Bundling is an effective way for digital service providers to acquire new users. For telcos, it provides an opportunity to upsell to their subscribers and lure people over from competitors. Both sides win from bundling because service providers gain access to free marketing while telcos have an additional perk for pitching consumers to buy more telecommunications services.
However, the effects of bundling campaigns are limited. The bundling offer is available for a limited time and the discount on the digital service also has a fixed duration. In case of a 6-month campaign where users get discounted access for 12 months, promotional opportunities come to an end after 18 months.
While carrier billing continues to generate revenue indefinitely, bundling has a limited impact whereas the effort with negotiations, launching and promotions are similar. Telcos also need to put in additional effort in retaining the customers to achieve a positive ROI. This means a critical question has to be answered before starting bundling activities. What happens when the promotion ends?
Most major telcos already have bundling campaigns running: VOD offers are today active in 80+ countries and music streaming offers in 60+ countries. With these ongoing deals, it makes sense to plan follow-up campaigns for two reasons:
- The effort required for follow-up campaigns is significantly smaller since there is already a framework agreement in place and technical integration is done
- There are always more users to engage: not everyone participates in the first campaign, some churn out before converting and the competitors’ user base can be targeted
Assessing bundling campaigns should be based on key performance indicators (KPI-s) set up before the launch of the campaign. These indicators can be used to gain an understanding of whether the telco offering and digital service discount are aligned:
- % of existing, eligible subscriber base participating in the campaign
- % uplift of new subscribers acquired from competing telcos
- % of churn from eligible users before positive ROI is attained
If the bundle campaign meets or exceeds KPI-s, it’s worth running it with a similar setup again after some time. Underperforming KPI-s indicate that one of the two value propositions (telco product offered or discount on the digital content) is not aligned with customer expectations. Now both sides have several different options to consider:
- Telcos can change the product bundled with the digital service
- Telcos can change the target audience (e.g. prepaid, postpaid, corporate)
- Digital service providers can change the discount given (e.g. 3 months instead of 6 months)
- Digital service providers launch a bundle campaign with another telco
Because different digital services appeal to different audiences and the subscriber base of each telco is somewhat different, for both parties it’s more useful to run shorter-duration campaigns with a larger number of partners. This creates a faster feedback loop and helps better understand what customers want.
If initial campaign results with one telco are underwhelming, digital service providers can launch their second campaign with another telco and one year later, a different campaign can be attempted again with the first telco. The same goes for telcos, who can shuffle around different digital services and conduct multiple bundling campaigns in parallel (e.g by targeting prepaid users with one bundle and postpaid with another).
Digital content bundling with telcos is still quite young, which means best practices on how to go about it are not fully outlined. However, as with most other digital marketing activities, there is no reason to put all your eggs in one basket. Instead, the best results are achieved through testing, rapid iterations and trying out multiple channel partners in a scalable manner.
Fortumo’s Trident Bundling Platform gives digital service providers and telcos the capability to accelerate the launch of their bundle campaigns. The platform needs to be integrated only once, gives access to bundling with all other companies already connected to the platform and follow-up campaigns do not require any additional development. If you want to reduce the time it takes to get your bundle deals up and running, get in touch.