26th May 2020

How bundling is often bad value for the customer


Julian Hucker

I don’t know about you, but I’m always wary of pricing bundles. Whether you’re talking broadband and entertainment offers, a new car, or package holidays (though perhaps not at the moment!), it always seems attractive on the surface – but it’s never quite as good as you think.

The problem is that they are designed to offer the appearance of good value, but they are often priced in a deliberately confusing way so you can’t work out if it’s worthwhile or not.

Bundles are often introduced successfully when a market is new: think, video games consoles in the noughties or cheap getaways in the 80s. In fact, we used them very successfully in the early days of one of my previous companies, Esendex, until the financial crash in 2008 and businesses’ sudden focus on value for money. It helps people get over hesitancy during the purchase or not have to worry about which features they need, because someone has kindly done the hard work for them.

That’s how it works in theory, anyway.

The issue is that bundled pricing can be represented to show value at their limit. Think about those gym memberships that cost £2 per session (if you go every day!)

Ultimately, the problem is the lack of transparency.

And yes, there are examples where bundling is done well, when the elements in the bundle are complimentary and the value is clear. In my experience, this isn’t usually the case.

Bundling communications software and consultancy?

At Zing, we’re taking the long view. Our business is here to help organisations realise the promise of technology to put contact centres at the heart of customer engagement. And to do that we’re working with the company that makes the very best cloud communications platform: Twilio.

We could bundle Twilio’s services within our own solutions, particularly the more “out-of-the-box” services such as Zing Respond.

But we’d rather generate value from our slice of the value chain. We want to be recognised for the quality of our professional services and the solutions that we build. And we believe that we benefit from being associated with a leader such as Twilio, rather than hiding the association.

And as for bundles of pre-packaged (and priced) solutions? It’s another no from us, because it doesn’t take into account that every business has its own unique challenges.

So our strategy is to consciously unbundle services.

We work in partnership with the best companies in the business – and in cloud communications, we believe it’s Twilio.

And we do what we do best, which is to work out what the customer needs and how Twilio can be applied to their business problem. This often means working with other software and processes they already have to ensure everything is integrated properly.

What we are passionate about is absolute transparency with customers. This goes beyond pricing, but being clear about exactly what you offer and where your partners fit into the equation.

If this approach strikes a chord with you, do let me know in the comments below. And of course, if you are looking at how you can drive better engagement with your customers, we’d love to start a conversation about that too…

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