Offering a bundled value proposition

Thorough understanding of customer demand drivers can help marketers offer bundled solutions more successfully

As corporations shift their focus from conglomerating companies towards their core competencies, a new conglomeration of synergies across products is taking form to fuel growth. More companies are acquiring skills in orientating themselves towards their key customers, partnering and integrating different service components, managing large and complex engagements, and crossselling multiple products to their clients.

Selling product bundles as 'solutions' warrants higher margins, while the accompanying price opacity mitigates pricing pressure. However, marketers commonly encounter customers that prefer to standalone products, as frequently as they are able to launch product bundles that work. Synovate's recent research on 60 large companies in Southeast Asia, examining how bundled solutions reduces actual costs of ownership, throws light on the conditions where customers actually prefer to buy a solution over individual products.

Marketers can quantify how bundling can help achieve cost savings of 40% and upwards

Customers are most willing to pay for bundled products in situations when such hidden costs are especially prevalent:

Continuous procurement. Customers, such as consumers of soft–drink buying cartons, tend to be more willing to purchase larger product quantities to reduce contracting expenses from repeat purchases.

Economies of scale. Customers are able to negotiate better discounts when purchasing different components in the same transaction. IT solution vendors, for instance, also prefer to sell hardware, software and services to achieve more optimum and sustainable profit margins.

Multiple touchpoints required. Customers gain from reducing communication inefficiencies by using one provider to liaise within its organisation. As an example, third–party logistics providers plan, execute and manage their clients' entire supply chains, liaising between a client's head office, factory, warehouse and distribution network.

Interlinked engagements. Vendors provide one point of contact to coordinate between multiple external parties, such as in the telecoms space where a network company may be the linkage between operators, equipment makers, survey agencies, construc tion companies and various regulatory authorities.

Various stakeholders involved. Customers frequently need to hold one project manager accountable for ensuring overall delivery. For example, a solution provider like GE Healthcare may hold final responsibility as the lead agency ensuring that processes, equipment and consumables provided by different suppliers meet quality expectations.

Service bundling remains an integral part of any value proposition development process, and a careful understanding of customer procurement processes, usage patterns and needs can ensure that customers will truly value the bundle over the sum of its parts.