimised the checkout experience and helped in increasing our conversion rate.