Chances are you’ve come across a bundled services offer from your friendly neighborhood phone or cable companies lately. It’s actually the primary slant of their marketing strategies, so you really can’t avoid them. The pitch is simple: buy more of the things we sell and you’ll get a better up-front discount.
It’s not a new idea by any means. The very concept of retailing is premised on bundling items that are related to one another and/or related to the needs of customers, so stores are bundles. We’ve been buying bundled products forever, really. High tech equipment. Insurance policies. Stock mutual funds are bundles. So are homes.
There’s a big difference between these historic bundled offers and those coming from the cable and phone companies these days, though. You could legitimately (if not always convincingly) argue that the slipcase accessory bundled with your tech gizmo device had some lasting value in terms of your user experience. Ditto for the insurance policies, which gave you a discount every year based on how many you owned. You bought a house because you liked the synergy of walking from one room to another.
But bundled cable and phone offers include no such lasting benefit. After your initial discount period is gone, your pricing usually goes up to the original levels. There’s no connection between your Internet or home phone experiences; one doesn’t make the other better or faster. Worse, you’re then immune to other discounts offered to new customers. And your provider has no intention of proactively telling you that your services can be changed, and certainly not lessened.
These bundles exist purely for the enrichment of the providers.
I’d say it’s so dumb but I fear that stupidity is the reason they’re so prevalent…our stupidity, in that consumers seem more than willing to fall for these bait-and-switch offers. I wonder if the cost/benefit analyses that support such an approach take into account the amount of effort/time spent dealing with customers who realize they’ve been had, or if consumers are somewhat wise to the ruse and make providers contend with a constant churn of losing and then trying to acquire new users. Maybe the math is just wrong?
The branding strategy certainly is.
And it doesn’t have to be that way. Here are a few thought-starters of how providers could make their bundled offerings actually offer greater value:
- Find synergies. There should be benefits to getting multiple services from providers beyond them offering a single web access point from which consumers can track how much they’re paying for said services. Maybe the synergies could be technical, or simple service-based (a special help line for victims of bundles would be a start). Could an additional service prompt an upgrade to an existing service (so I buy VOIP and my Internet connection gets upped a notch)? What about handing out more free wireless minutes as a reward for either buying and/or using add-on services. Minutes have as much inherent value as frequent flier miles. I’m stunned that they’re not used like that (make them expire. Duh).
- Make it pay. The discount for biting at a bundle offer shouldn’t have a time limit on it; in fact, it should get better over the years instead of leaving most users abused and ignored. Why couldn’t multi-year contracts get a little cheaper every twelve months? Maybe there could be usage discounts, so heavy TV watchers got a better deal? Conversely, why not incentivize more productive or healthy use of the services, so people could donate wireless minutes to charitable causes and thereby get a discount on their service? I guess my point here is to come up with ways to truly reward bundle customers over time, and not simply take them for granted.
- Base it on brand. I find it kind of interesting that my cable bundle has me attached to particular products — smartphones supported by services, a cable modem in my basement — and my only relationship with the brand is when the logo appears on the top of my monthly bill. I could care less what it is. I wonder if the very nature of the bundle arrangement could be shifted from products to business, so consumers subscribed to the brand (say, at different financial levels) and were thereby guaranteed not only the best products and services available at that price, but also automatic and regular updates/upgrades to those technical things. Make the relationship about the brand, and take responsibility for keeping it fresh and rewarding.
I’ve got to say that I don’t see any of this coming from the cable or phone companies any time soon. The exploitative approach to bundling must be working just fine, or be broken just enough to still support their marketing routines.
I think they’re leaving a lot of money…and brand loyalty…on the table.
