January 20, 2022 | Authored by: Vivian Xie
The rundle: a lucrative intersection of recurring and bundled services
The rundle – or “recurring bundle” – bundles two or more subscriptions for consumer convenience and greater profitability.
Rundling enhances the subscription experience while enabling businesses to drastically increase their recurring revenue. Inc Magazine noted that bundled subscriptions are proving to be powerful tools to attract, engage, and retain users.
“First, you can increase the average order value (AOV) by getting the customer to buy more because of the perceived discount,” wrote Anne Gherini, Chief Marketing Officer of Shasta Ventures. “Second, you can also eliminate less popular products by tossing them into the bundle and jacking up the ‘value’ of the package. Third, you can introduce new products to customers by coupling them with best-sellers.”
Consumers are ready for easier, more convenient ways to get all the content and services they love in one place. In fact, nearly 70% would cancel a current subscription if they could sign up with a single provider of bundled content and services, according to research from Amdocs, the parent company of Vindicia.
How do you design rundles that delight your customers and turn them into lifetime subscribers?
Read on for a more in-depth explanation of what rundles really are, and some questions to help you decide if a rundle is the right fit for your subscription business.
Three types of rundles
Rundles can fit more or less any genre of subscription business, from print to digital to audio and beyond. They can also be a prime opportunity to leverage competitors’ successes into success for your own business.
Depending on the companies involved, rundles can be split into three broad categories: Organic, aggregator, and partnership.
Organic rundles are created and delivered by a single provider. Industry giants (Adobe Creative Cloud, Apple One, Amazon Prime, or the Disney Bundle) offer well-known organic rundles to capture multiple audience groups or related services into a single subscription.
For example, Adobe leverages Vindicia’s solutions to create organic rundles and bundled partnerships that strategically combine Adobe products and services often used hand-in-hand or capture a new market segment of subscribers. Vindicia is enabling Adobe to bring its software to new customer segments, creating additional steady streams of recurring revenue – which now makes up more than 90% of its total annual revenue.
Smaller providers do the same, weaving multiple subscriptions into organic rundles to capture a wider general audience.
Aggregator rundles join together multiple third-party subscriptions, and the aggregator assumes most of the risks and costs. Subscription providers benefit by leveraging aggregators’ existing networks and know-how, while aggregators benefit from the branding provided by each subscription.
For example, Comcast aggregates popular services such as HBO, Hallmark, and Lifetime Movie Club to attract a wider pool of viewers for its cable subscription, while helping subscription companies provide direct access to potential long-term subscribers.
Partnership rundles involve two or more subscription providers that come together to offer complementary services, thereby creating their own subscription ecosystem — which adds value for consumers.
For example, home-security service SimpliSafe teamed up with Hippo Insurance to give homeowners access to both security devices and property insurance under one plan. These partners work together to deliver safety and security for the home — with only one transaction required.
The partnerships work in every segment of subscription — print and audio, for example. Audiobooks provider Scribd teamed up with the New York Times to expand content categories and reach wider audiences.
Benefits of the rundle
Rundles pack a powerhouse of value for subscribers in the form of convenience and price. However, there are other, more invisible factors that are important for subscription providers to consider in order to extract the benefits of recurring revenue bundles.
While convenience and value build a customer base, it’s intentional use of data that maintains that base (and reaps long-term rewards for the provider). Providers also need to consider what actions they’ll take to stay competitive: Is scaling up a necessity? If so, what does that look like?
Enhance subscriber convenience and value
Bundle your subscribers’ most-used subscriptions into one place to make it convenient for them to access and pay for. Make the price attractive. Remember: Rundle customers want to pay less money overall than they would if they paid for the same subscriptions individually.
Boost subscriber retention
Rundles offer a high-engagement opportunity to deliver value and convenience that can build long-term loyalty. Use subscription intelligence to help determine what each subscriber likes and dislikes.
How and when does subscriber A like to use the rundle? How does that compare to subscriber B? Use a capable digital identity system that enables subscribers to seamlessly access all parts of your rundle.
Scale-up your operations
Growth comes at a cost, but your company can mitigate operational expenses with a rundle strategy that fits your business. Consider your competition and analyze what they are offering. Ask yourself what your competitor provides that might be driving away some of your business.
Consider leveraging a partner or aggregator to build your unique rundle — and be open to partnering with a competitor. Leverage the partner’s existing subscriber base to help reduce costs and risks, accelerate go-to-market plans, speed-up the building of solid customer relationships, and reach profitability sooner.
Sometimes, it’s easier to turn your enemy into an ally rather than a foe.
Are you ready to rundle?
Rundles are arguably a great move for most subscription businesses — but not for all. Consider these questions to help you gauge if building a rundle makes sense with your subscription business model:
- What complementary products or services exist in your suite?
- What purposes does each product/service serve? How do complementary products/services provide additional value to your subscribers?
- Think about everything — from your brand values to your distribution partners. What additional market segments might benefit from your subscription(s)? What other sections of the population would you like to target?
- What areas of the subscriber experience can you optimize using rundles? Onboarding, in-life, and/or renewal?
- Which type of rundle best fits your needs and goals? Think about what makes your offerings attractive to your customers.
- What kind of subscription data will you need to support your goals? Where do you want to start making connections?
If you’re able to provide answers and a rough plan to 80% of these questions, then you’re ready to rundle! Vindicia is here to support the entire process and help subscriptionpreneurs discover gaps in their business strategies that rundling can help fill. Our subscription experts can help you determine if a rundle is right for you. What’s more, our MarketONE platform brings together recurring transactions, subscription bundling, and user journey management. Plus, MarketONE comes with subscription intelligence, providing insights from real-time data and analytics.
To delve deeper into subscription rundles, read these resources:
Twelve essential steps to building subscription bundling successDownload