Bundled Chicken Dinners

Take-out chicken deals show that bundling is very effective at increasing revenue. Unbundling can make sense but bundling should not be forgotten.

Bundled Chicken Dinners

Earlier today an email came in from a chain of family restaurants with this header:




Everything about it suggests something special... "Black Friday" evokes the idea of big discounts, as does the word "Deals". Throwing in "Top 4" uses social proof to reinforce that these really are great deals, and "Only 4 Days Left" uses the scarcity principle. The entire thing is very well crafted to suggest really great savings and prompt action.

Here are the details on one of the offers:






Take a look at the two offers. The difference is that the one on the bottom adds two cans of pop for an extra $3.00. It must be a good deal – after all this is one of the "Top 4 Black Friday Deals" and there are only four days left!

The beverage section of the online menu appears below:




The drinks in the Black Friday special are $1.50 each. The regular price is just slightly more, at $1.59. There are very little savings there. You would be better off buying the $15.99 special with no drinks and then purchasing the 4 Pack separately. It would cost $1.00 more but you would get twice as much soda, at just $1.00 per can instead of $1.50.

Why promote a special that really isn't that special? Because most people won't look that closely. The person that wants dinner and side to go with it gravitates towards that offer without looking at it.

Bundling is very, very powerful. The trend in much of retail and the flower business in particular has been to unbundle everything but a lot of consumers love bundles. They'll spend more when presented with a bundle option, even if it doesn't provide any special value.

There is another little twist to this offer. Only the $18.99 offer is available for delivery. If you want delivery you have to spend an extra $3.00, on a very high margin item that probably generates an extra $2 in profit. That $2.00 helps subsidize the low $2.95 delivery fee.