Did you know 97% of eCommerce traffic leaves without making purchases. This is a major problem for online stores across industries.
Is there a way to increase first-time visitor sales and repeat purchases?
There is! Bundled subscriptions can increase first-order conversion rates.
In this blog, we explore all about subscription bundles and how you can maximize conversions from it.
TL;DR
- 97% of eCommerce visitors leave without making purchases, making first order conversion rates a critical challenge.
- Bundled subscriptions is an effective strategy, combining multiple products into recurring deliveries, offering higher perceived value and convenience.
- Subscription bundles offer cost savings to customers, convenience, increase product discovery, provide predictable revenue to Shopify stores, and help with customer retention.
- Implementing an effective subscription bundle strategy for increasing first order conversion rates involves steps such as identifying products for bundles, designing the structure, deciding pricing for each tier, and optimizing checkout.
- Bundled subscriptions help increase first purchase conversion rates by combining discounted bundles with the convenience of recurring deliveries, leading to benefits for customers and Shopify brands.
What are bundled subscriptions?
Bundled subscriptions combine bundles and subscriptions. The bundle contains multiple products, which is sent as a recurring delivery to subscribers. Unlike single-product subscriptions, bundles offer many different products/ services that address different customer needs.
Offering bundled subscriptions is an effective strategy to boost conversions and increase repeat sales. It has a higher perceived value and is more convenient for customers.
Example
Why do bundled subscriptions work?
When you combine bundles and subscriptions, the potential for sales increases as it provides the benefits of both elements. Let’s understand all the key reasons why bundled subscriptions are effective for Shopify stores.
1. Convenience
With subscription bundles, customers have the convenience of receiving all products they need in one delivery. They do not have to wait or worry, nor do they have to keep ordering these products repeatedly.
2. Cost savings
Customers get discounts on bundles as opposed to when they buy single items separately. This price benefit motivates customers to buy more. Moreover, over time, they save a significant amount of money.
3. Product discovery
Bundled subscriptions also lead to new product discovery. You can add new items in the bundles, which customers may not have used before. Adding one new product with every delivery can help you introduce new products to customers.
4. Easy decision-making
When you offer a curated and personalized selection of products to customers, it reduces decision fatigue, making first-order conversion rates higher. Today’s customers prefer personalized recommendations and experiences such as bundled subscriptions.
5. Predictable revenue
Subscriptions create recurring revenue for your business. Moreover, bundled subscriptions increase average order value (AOV). These aspects create predictable and recurring revenue for your Shopify store.
6. Long-term customer relationships
When customers start experiencing benefits such as convenience, cost-savings, personalization, and a seamless buying journey over time, they feel more satisfied. This leads to less churn and more retention, leading to long-term customers.
Example: Beauty brand bundled subscription
Let’s understand more about how bundle subscriptions increase first-order conversion rates with an example of a beauty brand implementing this strategy.
A beauty brand created three bundle subscription tiers:
1. Basic: Cleanser + moisturizer ($25 per month)
2. Complete: Cleanser + moisturizer + serum + mask ($25 per month)
3. Premium: Cleanser + moisturizer + serum + mask + exclusive treatments ($50 per month)
The brand then integrated other elements into these bundle subscriptions. For instance, sharing educational content about skincare, offered seasonal variations in the subscriptions, created a community of subscribers, and ensured efficient customer support.
How to implement bundled subscriptions to increase first order conversion rates?
Subscription bundle strategies work well when done properly from the start. Here are the steps to follow to set up your Shopify bundle subscriptions.
Step 1. Identify bundling possibilities
Analyze your existing product catalog and customer data to identify bundling opportunities. For instance, find out which products are often bought together, which items complement your star products, and which products when bundled together can solve customers’ problems.
Apart from product pairing insights, understand customers shopping habits, analyze competitors’ bundle offering, gather information from customer support queries, and more. All this information can throw light on which products you could bundle together for subscriptions.
