By Julien Bouyssou
You often read about how much savings you can get by bundling your services. Most service providers actually make it look beneficial by offering special discounts for customers willing to enroll for several services. Yet when taking a closer look at it, bundling may not always be the most cost-effective option, and if it does, it surely comes with some “cons”.
Bundling is the practice of buying two or more services as a package from the same provider. It is often associated with the idea of promotional discounts, since providers use bundling deals as a powerful marketing tool. But who really benefits from this practice?
The “pros” of bundling your services
Peace of mind:
Bundling your services is a peace of mind: only one bill to pay and only one number to contact in case of technical problems. Most people hate the paperwork associated with paying their bills, and being on the phone with providers. Therefore choosing a single provider to buy multiple services from can definitely make your life easier.
Getting a better price is probably the main reason that makes people sign up for bundled services. In the telecommunications industry, the main providers (Comcast, AT&T, Verizon…) try to kill two birds with one stone by getting new customers to enroll into TV, phone and internet services all at once (the famous double and triple-play packages).
From a profitability standpoint, this is a very beneficial practice for the providers, who can maximize the number of customers through a single marketing campaign. It’s also a great way for the likes of Comcast to actually reduce their operating spending: a Triple-Play customer generates higher revenue but it only requires one contract and one bill to manage.
And this is why providers offer a better price for bundles than if you were buying these services individually.
Now it doesn’t always mean that this is the cheapest option…
The “cons” of bundling your services
It’s not always the cheapest option:
If bundle deals are generally the cheapest way to go for a given provider, it doesn’t mean that you could not a get a cheapest price overall by buying the same services individually from different providers.
For instance, depending on the area where you live, the Comcast XFinity Triple Play bundle (TV + Home Phone + Internet) can actually be more expensive than buying separately the AT&T U-Verse Internet, the Dish Smart Pack TV and the Comcast XFinity Voice phone services.
Besides, bundle deals are typically pretty competitive for the first year… until your promotional rate expires. But after twelve months, your bill is likely to increase between 40% and 80%. And the only reason why providers dare to increase your price so drastically is they know how complex it is for consumers to switch providers (it’s already a pain when you have one service, so imagine the nightmare of changing three services).
Loss of freedom:
When bundling your services, you accept to become dependent on one single provider. Hope for the best and prepare for the worst! Apart from being subject to price increases, you are now at the mercy of technical problems that could basically cut you off from the outside world. Indeed, think about the next Comcast service disruption: not only will you lose your internet signal but your TV will also be out-of-order.
Besides, keep in mind a service provider may provide the best internet speed but may offer a poor cable quality on the other hand.
Bundling your services may be a good option that many consumers have already opted for. But the common idea that bundle deals are always the cheapest way to go is not necessarily true. And even if it is true, you should always take into consideration the risks associated with relying on a single company to provide multiple services.
About Julien Bouyssou
Julien Bouyssou is the co-founder & CEO of BillXperts.com, a Tennessee-based company specialized in saving people money on their bills by negotiating with their service providers. You may contact him through his company’s website at https://www.billxperts.com/ or by email at firstname.lastname@example.org.