Product bundling to fight off competition in converging markets

As a service provider you have the opportunity to offer services individually or bundle them in an integrated package. Offering services individually might lead to higher margins, but bundled products give you a shot in adjacent markets while fighting off competitors trying to enter your market. In this game it is all about offering the right portfolio to keep current customers (retention) and recruit new ones (acquisition). SKIM offers you a research toolset to help you decide whether you should offer your services individually or bundled, and how to price them.

Determine which products to bundle at which price

Many markets are converging, competition increases, and with the same vigor you are tapping into someone else's customer base, they are tapping into yours. As you expand into adjacent categories you add new products and services to your portfolio by bundling them with your current products. But the main question is: What products and services to add to the mix - and how to price the bundle?

To make the right decisions, you need to understand the effects of bundling your products on the lifetime value of your current customer base, and on your ability to recruit new users. SKIM offers an efficient toolset of research solutions to determine which products and services to bundle, and to identify the optimal, discounted bundle price. By exploring the potential of various bundling scenarios and price strategies in a virtual market environment, we can provide actionable recommendations tailored to your situation.

"SKIM | Bundling: an integrated research approach that helps you decide whether it is more effective to offer services separately, or to bundle them against a discounted price."

Play around with various bundle options to optimize your portfolio

We offer one integrated research approach that helps you to decide whether it is more effective to offer services separately, or to bundle them against a discounted price. Our approach delivers a virtual customer base to freely explore the attractiveness of product and service bundles under numerous design and pricing scenarios. It helps to determine how much business the bundle would source from your original, unbundled products and service portfolio, and how much it would help you to attract new users, providing you with a complete market picture. Furthermore, it delivers insight into which services within the bundle drive its success and need to be communicated the most.

SKIM | Bundling supports two types of bundling decisions:

(both separately and combined in one product or service portfolio)

1. Complementary products and services

Combining equivalent services which are different but may make a good combination. For example, combine a telephone, internet and television services to create a "communication package"; a checking account and a credit card as "financial package" or a car and home insurance as "insurance package".

2. Accessory products or services

Offering "accessories" or add-ons to a core service or product in order to improve the value of the core service, or to be able to command a premium. Examples are an extended warranty offered with the purchase of durable equipment, or travel insurance offered with the purchase of a holiday package.

We have had great results implementing the toolset in telecoms, banking and insurances, and we are ready to apply it in hospitality, transport & logistics, and utility businesses.

Want to know more? Don't hesitate to give us a call or drop an email!