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Apr 2, 2019 | 4 minute read

Bundling matters: why telecom companies seek an API-based commerce solution

written by Anatoli IIakimets

In September 2017, T-Mobile announced that it would include a free Netflix subscription for family plan members. “While on the surface this might seem to be just a promotion, it highlights how T-Mobile can layer on additional services into a bundle that customers actually want,” said BTIG research analyst Walter Piecyk.

Since 2013, T-Mobile has used bundling and pricing to attract more new subscribers than all of its rivals combined. Customers were drawn by the promise of simple, unlimited plans and then delighted by special offers. In May 2017, they gave a buy-one-get-one-free on Samsung Galaxy S8 if you activated another line. This past November, they offered a $300 discount off the iPhone X.

Bundling builds customer loyalty 

Bundling rewards customers for their purchases and makes them feel like they are getting a deal. It can also reduce customer churn. The paper “The Dynamic Effects of Triple Play Bundling in Telecommunications” (Time Warner Research Program on Digital Communications) says that for telecoms and other industries that sell recurring services, bundling can help create the irresistible combination of savings and convenience. They only need to pay one bill to take care of many needs – and the ultimate benefit is that they sign up now and don’t have to worry about it again. Any tempting price offer from the competition is weighed against the hassle of leaving. 

Bundling creates irresistible offers 

T-Mobile promotions and other types of product bundles—run on powerful commerce engines that configure offerings depending on a customer profile. Is it a valued customer who wants to upgrade? Is it an anonymous shopper responding to a Facebook ad or a partner website? Certain actions – coupon codes, special modes of payment, hitting a maximum price – can slash prices even further. Special bundle pages can even calculate savings, hooking in a casual browser into buying far more than she originally intended. 

Bundled or tangled in technology?

Unfortunately, many of the largest communications companies that attempt to offer bundles across business lines  hit a technical tangle. They’re stuck with multiple legacy business support systems (BSS) and operation support systems (OSS) to support multiple lines of business. These systems have been designed to support traditional services, contain a lot of customizations and are extremely complex. This leads to long time-to-market for new digital products and services (Applications, content, M2M/IoT), makes bundling extremely difficult and dynamic pricing virtually impossible. Siloed systems also make it harder to deliver consistent customer experience across existing and emerging touchpoints.

Customers feel the confusion, too. Because back-end systems aren’t integrated, neither are customer profiles. They get a disjointed experience that fails to recognize their purchase expectations, reward their loyalty, or provide offers in the context of their purchasing intent. If companies can’t offer them bundling or the kind of personalization they expect, nothing will stop them from going to one that can. 

Unbundle opportunities with API-based commerce 

In a typically fragmented telecom technology environment, the ability to assemble information from siloed systems is crucial. 

Accelerated time-to-market

API-based, headless commerce solutions can help telecommunications companies break down the silos. It creates an abstraction layer on top of legacy BSS/OSS systems to provide consistent unified customer experience across all touchpoints and business lines. This allows businesses to make any necessary changes without making changes to existing legacy systems which helps to accelerate time-to-market.

Flexible bundle offerings

Modern commerce systems support traditional and digital services including third party services. This enables business to openly combine products and services into static and dynamic product bundles. This allows to create added value for the customers and drive ARPU growth while creating superior customer experience.

Omnichannel journeys

Unified headless commerce solution allows business to sell bundled products and services across broad omnichannel ecosystem of traditional and digital channels. This allows to create unified view on customer interactions across touchpoints to provide consistent customer experience as well as to maintain continuous omnichannel journeys. Well-defined APIs enable quick onboarding of new touchpoints including connected-devices, chat-bots, AR/VR and changes to existing ones.

The clear winners, of course, are telecom customers. 

API solutions pave the way for them to get exactly what they need at the moment they need it and be recognized as individuals and rewarded for their loyalty. Their journey may change and become even more complex as new technology and touchpoints emerge, but the system will always be able to adapt. Marketers will be able to create not just bundles, but a dynamic and loyalty-building customer experience.