The Problem with Bundles:  3 Reasons You Shouldn’t Get Tangled Up

There are lots of articles that focus on the benefits of bundles and bundling your business services.  Most articles focus on getting a “good” price by tying together 2 or more services from one provider. Although this can be true, there are also some pitfalls you should consider before locking yourself into a bundle.  After all, it’s not really the bundle that is the issue but rather the term or contract you have to sign to get the bundled pricing. Are these bundling discounts really worth being locked in for several years? Will the early termination fees you have to pay to get out of a long-term contract potentially nullify the discounted pricing?  You should think carefully before signing any sort of contract with a term.

What is a bundle?

A bundle is when you tie together two or more services that are typically priced and sold individually as a combined service for a price that is lower than purchasing each service individually.  Bundling is really a marketing strategy of offering multiple products for sale as a combined product at a combined price.

What are the benefits of bundling?

The main benefits are getting two or more services together for a lower overall price that purchasing individually.  The other benefit is having one vendor for two or more services. This benefit can turn into a detriment if both services are not really used or if you decide for one reason or another you want to unbundle service.  Bundling can also backfire if you are not getting the level of service or support you need. Now you have just one vendor for two or more services.

3 Reasons Not to Bundle:  Potential drawbacks of bundling

What is not to like about saving some money while getting multiple products?  The problem comes in when a business bundles services together that you don’t necessarily fit their needs.  In our experience, we often find customers who bundle together an internet connection with phone service, typically from large national providers like Comcast or AT&T.  The internet connection is a great but the phone service becomes a problem when it doesn’t fit the customer’s needs but because the services are contracted under a single agreement, you can’t replace a single service without breaking the bundled pricing. 

Problem #1 – Long-Term Contracts:

The biggest issues with bundles is that to get the bundled pricing you typically have to agree to a contract or term.  You are often given discounted bundled pricing by signing a multi-year agreement. Also common, the promotional bundle pricing expires at the end of the term.  In today’s business environment, you have to be nimble and changes do not happen in three year increments for your business. In order to get out of the contract early, there are almost always steep early termination fees.

Problem #2 – Price Changes:

This one is also related to the contracts.  You have a bundle and that bundle might get you a price lock guarantee for a year or two.  You are feeling good about your pricing but your contract locks you in for 3 years of payment so you should expect a price change (read: price increase) for the rest of your contract term.  Why not find a provider that has consistent, predictable pricing rather than pricing that varies?  Staff growth and changes are inevitable and scaling up or down and bundling can cause these changes to be expensive and cumbersome.

Problem #3 – Services You Don’t Need:

Sometimes you really want or need one service, but you take both to get the bundled pricing.  Once again phone service is the example. Some providers will hold a carrot of faster internet for a better price but only offer that price and speed in conjunction with bundling phone service.  The benefit of faster internet service for a better price might not be worth the risk if your business voice communications are compromised. After all, new clients and customers usually contact your business by phone. Missed calls mean lost revenue or unhappy customers or both. Your business communication needs are too important to leave to chance.

Another problem is that sometimes having all of your eggs in one basket can lead to problems. What if the services you are using aren’t meeting your business needs?  What if the customer service and support is not up to your standards?  At Level365, we don’t lock you into long-term contracts.  Instead, we put our service on the line every month.  If we don’t deliver or meet your expectations, you are free to leave with no strings attached.

About Level365:
Level365 offers a complete Unified Communications as a Service (UCaaS) solution with enterprise voice that is customized and scalable for your business. Our service seamlessly integrates communication among desk phones, computers and mobile devices to support remote teams and provide flexibility for on campus staff.  The UC platform extends beyond voice communications with Unified Messaging, Analytics, Presence, Chat/SMS, Cloud Faxing, Business System Integration and more.

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