Unbundling is something that can take your business from being an average run-of-the-mill business to a figurehead business – one that everyone in your industry is talking about but they can’t understand how you’re so successful.
So what is unbundling? Well, unbundling is a fancy term which simply means taking chunks out of your existing offering an offering them as individual products, usually at cost price.
Sounds too simple to make a big difference to your business, right? Wong. Let’s take a look at an example…
Suppose you sell websites to small and medium sized businesses that usually cost $5k – $15k. That’s a huge amount of money to most small business owners so you’re going to need to do a huge amount of work before they buy from you, showing them the results they could achieve and getting them to trust you before they’re going to hand over that kind of cash.
Let’s unbundle a few tasks this agency might perform as part of its core offering:
- create a logo
- create a website design
- create a new homepage
- create a landing page
Assume this agency advertises at trade shows, although this approach works for almost all advertising approaches. Imagine how well their current marketing is going if they’re standing at a trade show saying, “Free Consultation. Websites from just $5k”. How many websites do you think they’re going to sell at a trade show with perhaps 3,000 people. One, maybe two, if they’re lucky.
Now let’s run the numbers again with an unbundled offering. This time they offer a “Homepage Redesign for $25”. That’s the kind of money a small business owner might have in their wallet, it’s an extremely low barrier to entry, and it offers real benefit, so maybe 200 people sign up for this.
When you design the homepage you need to deliver really great value to the customer. You also need to demonstrate to them how great it would be to work with you. If you combine this really positive experience, with the fact that once someone buys from you they’re far more likely to buy from you in future, there’s a good chance you can convert a decent percentage of these customers into paying customers.
Back to the homepage design offer. The nice thing about this offer is it leaves them wanting more. Once they’ve seen the new homepage design, showing how great their new website could be, and now know how great you are to work with, its going to be much easier to upsell them to the core offer.
But even if you could only convert 2% over the next 3 months, that still gives you the following numbers:
From this example it should be really easy to see how unbundling can make a huge difference to your business.
But wait! It doesn’t stop there. What about the other 196 customers who didn’t buy a website. Well, they are now on your email list.
Now, most businesses would just email this group their monthly or weekly newsletter saying how great their websites are and that they start from just $5k, but if your prospects are being bombarded with the same message each week, they’re very quickly going to disengage.
You don’t need to do that, however, because you have lots of unbundled products you can offer. Each one a small subset of your core offer. This keeps your prospects engaged and ultimately makes it more likely they’ll buy from you further down the line.
That’s the power of unbundling. You don’t just win the short game, immediately following the trade show, you win the long game too!
If you’d like to know more then get in touch and I’ll send you the details.