Every month when my cable TV bill arrives, I go through the same love-hate routine consisting of swearing under my breath at Comcast and going to the ATT site to see if, by some stroke of luck, I was now able to get U-Verse, the ATT version of cable TV that is not a satellite dish. Every month, disappointment so I “punish” Comcast by refusing to switch my DSL internet service to cable. And I resist switching to VOIP service because—well I don’t really know why except I just didn’t want to “reward” Comcast for overcharging me on cable TV by giving them more business. I guess I could have switched to Skype or Vonage or some other VOIP provider, but I didn’t.
But then something happened. NO! It was not a miracle of U-Verse proportions! It was called Comcast customer service—and they were calling me! No muzak, no waiting in the online queue—it was a real person asking if I had ever considered bundling my services. I resisted the temptation to tell her, “yes I have but it will be a cold day in hell before I will give the cable company one more dollar.”
Seduction, thy name is Bundling
The Comcast representative asks me if I take DSL service. Yes from ATT, I said smugly. Do you know our cable internet is 5 times faster? We deliver a 22 mbps service for about the same price as you are paying for ATT’s 5 mbps service. The need for SPEED raced through my head—oh she is good! She knows my exact weakness.
Do you have your wireless service from ATT, she asked. No, Sprint. “Oh, so you have not bundled your services with ATT then, have you Mr. Hunt. My mind raced as my face reddened—she knows I am a sucker now—I have not bundled! How embarrassing!
“Well”, she said sweetly, “Comcast does not offer wireless service”, (you got that right I muttered under my breath—you want to enslave me to that cable!) “but I think I can put together a bundle for you that would save you money, and get you that faster internet service I just know you will like.”
Well how could I say no to that kind of offer—Bundle Me!
Bundling is a technique of packaging services at attractive rates to grow wallet share from customers by offering a very sticky collection of services as part of the bundle at a much better value than if purchased separately. It is not a new marketing strategy, but it is still an effective one. It reduces both customer acquisition costs and churn, increases revenue, spreads fixed costs over a growing revenue base, and takes market share from competitors.
The bundle I selected from Comcast included cable TV, high speed internet and VOIP phone services. The total monthly price on a one year promotional rate is, not including the one time installation charges, about $25 per month MORE than I am paying Comcast today for cable TV alone, but my net savings from dropping internet, landline and long distance services from ATT is about $75 per month overall. This is the nightmare scenario for ATT—the cascading erosion of landline.
Well good for you, you say, we know you just switched because you got Comcast to throw in that Sports Channel package in the bundle when your wife told you “we” didn’t need to subscribe to that service. I categorically take the 5th on that!
Besides (see I have practiced how to explain this wizardry to my spouse who is going to give me so much crap for all the times I have groused about Comcast once she discovers I bundled with them! I can see that look on her face now. You know that look—it’s the “you think you are so smart don’t you” look I have seen many times in 35 yrs of marriage. Usually, when I am absolutely guilty of what she suspects I have done. But I confess, I mean digress, again.
Bundling is the kind of marketing technique that will likely savage many established utility companies when customers gain real choice in the future. Because the future of energy distribution is NOT about energy, it is about convenience, security, reliability, and the value perceived from a quality package of services that make it easy to use.
Comcast might even be such a threat to PG&E, ConEd, FP&L or your local utility. Imagine, sitting in your easy chair channel surfing and up pops the Comcast energy channel showing me the real time energy consumption in my house. “OMG, I didn’t know that old beer refrigerator in the garage used so much energy. So I discretely use my “clicker” to set that old dog to turn off for 4 hours every night and turn itself back on in time to get my cold brew to the perfect chill by the time I pull in the garage every evening. While I’m at it, I tweak a few other things like turning off the cable box in the guest room which is rarely used. I set the irrigation system to water in my shaded zones every third day to save water. Then, my “do gooder energy savings work done” I go back to my new sports package and watch the final inning of my baseball game.
What a Bundle!
Convenience, savings, and better service—and I feel good about saving the environment from wasteful energy use too. One more thing, I better watch the energy use on that old beer refrig more closely to get the use down on peak—otherwise I might have to convince my wife we need to trade out the refrigerator in the kitchen for a new Energy Star model and put the one we have in the garage to get rid of that old clunker. I might get “brownie points” for suggesting it—unless it costs me a matching dishwasher, range and ovens—all Energy Star of course. But PG&E will give me a rebate for those!
See how easy that was—PG&E didn’t even see me coming until Comcast started helping manage my energy use for me—-and I got the Sports Channel thrown in my bundle!