Originally published in February 2022. Last updated on December 19, 2024.
What if there was a way to boost your profits without having to expand your service list or put money into a marketing campaign?
Packaging popular services together is a great way to maximize the value of your invoices. It also offers additional value to customers by allowing them to choose the bundle that works best for their needs and budget.
Learn how to effectively add price bundling to your business to grow profit and better serve your clients in this guide.
What is price bundling?
Price bundling is when you offer related products and services in a package for a single price. The cost of a bundle is typically lower than if the client were to purchase or book each item separately.
Many industries use price bundling to package services together. Here are some bundle pricing examples:
- Lawn care, such as mowing, trimming, and fertilizing residential lawns
- Pressure washing, like siding and gutter cleaning
- House cleaning, like a standard cleaning with laundry or interior window cleaning
- Snow removal, such as plowing, snow blowing, or shoveling as well as salting or sanding walkways
For example, let’s say it would cost a pressure washing customer $400 to have their siding cleaned, and another $250 for their gutters as separate services, for a total of $650. If you offered them together as a price bundle, you might charge $500 for the whole job.
What are the different types of price bundling?
Bundling services is usually done in one of two ways:
- Bundled prices
- Tiered pricing
Bundled pricing is when you have a single package deal you offer, like mowing, trimming, and weeding for $50 per visit. If the customer were to book each service separately, it would be more expensive. For example, $40 for a mow and trim and another $30 for an hour of weeding.
Tiered pricing (or good, better, best pricing) is when you offer different levels of packages based on customer preference, needs, and budget. The most basic package comes with the lowest price tag, the middle option offers an upgraded service, and the most expensive package provides a premium experience.
For example, here’s what that could look like in lawn care:
- Package one (good): Mowing and trimming, $50 per visit
- Package two (better): Mowing, trimming, and weeding, $75 per visit
- Package three (best): Mowing, trimming, weeding, and fertilizer applications, $100 per visit
Think of tiered pricing as the next step in your bundle pricing strategy. Once you know what works and which services customers prefer to bundle, you can expand into good, better, best pricing to provide them with more options.
How to set prices for bundles
Before you go ahead with bundles, it’s important to know how to price them properly. Follow these steps to ensure you stay profitable while still offering value to your clients.
1. Understand your costs
First, you need to know exactly how much each service costs you to complete. This should already be worked into your service pricing to ensure you make money on every job.
When it comes to bundling, knowing your costs helps you understand how much you can discount your services as part of a package. For example, since you won’t have to travel to the same job site more than once, your fuel costs will decrease.
FREE TOOL: Service pricing calculator
2. Choose which services to bundle
Once you know the individual costs of each of your services, it’s time to determine which ones would work well in packages.
Start by considering which services clients book the most and which they book together. For example, if you’re a house cleaner, you may find that many of your customers request appliance cleaning or laundry on top of a regular service.
Your bundled offering should fit together naturally. For example, a customer who books your services for weekly house cleaning probably isn’t looking to add weekly carpet deep cleans.
Then, consider the price point of each service. A client who books a straightforward service likely doesn’t want to double their invoice by adding a costly service.
If someone has a thousand dollars house wash, we’re not going to bundle that with a $1,500 roof cleaning because that’s too intimidating of an upsell.
3. Add in your profit margin
Next, take the total costs for the service you want to bundle and add in your desired profit margin and markup you want for your packages.
The goal with bundles is to boost the perceived value of your services without significantly increasing costs. Since your expenses will likely be lower for packages, your profit margin may be higher for bundle pricing than for standalone services.
FREE TOOL: Profit margin calculator
4. Review competitors
Before you set any prices in stone, take a look at what your competitors are charging for similar bundles. That will give you an idea of what you should aim for to stay competitive. It can also show you which services work well together, how to position bundles, and what tiered pricing looks like in your industry.
5. Choose your discount
The discounted price you choose for your packages can make or break your price bundling strategy. If you charge too high, customers may not be interested in your bundles at all. Charge too low and you may not make enough money to cover costs.
Aim to strike a balance between providing added value at an attractive price to your clients and maximizing the value of your invoices.
For example, Christine Hodge of Clearview Washing recommends upselling packages in small increments to encourage more customers to take advantage of your price bundling offer.
READ MORE: Upselling tips from home service pros
A minimal $49 upsell for a percentage of your clients is going to offer great revenue for your company.
6. Promote your price bundling
When you have a bundle and price in mind, it’s time to spread the word. Update pricing on your website and in your marketing materials, and ensure team members are aware of the change so they can share the information with clients.
It’s also a good idea to promote price bundling through quoting software like Jobber. That way, you can include packages and add-ons right in your quotes, letting customers choose exactly what they want based on the job and their budget.
Price bundling pros and cons
Price bundling works well for a variety of industries and services, but it isn’t for everyone. Take a look at these pros and cons to see if it’s a good strategy for your business goals.
Price bundling pros
When done right, price bundling comes with many benefits, including:
1. Upselling opportunities
Price bundling is a natural way to upsell your services. It’s one of the best ways to increase the value of your invoices by encouraging customers to spend more without using pushy sales techniques.
2. Attracting new leads
Price bundling opens up an opportunity to attract potential customers by offering discount pricing right off the bat. Those looking to get the most value within a specific budget will be more attracted to businesses that have pre-built packages with upfront pricing.
3. Increasing profit
Price bundling doesn’t only increase the value of your invoices. The more clients who book larger jobs, the more your overall sales profit grows, making a big impact on your revenue. That additional cash can be used to hire new employees, expand your service area, upgrade your tools, or save for a rainy day.
4. Providing more value to customers
Customers want to feel like they’re getting the most bang for their buck. Price bundling helps to add value to your services by giving clients a discounted price for the work they need done. In turn, that builds customer loyalty and boosts customer satisfaction.
Price bundling cons
Despite its many benefits, price bundling also comes with some downsides. Before you add it to your pricing strategy, consider the following cons:
1. It can decrease profit
If you don’t plan your price bundling packages and strategy properly, it could cost you money. Since you’ll be offering multiple services at a lower price, it’s essential to calculate your costs and profit margin correctly, or you risk losing revenue.
Packages are also geared towards volume, so if only a handful of clients book your bundles, your profit could decrease instead of growing.
2. You may have to monitor and adjust prices
Price bundling works best for straightforward services with clear, predictable costs.
If your packages include products, materials, or supplies, you’ll need to keep an eye on your costs to ensure they don’t increase to the point where they eat into your profit. If they do, you’ll need to adjust your bundle pricing.
3. Customers may not want all the bells and whistles
Customers on strict budgets, or those who just want a simple, straightforward service may not be interested in price bundling. It’s important to consider who your typical customers are, which services they book, and how often they pair them together before you add packages to your pricing strategy.
Is price bundling right for your service business?
Whether price bundling is right for your service business depends on your industry, what you offer, and your target customers.
But when done right, it can be an effective way to grow profit, generate new leads, and provide additional value to your customers.
Using field service software like Jobber, you can track which services customers book most, include upsells and add-ons right in your quotes, and get insights and suggestions for how to build and improve your marketing strategy. That helps you develop, execute, and promote a price bundling strategy that works, so you don’t have to rely on guesswork.