Subscription bundling, the act of charging one subscription service to the bill of another, is a relatively familiar concept today. You have mostly likely been offered the opportunity to add a Netflix or Apple TV+ subscription to your Vodafone or EE phone bill. The “bundling” label comes from the idea that you typically commit to a first-party service from the business offering the add-on subscription. Bango has been enabling subscription bundling for telcos and other payment providers since 2016.
However, the subscription bundling market is evolving.
One major change is the sheer number of subscription services in the market. In 2016, you likely had one or two subscription services, probably Netflix and Amazon Prime. Today, there is a subscription for almost everything, some of the more niche ones include subscriptions for; Kitchen Roll, Razor Blades, Protein Bars, Cheese and that’s on top of considering the more mainstream subscriptions for TV, Music, Books, Gaming, Clothes, Food, Home Security and more.
This is a lot for consumers to keep track of. A recent Bango survey found more than 80% of consumers are crying out for a better way to manage their services.
The other major change is the general economic climate. Consumers are under more pressure now to tighten their belts than they have been in decades. Meanwhile, merchants are facing more competition and are struggling to maintain, let alone grow, their user base.
Enter Super Bundling. Super Bundling is changing the way subscription services are found, managed and paid for.
What is it? Super Bundling is the ability to bundle not just one or two subscription services together but 10s and 10s of services together.
Bango is enabling this functionality for consumer service providers, like telcos, and merchants all over the world through its Digital Vending Machine (DVM) technology.
Why is it relevant?
It addresses the problems faced by merchants, service providers (like telcos) and consumers while providing each with additional benefits.
- The Merchant
As already discussed, the merchant’s problem is trying to maintain and grow user acquisition rates. In an environment where there is more competition than ever before and consumers are hyper-focused on cutting costs, getting consumers to spend their money with you is tough. Keeping hold of those consumers for the long term is even tougher.
By allowing their services to be part of a Superbundle, merchants can instantly tap into a new customer base and the direct marketing channel of the Digital Vending Machine operator (most often, a telco). Bundled services are also proven to have lower churn rates, meaning merchants keep customers for longer.
- The Telco (or other service provider – energy firms, banks etc).
In industries like telco, energy or consumer banking, it is extremely hard to differentiate your service. Using telcos as the example, gone are the days when a telco could offer more minutes, more texts or more data to draw customers in. For a short while 5G served as a differentiator but now, 5G, along with unlimited calls, texts and data is what consumers expect for their money. So, when everyone is offering the same thing, how do you set yourself apart and once you have those consumers, how do you keep them?
Subscription services offer a great way to differentiate. They provide interesting, exciting and innovative content consumers want access to. By bundling these services with their own first party services, the telco offering is instantly more appealing. What’s more, the telco is often offering these services on a free trial or discounted basis, an even more compelling proposition for consumers. Bundling also makes for a sticker customer because if your telco is providing you with Netflix, Duolingo and Disney+, you are likely to think again if you were considering switching to another telco.
- The Consumer
The consumer problem is two-fold, firstly it is becoming increasingly hard to manage and keep track of the number of subscription services we are all acquiring. Do you know how many you have and what they cost you each month?
By Super Bundling, telcos can offer their customers a single portal to access and manage all their subscription services. They can also include additional features & benefits like suspend and resume, giving consumers the ability to pause their subscription services should they wish to.
Second, consumers need better value for money. The cost-of-living crisis is impacting everyone and consumers across the globe are looking for ways to make their funds go further.
Telcos frequently subsidize the merchant services included in Superbundles to make their offers more compelling to consumers. This means customers can often find the best value for money on their subscription services by accessing them via their telco.
In 2021, just 6% of subscription services were sold via a service provider like a telco. By 2025, this is expected to increase to 25% and Bango is powering the growth of this trend. Bango already enables major telcos including Verizon, T-Mobile US, BT and Optus to offer superbundles to their customers and is quickly gaining market share.
