Bundle this!

Is it just me, or have cable and phone companies resorted to bundle-only pricing incentives?

By way of background, I’ve been on a quest lately to reduce some of our family bills. A good starting point would be LowerMyBills.com, but I tend to take a more hands-on approach 1 and prefer to do these things myself.

1939 Bell logo
1939 Bell logo

It is perhaps beneficial to understand my bias with respect to these companies.  I tend to think of cable, internet, phone, DSL, et al, as merely “dumb pipes.” The perfectly apt term, which I did not coin, speaks volumes. But if an explanation is necessary, I will elaborate. Consider a public waterworks. They provide — you guessed it — water. It’s really as simple as that. Oh sure, the mechanism required to collect the water, the technology to purify the water, and the infrastructure to distribute the water, are all quite complicated. But the one product this industry provides? Water. And best of all, the water company doesn’t have an over-inflated sense of the service they provide. They aren’t trying to be 2.0, offering 6 varieties of water, with 2-year service contracts, or activation fees with complicated tiered levels of enterprise products.

I digress. So it has been my experience in this cost-cutting adventure of mine that the Dumb Pipes prefer to bundle their myriad services together into one contract with the prospective customer. Why? Because it’s an easier, more guaranteed revenue stream. Why sell a customer one service, if you can strong-arm them into three?

What follows is the transcript of a chat session I had with Century Link (formerly Qwest) about their internet service options:

Thank you for using CenturyLink.com. A CenturyLink Sales and Service Consultant will be with you in just a moment. Your account information is confidential and protected by law. Advise our agent if you prefer that we don’t use it to market bundled services. This has no effect on the service or offers we provide for you. {Emphasis mine! Can you believe it, they have to disclaim the bundling lingo right in their header before I’ve even begun talking with them!}

Chat Information: Thank you for contacting CenturyLink. My name is Tasha K. (20670). How may I help you today?

Rob Lund: Hi tasha, I’d like to switch to you guys for internet ONLY.

Rob Lund: I have my cart all selected.

Rob Lund: 12MB, have my own modem, $30/mo

Tasha K. (20670): I can assist you with your order today Rob. I can place the order for you and by doing so I can by pass the advance payments.

Rob Lund: what does this mean: “by pass the advance payments. ”

Tasha K. (20670): Most times when you do a self order online you will be asked to prepay for a portion of the service.

Rob Lund: ah

Rob Lund: how about the $19.95 one time fee, what is that?

Tasha K. (20670): That is a one time activation fee.

Rob Lund: can we waive that?

Tasha K. (20670): If you do a self order there is not a way to waive the fee.

Rob Lund: I see. What’s the alternative?

Tasha K. (20670): I can place the order and waive the fee

Rob Lund: Gotcha.

Rob Lund: What about the monthly? How firm is that? Are there other incentives we can explore?

Tasha K. (20670): There are a few different promotions that we have. You can go with $29.99 per month for 6 months for the 12M and $50.00 thereafter or you can go with a one year commitment for $39.95 for 1 year and $50.00 thereafter

Rob Lund: So after 6 months, the service is GUARANTEED to increase to $50?

Tasha K. (20670): Yes

Rob Lund: what kind of business model is this?

Rob Lund: I wouldn’t sign up for a cell phone with a similar plan.

Tasha K. (20670): I guess I do not understand what you are saying. $29.99 is a promotional rate and is good for 6 months. The regular rate for the 12M is $50.00 per month

Tasha K. (20670): Cell phone plans are similar. You order service, get a free phone and is locked into a two year contract.

Rob Lund: Ok. It’s just that the keyword “promotional” isn’t well advertised in the mailers or the website or the billboards, etc.

Tasha K. (20670): If you have a piece of mail from us the promotion states the rates before and after the promotional period

Rob Lund: Yes, but the cell phone monthly bill doesn’t increase by 66%.

Tasha K. (20670): That may be true and the cost are somewhere hidden in your monthly rate

Rob Lund: So back to the promotion, I just started over to see what 20MB would cost me…

Rob Lund: it’s showing the same rate, $30/mo.

Rob Lund: ?

Tasha K. (20670): All speeds are the same rate for the first 6 months if you go with the 6 month promotion.

Rob Lund: ah

Rob Lund: how much for 20M after 6?

Tasha K. (20670): The 20M is $60.00 after 6 months

Rob Lund: Wow, ok.

Rob Lund: Well, I’m on Comcast 20M now, and it’s ramping up to $55/mo.

Rob Lund: I was hoping to save a bit of money with you guys.

Rob Lund: I’m not sure it’s worth the effort for only 6/12 months

Tasha K. (20670): The best plan that I recommend is the 5 year price lock. I recommend the 5 year price lock for $64.95 and that will include phone, 8 calling features, unlimited long distance and the 12M high speed Internet, you will get that rate for 5 year guaranteed (no contracts).

Rob Lund: Well, I hope our conversation is getting recorded in some fashion for the business development / marketing people. Because this pervasive “bundling” business model isn’t really appealing to the portion of the market that is more interested in ala carte services. I don’t want a higher monthly bill, even if you’re selling me more services.

Tasha K. (20670): I may be audited. I am kind of surprised because this is one of the best promotions that we have had in a very long time and the new customers are very happy with the new plans.

Rob Lund: I don’t doubt that some customers appreciate it. I’m simply stating that there is a section of the market (myself included) that does not want bundled services. I have to admit that I think of the internet/cell data/voice providers as “dumb pipes.” They’re a utility, an infrastructure utility, not really a service provider. With that thinking in mind, I’m aiming to get the best possible price for a single connection.

Rob Lund: Anyway, I’ve blathered too much already.

Rob Lund: Thanks, have a great day.

Footnotes

  1. shocking, huh, given that I tend toward the anal retentive end of the spectrum?

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