Customizing The Bundles
By Mike Masnick, Mon Feb 21 21:45:00 GMT 2005

Putting a bunch of services together isn't enough. Service providers who want to keep customers need to recognize that bundling is only the first step. More creative packaging needs to come next.

There's lots of talk these days about the the importance of bundles from various service providers. While it used to mainly focus on just getting providers to the land of the triple play (voice, video and data), over the last year, it's increasingly included mobile as well. While "mobile" doesn't necessarily fit with the other three (after all, mobile offers voice, video and data on its own), this does seem to be the general direction that companies are going.

The ones who are embracing such bundles are finding that it works wonders. While the per service fee may drop, the overall revenue per user increases, since subscribers just want one provider and, most importantly, the churn rate drops tremendously. Switching a single service from a single provider isn't that difficult if a better offer comes along. However, if a user needs to change all of the various services they get, it's suddenly a lot more difficult -- especially if the competition doesn't offer all of the same services.

However, as the technology buildout accelerates, it won't be long until more companies can offer comparable bundles -- and the reduction in churn may not be as strong. That's why some are realizing that it's not just about the "bundle" itself, but offering up a truly customized bundle that fits exactly what the subscriber needs. Right now, too many bundles are one size fits all -- as if just by the act of bundling the customers would come (and stay).

Service providers need to realize that, while price and convenience will draw in subscribers, matching them up with a package that fits exactly what they need, and takes advantage of the cross-service synergies is what's going to make them long term subscribers. This means giving more options to users, and encouraging services that play across the different services -- such as easily transferring calls from mobile to home phones or making sure that a home Internet connection can be used outside the home via wireless connections as well.

Putting together the pieces is just the first step. Making them really useful is what needs to come next.