Bango is pleased to announce a groundbreaking new whitepaper. Based on interviews with leading subscription executives and first-party research from Parks Associates, it reveals some of the pain points and success criteria to consider when bundling.
The subscription landscape is experiencing a seismic shift and changing almost daily. With digital services becoming increasingly popular, the average US household now subscribes to more than five streaming video subscription services. However, consumers are also experiencing subscription fatigue, overwhelmed by choice and different ways of buying subscriptions, making customer acquisition an ever-increasing challenge.
In this whitepaper, leading executives share their techniques and methods for achieving success when distributing and selling products through third parties. They discuss the latest bundling options, and how to avoid pain points and pitfalls when working with telcos and other resellers. You can access the full whitepaper here. In the meantime, let’s take a look at some crucial areas for achieving success.
Strategic collaboration
Partnerships have become a cornerstone of customer acquisition and retention strategies in the subscription industry. By forming alliances with telcos and other industry players, providers can access new markets, increase customer satisfaction, reduce churn and enhance differentiation from competitors. Study participants found that any partner can be effective if the content aligns well. Telcos are particularly suited due to their wide reach, existing billing relationships, significant marketing budgets, need for differentiation, and strong consumer trust. Executives from leading subscription companies across various sectors report significant success with these initiatives. Those in the subscription video and music markets highlighted that historically bundling has been a key factor driving 15-20% of their user acquisitions.
“The goal of bundling and partnerships is to optimize the monetization of content – get it on as many distribution channels as you can… These partnerships are good for business, they’re actively being pursued… [they are] revenue drivers and have built [our] customer base.”
Senior Product Lead, Streaming Video Service
Maximizing partnership returns
The success of bundling efforts depends on aligning content and establishing clear goals, with the most effective partnerships occurring when both parties understand their roles. Five key steps have been identified by leading subscription executives to ensure the success of these collaborations:
- Determine goals: Clearly define objectives for the partnership, whether it’s expanding into new markets, targeting specific demographics, or reducing churn. These goals will shape the overall strategy and success metrics.
- Identify prospective partners: Conduct thorough market research to find potential partners that align with your goals. Evaluate their audience, market reach, and partnership track record.
- Determine partnership approach: Choose the most suitable bundling approach based on your goals and resources. Align the strategy with your objectives, whether through hard bundles for maximum impact or softer approaches for greater efficiency.
- Set targets and penalties: Establish clear targets and incentives to ensure accountability and alignment with partnership goals. Define minimum revenue guarantees, subscriber targets, and marketing spend to mitigate risks and maximize returns.
- Stay the course: Continuously monitor and evaluate the partnership’s effectiveness, and be ready to pivot if necessary. Regular check-ins and data-driven analysis will help fine-tune your approach and optimize performance.
“So, you identify the brand, integrate it, figure out how to launch and make it discoverable to customers, and how the partner will maintain investment and not just make a [temporary] splash. It needs to be nurtured throughout; the user journey and commitment of a partner are both extremely strong components.”
CEO, Streaming Music Service
Mitigating risks and maximizing opportunities
While bundling partnerships offer immense potential, they also come with risks that need careful management. From financial considerations to brand perception, subscription providers must navigate potential pain points like misalignment between partners and inadequate incentives. Transparency, communication, and a deep understanding of partner priorities are crucial for successful collaboration, especially for international expansion.
“It’s in a situation where your brand is unknown and your partner isn’t invested that [partnerships fail]… You need to understand the motivation of the partner, it’s key to understanding the opportunity… If there’s no alignment or incentive on the partner’s end for the partnership to be successful, then you’re leaving it up to randomness.”
CEO, Streaming Music Service
Super Bundling: A game-changer in the subscription space
Among bundling strategies, ‘Super Bundling’ stands out as a compelling option for subscription providers aiming to maximize growth while minimizing risks. By leveraging partners’ billing relationships, Super Bundling reduces onboarding friction and enhances brand differentiation. Its flexibility and scalability make it an attractive option for brands of all sizes, offering larger bundle sizes, differentiated product offerings, and streamlined customer experiences.
“[Super Bundling] is a great idea… great option for consumers – consumers might have a preference for one service versus another but might get a bundle with both – two for the price of one. There are challenges here – legal compliance and integration can take longer. This is where consumers are heading, though. Aggregation to where you can take six to seven subscriptions and bring them together. Bundles are an easy choice for consumers, especially now that people are paying a hundred dollars or more [per month] for streaming video services.”
VP of Business Development, Streaming Video, Media Conglomerate
Bundling partnerships are a powerful tool for subscription providers looking to drive growth and enhance customer acquisition. By embracing strategic collaboration and leveraging innovative bundling approaches, providers can navigate the complexities of the modern market landscape and unlock new avenues for sustainable growth and success.
Discover all the secrets behind effective bundling strategies – download your copy of the whitepaper.