Research: Bundles driving acquisition and retention
May 23, 2024
Parks Associates, in partnership with Bango, has released its new white paper Effective Bundling: Pain Points and Expectations from Subscription Leaders, featuring custom primary research of industry leaders across the streaming video, music, education, and productivity markets to assess the effectiveness of bundling strategies.
In this research, leading executives share their best practices and strategies to maximize the returns of their partnerships and to avoid and mitigate pain points.
The research white paper draws on the results of 10 interviews with executives representing leading subscription companies across key service markets. Parks Associates consumer research finds entertainment services lead the subscription economy for US internet households:
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89 per cent have a streaming video service
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32 per cent subscribe to a streaming audio service
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20 per cent subscribe to a gaming service
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16 per cent have a gym membership
“Partnerships are increasingly driving acquisition and retention,” said Kristen Hanich, Research Director, Parks Associates. “Partnerships enhance brand awareness and market reach, reduce customer churn, and remove friction from the user sign-up process, in addition to increasing overall customer satisfaction.”
“In a short period of time, subscription bundling has graduated from just a distribution tactic to a fundamental driver of consumer engagement,” added Giles Tongue, VP Marketing, Bango. “Leaders across the subscriptions world recognise the importance of bundling at scale. It goes beyond acquisition, delivering greater consumer satisfaction, increased longevity and more profitable relationships. Bango technology helps many of these leaders capitalise on Super Bundling, building mutually successful partnerships with telcos and other bundling partners”.
Executives report that bundling and partnerships offer numerous benefits to their partners: increasing customer satisfaction as measured by net promoter score (NPS), lowering churn, and enabling companies to differentiate service offerings. In addition, the white paper highlights research finding a 22-point lift in home internet provider NPS associated with bundled streaming video subscriptions alongside home internet service. Customer NPS is highly correlated with the number of bundled services they receive from their ISPs—customer who receive six or more additional services from their provider score an average NPS of 55.
Leading executives find any bundled partnerships can be compelling. However, telcos — including both home internet and mobile providers — are referenced as a natural content fit for many service types and offerings, offering a wide reach, an already established recurring billing relationship, large marketing budgets, and the trust of consumers.
“Successful partnerships also don’t need to be one-off deals – investing in long-term integrations, particularly with telcos, may pay dividends,” Hanich concluded.