The Benefits of Bundling Your Telecommunication Services

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Dollarphotoclub_51474809Bundling is a growing trend amongst a wide range of vendors, including telecommunications providers. It is a practice that has benefits for both consumers and for vendors, and this article takes a brief look at what those benefits are for both individuals and businesses.

What is bundling?

Bundling is a form of marketing where a vendor puts two or more products or services together in a package and sells them for one discounted price. The products or services may or may not be related, but bundling usually includes items that would appeal to a specific group of customers. In the case of telecommunications, telephony and broadband are often bundled together in this way.

Consumer benefits of bundling

Bundled packages targeted at individual consumers can be a very attractive proposition and they usually offer two main benefits:

  • Price – This is often the primary motivation for purchasing a bundle rather than individual items. The items cost more when purchased separately than they do in a bundle, so the consumer is saving money by buying them together.
  • Convenience – By purchasing all of their telecommunication services from one provider, the consumer is benefitting by only having to pay one bill each month and only having to deal with one company for support in the event of a problem.

Business benefits of bundling

SMEs can also benefit from telecommunications bundling. In an economic environment where everything is about cutting costs and improving efficiency, bundled communications can be particularly attractive.

Ways in which businesses can benefit from bundling include:

  • Price – As with individual consumers, price is high on the list for enterprise as well. Managers who can obtain their company’s telecommunication services for less are looked upon with favour and small businesses are always looking for ways to do more with less money.
  • Efficiency – With all their services supplied through one provider, businesses are able to reduce their administration fees. They only pay one bill and have only one point of contact for everything related to their telecommunications.
  • Accountability – If something goes wrong at any stage, businesses would prefer to have only one vendor to hold accountable. When several providers are involved, it can be difficult to coordinate effective solutions and get problems fixed in a timely manner.

Vendor benefits of bundling

Vendors also obviously benefit from bundling, or else they wouldn’t do it. They stand to gain from the practice in several key ways.

  • By cross-selling products or services, they are able to sell more of each and to make more profit as a result.
  • They usually require the customer to sign up to a plan in order to receive the discounted bundle, and in doing so they are retaining their customers for longer and building customer loyalty.
  • Bundling gives the vendor the opportunity to introduce their customers to other products and services that they might not be familiar with or might not purchase from them otherwise.
  • Just as their business customers benefit from less administration, so vendors have less billing to do with bundled packages and fewer payments to process.
  • When vendors partner with other providers from different fields to offer bundled packages, they then have the opportunity to expose their products or services to brand new markets.

Examples of bundling

A basic example of bundling is a McDonalds Happy Meal. The fast food chain has been successfully bundling its meals for years and offers incentives to customers to upgrade all the time. Consumers are happy to do so, because the way they see it is they would be purchasing the items in the bundle individually anyway, so why not buy a package and get them all for less?

In telecommunications, a good example of a bundle that targets VoIP and broadband users is Engin’s Super Saver Bundle, which includes unlimited broadband, all local and national calls, all calls to Australian mobiles plus a bonus modem and VoIP box, all for just $65.90 a month.

While it requires a customer to sign up to a two-year plan in order to receive all this, for many VoIP and broadband users this would not be a problem, given that all their needs are being met by one provider and for one low price.

Future benefits of bundling

content-(2)Bundling is becoming increasingly popular as a marketing strategy, both with vendors and with consumers. From a Happy Meal at McDonalds to a suite of tools in Microsoft Office, bundling is here to stay and can only get bigger and more sophisticated with time.

In the telecommunications sphere, bundling is expected to increase in scope from just packaging telephony and broadband together to including services such as mobile VoIP, WiFi and even hosted web and email.

Possible bundling pitfalls

While it’s clear that bundling benefits everyone in a variety of different ways, it should be pointed out that there can be a downside to bundling if the consumer doesn’t do their homework before purchasing.

Price should not be the one and only consideration when looking at bundles, as telecommunications, for instance, need to be tailored to your individual or business needs. If a bundle includes cheap international call rates and you rarely make international calls, then purchasing that bundle means you are paying for something you will hardly use.

You need to make sure that the services being offered are not only cheap, but that they suit your needs as well, by offering enough bandwidth, speed, features, scalability and support to justify buying them together rather than individually.

Fortunately, the upside of this is that, with so much bundling going on these days, you have plenty of scope to be able to shop around and find that perfect bundle for all your telecommunication needs.

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