There are lots of articles that focus on the benefits of bundles and bundling your business voice & data services. Most articles focus on getting a “good” price by tying together business voice and data 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 at 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?
The main benefit of bundling is getting two or more services together for a lower overall price compared to 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 the service. Bundling can also backfire if you are not getting the level of service or support you need. Now you are stuck with one vendor for two or more services without getting the support you deserve.
3 reasons not to bundle: what are the potential drawbacks?
What is not to like about saving some money while getting multiple products? The problem comes in when you really bundle services together that you don’t necessarily want or need. In our experience, we often find customers who bundle together an internet connection with phone service from one of the big providers (AT&T, Comcast, Verizon, Spectrum and others). The internet connection is
Problem #1 – Long-Term Contracts
The biggest issue with bundles is in order to get the bundled pricing, you typically have to agree to a contract or term. They often give discounted bundled pricing when you sign a multi-year agreement. Another problem is that the promotional bundle pricing expires at the end of the term. In today’s business environment, you have to be nimble and changes happen more frequently than a 3-year contract so why would you want to be stuck for 3 years? There are almost always steep early termination fees to get out of the contract early.
Problem #2 – Price Changes
This one is also related to after the contract ends. 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. Guess what is going to happen? 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 for your business. Scaling up or down with a bundle can cause these ordinary 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 most comment 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.
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
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