3 Benefits Of Unbundling Your Products & Services

Sometimes, raising prices is the fastest way to lose customers.

It depends on your target customers and their economic realities.

But if you’re looking for a way to increase your profits without increasing your prices, one of the effective ways you can use is through unbundling.

Unbundling is the breaking up of a product or service into smaller units of value.

This strategy is beneficial to small businesses in so many ways. Here are three (3) of such benefits:

1. BETTER SERVE NICHE CUSTOMERS

Instead of bundling several components together to offer more value to a wide group of customers, unbundling helps your business better serve a specific group of customers.

This way you can increase your customer satisfaction by giving them the option of choosing the specific product or service that they want instead of focusing them to pay for features and offers they don’t want.

2. INCREASE YOUR PROFITS

Unbundling your products or services can be effective to help you increase your sales.

This is especially the case where a previously bundled product or service offers components or services that the customers might not need and do not want to pay for – just to use a single component, hence do not make a purchase.

By unbundling, more customers will be willing to purchase products or pay for services that meet their exact needs, thereby increasing sales and profits.

Additionally, unbundling allows you to reach more niche customers since you have divided your offering into separate units that each niche finds valuable, thereby increasing your revenue.

3. COMPETITIVE ADVANTAGE

Unbundling is mostly used by businesses to enter a new market and attract customers from bigger competitors.

If a new entrant comes into the market with a good understanding of that pain point and offers those customers exactly what they want at a lower price than what they are currently paying for a bundle, there is a high likelihood that they will switch.

A good example of a bundle product is DSTV Subscription. Some subscribers pay the full monthly fee just to watch a few sports channels.

A competitor can use offer that customer segment just a few core sports channels, so they don’t pay for the other channels they don’t watch.

But before using the unbundling strategy, a small business owner has to collect feedback from the customer to understand the components that they find useful and want to pay for.

What do you think of this strategy?

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