Example:
Step 2: Design your bundle structure
The next step is to design your bundled subscription strategy or structure. You will have to decide on factors such as the number of tiers, pricing for each tier, which products and how many will you include in each tier, etc. Let’s look at an example of a tiered bundle subscription strategy.
1. Entry-level bundle subscription
In this tier, you can offer 2 to 3 products, keep the lowest pricing to make it easy for customers to sign up and for you to increase first order conversion rates. In this tier, you could offer your most popular star products at a nominal discount rate, for example, 15%. Having your fast-selling products in this bundled subscription leads to higher conversions because customers already like those items.
2. Premium bundle
This bundle can include 4 to 5 bestsellers combined with complementary items. For instance, if your skincare products are top sellers, add a cosmetics product in the bundle. Offer the best value proposition in terms of discounts and savings, for example, 20% discount. You could also include one premium product in this bundle, to increase the potential of first order conversion rates.Â
3. Ultimate bundle
In the last tier, offer more than 6 or 7 products that are high-value and exclusive. This bundle should offer the highest discounts, for example, 30%. Moreover, include limited-edition or seasonal products in the bundle and appeal to your most engaged and loyal customers.
Step 3. Decide your pricing strategy
Design your pricing strategy in a way that it offers maximum value to customers but at the same time, does not eat into your profits. For instance, you could offer a 20% to 35% discount but your profit margin should still remain 40% to 50%.
Try a different percentage rate and figure which one is most lucrative. You could also consider subscription-based pricing. For example, an additional 5% off on weekly subscriptions.
Some other things to implement are psychological pricing tactics, such as charm pricing, show per-unit pricing compared to bundled pricing, offer multiple subscription period options, and create urgency with limited pricing, etc.
Step 4. Create multiple product-pairing strategies
There are many different ways in which you can bundle products. And while one pairing concept might work better than the other, it is always good to have a few different strategies. This ensures you cater to all potential clients and increase first order conversion rates.
For example, you can take the complementary approach. Combine coffee beans with a grinder and filters. Or pet food, treats, and supplements. Another way to bundle items is to take the problem-solving approach. Identify customer problems and bundle together all the products that can help solve that problem. For example, travel essentials bundles.
Step 5. Checkout optimization for bundled subscriptions
Checkout is the stage where there are the highest number of customer dropouts. To drive more first order conversion rates, optimize your checkout process. Let’s look at some ways of eCommerce conversion optimization for the checkout process on Shopify stores:
- Keep checkout minimal to a few steps, for example, 3 to 4 easy steps
- Provide the guest checkout option
- Display bundle savings prominently
- Display the benefits of subscriptions, example, free shipping, discounts, etc.
- Display trust signals, such as testimonials, badges, etc.
- Provide an easy cancellation option
- Optimize for mobile with a mobile-friendly checkout flow
Metrics to track for improving first order conversion rates
To consistently improve first purchase conversion rates, you have to put in continuous effort. Tracking and measuring key metrics can help you find gaps and double up on aspects that are working well. Here are some metrics to track.
1. Conversion rate
Measure conversion rates of bundles – the percentage of visitors who purchase bundles. You should also measure first-time buyer conversion rate, and cart abandonment rate. Measuring AOV of bundles and single products can also help you with conversion optimization.
2. Subscription metrics
Measure customer lifetime value (CLV) to track long-term value of subscribers. For measuring monthly revenue from bundled subscriptions, track monthly recurring revenue (MRR). By measuring time to second purchase, you can get a sense of how quickly first-time subscribers return for more.
3. Engagement metrics
Engagement metrics are an indicator of how much time and interest customers are giving to your bundled subscriptions. You can measure metrics such as email open rate, click-through rates of emails, customer satisfaction scores, and referral rates.
Wrapping up – how to improve first purchase conversion rates for your Shopify store?
Setting up a subscription bundles strategy can help increase first order conversions on your Shopify store. However, it has to be efficiently planned and managed.
For that, you need a smart app like Appstle. Appstle Subscriptions App and Appstle Bundles & Discounts can provide a comprehensive set of features required for a successful bundle subscription strategy.
