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In Good Company: Bundling to the Right Consumers

Published: March 11, 2011 by Guest Contributor

In a previous post (“The Benefits of Bundling”), I discussed some of the advantages that can be derived from bundling services, including:

• Enhanced customer loyalty
• Simplified customer experience
• Time and money savings
• The ability to penetrate new markets
• Easier and less risky upselling path for larger share of wallet

Easier said than done
While the benefits may be many, making bundling work for you is no simple task. Formulating a plan to maximize upside and mitigate risk starts with a deep understanding of your customer’s ability to pay a bundled services bill. I recommend the following:

  • Leverage your current relationship (or your partner’s relationship) with the customer to understand past payment behavior. A long history of on-time payments is obviously a good sign, but it’s not the only attribute to consider.
  • Look at the customer’s credit score to get an idea of creditworthiness. By setting certain thresholds, you can amass a list of customers that would likely respond positively to a bundled offer and also be able to pay for it.
  • Incorporate broader data sets to improve business intelligence and obtain a more accurate assessment of each customer’s creditworthiness. Overlaying certain attributes on top of a base credit score can help you make more effective decisions about which customers to approach with a bundled offer. In fact, even a questionable credit group might receive a positive lift by applying the right attributers (see below). Alternatively you might be able to uncover the few members of an otherwise undesirable group that have the right attributes but that might otherwise have slipped under the radar.

Ultimately your goal is to determine the point at which a customer is most profitable to you versus the point at which paying the bundled bill becomes a problem. But that’s not the end of the story. Just because a customer can pay for a bundled offer doesn’t mean he or she will. Once you’ve determined the right customers to approach, your next task is to determine how to create the most appropriate mix of services to bundle, a topic that will be covered in an upcoming post. In the meantime, if there are specific topics in the realm of bundling you would like to see addressed, please be sure to comment on this post.