The Evolution of Telco Bundling and the Role of AI Marketing in Shaping Success
Bundling services—offering multiple services as a single package—has been used within many industries as a way of both increasing sales and reducing consumer churn. In the dynamic world of telecommunications, bundling has undergone several significant transformations. From the early days of combining basic phone services with cable television to the current era of integrating high-speed internet, mobile services, smart home technologies, and now streaming services, telcos have continually adapted their bundling strategies to meet changing consumer demands and market conditions. As we enter this new chapter, the role of artificial intelligence (AI) in marketing is becoming increasingly pivotal. Here’s a deep dive into how telco bundling has changed and how techniques such as audience segmentation, multichannel marketing and AI can drive future success in this space.
The Evolution of Telco Bundling
In the early days of telecommunications, bundling was relatively simple. Companies offered packages that combined landline phone services with basic cable television. These bundles were designed to provide consumers with convenience and cost savings, encouraging them to subscribe to multiple services from a single provider. As technology continued to advance to include the introduction of high-speed internet, triple-play bundles were created that included phone, television, and internet services. Over time, the concept evolved to even include mobile services, creating bundles that catered to nearly every aspect of a consumer’s connectivity.
Now bundling is incorporating things such as streaming services and smart home technology. Telcos offer bundles that include home automation devices, including smart thermostats, security cameras, and voice-activated assistants. This shift reflects a broader trend towards integrating telecommunications with the Internet of Things (IoT), providing customers with a comprehensive suite of connected services.
BONUS: Download the 2024 Claritas Smart Home Technology Report
The inclusion of streaming services is exemplified by T-Mobile’s offer of free Apple TV+, Netflix Standard and now Hulu (with Ads) to its Go5G Next plan customers; and Verizon’s inclusion of the Disney Bundle, Walmart+, Apple One, Netflix and Max with unlimited phone plans.
PRO-TIP: Modern consumers demand more personalized experiences, which means telcos must move towards customizable bundles, allowing customers to select and combine services based on their individual needs and preferences, offering a greater degree of flexibility than traditional one-size-fits-all packages.
Leveraging Marketing for Success
As telcos continue to refine their bundling strategies, strategic marketing emerges as a crucial tool for driving success:
Audience Segmentation: Analyzing customer data allows you to determine distinct customer segments based on behavior, preferences, and usage patterns. This segmentation enables you to tailor bundling offers to different groups, ensuring that each package resonates with its intended audience and addresses their specific needs.
For example, see the graph below which was developed using data from Claritas’ ConneXions – a proprietary segmentation solution designed specifically for the technology and telecommunications industry. While there are innumerable ways to dissect audiences, this graph looks at one main audience characteristic – age category. Here it is clear that the age segment 35 – 54 indexes quite high for including home security in bundles, as well as mobile phone services. Furthermore, this is also the primary group for having changed internet and/or TV service providers because of a better service bundle offer.
PRO-TIP: If you are an internet, mobile phone and/or TV service provider, finding ways to include streaming services and/or home security as part of a total package can pay huge dividends. And don’t forget that home security is just one part of a total smart home technology boom that continues to dominate this growing market. And, as prices for such devices continues to come down due to economies of scale, this market will continue to provide additional opportunities.
BONUS: Download the 2024 Claritas Home Security Report
Metro by T-Mobile’s inclusion of a yearlong subscription to ViX Premium, one of the largest streaming services for Spanish-language programming is an excellent example of targeting a key growth audience segment. In fact, Hispanics now represent more than 20% of the U.S. population and account for more than 62% of the U.S. population growth since 2010.
Claritas recently released its 2024 Hispanic Market Report which showed that Hispanic consumers are more likely to bundle their TV, internet and phone services, than non-Hispanics (excerpt below), further demonstrating the need for bundles which target this key market.
PRO-TIP: A key growing market that prefers to bundle services – clearly Metro by T-Mobile has the right idea in designing packages that include specifics for this segment. Hispanic streaming services, international calling plans, and in-language collateral are just a few examples of components that should be a part of marketing to this target audience.
BONUS: Download the 2024 Claritas Hispanic Market Report
Multichannel Marketing: Multichannel marketing involves engaging with customers across various platforms, including social media, email, websites, mobile apps, and more. By leveraging multiple channels, telcos can reach customers where they are most active, ensuring that marketing messages and bundle offers are seen by a broader audience. A multichannel approach provides a comprehensive view of customer interactions and behaviors – which can then lead to the development of more effective bundling offers.
Multichannel marketing also allows telcos to deliver a cohesive message across all platforms, reinforcing brand identity and ensuring that customers receive a unified experience, whether they are interacting with the company online, via mobile, or in-store. Engaging customers through multiple channels enhances the likelihood of interaction and conversion. And now the use of AI can help tailor content and offers for each channel, ensuring that customers receive relevant information and incentives based on their preferred mode of communication.
The Role of AI Marketing in Shaping Future Success
Personalized Marketing Campaigns Using AI: Taking it one step further, AI-driven marketing optimization can highly personalize campaigns by analyzing individual customer data in real-time. This personalization can extend to recommending specific bundles based on a customer’s past interactions, preferences, and browsing behavior, and then offering up customized content for those specific bundles to the right people, at the right time in the buying process, and employing the correct channels. Tailored promotions and offers increase the likelihood of both customer satisfaction in their buying journey, and conversions.
Claritas now offers the integration of patented and advanced AI technology into our current infrastructure and machine learning methodologies, further enhancing the accuracy, speed, ease of use and scale of our other marketing solutions, including audience segmentation, multichannel marketing and campaign optimization. Claritas’ ability to integrate cutting-edge AI technology with our robust data solutions, drives personalized customer experiences and breakthrough results. Some of our core AI-driven solutions available today include:
Claritas AI Audience Optimization – identifies the optimal audience for your message, then dynamically adjusts targeting throughout your campaign.
Claritas AI Creative Optimization– enhances creative and messages using unsupervised learning to discern how to align different creative and messaging across the consumer journey.
Claritas AI Media – by analyzing audience response and message performance, we fine-tune your marketing efforts for maximum impact.
Claritas AI-driven Measurement and Attribution – optimizes return on ad spend by providing transparency into detailed reporting and performance analysis of what’s working, so AI can improve what isn’t.
The evolution of telco bundling reflects broader trends in technology and consumer behavior, with a growing emphasis on integrated and customizable solutions. As you navigate this complex landscape, AI marketing, combined with robust audience segmentation and multichannel strategies, emerges as a powerful ally. By harnessing the capabilities of AI, you can drive greater success and build stronger relationships with your customers – positioning you at the forefront of innovation in a rapidly evolving industry.