Why Bundled Services are Hard to Beat

How do you make your service offering difficult to match and impossible to beat? You see it with mobile phone providers when they put together their packages of minutes, texts and data.

You try to compare one package with another but then one deal has three months’ free and another gives you £100 cashback. Which is better? Or in a different market, what about putting a price on a furry meerkat toy? Making an offer asymmetrical to a competitor’s is a deliberate means of evading direct comparison and encouraging buyers to rely on other cues to make a purchase decision.

It’s particularly clever how John Lewis go about it. The old-school department store will offer to ‘price match’ competitors on the basis of their ‘never knowingly undersold’ promise. I tried to get £20 off a Magimix toaster once on the grounds that it was on sale cheaper at a rival store. A polite but unremitting sales assistant pointed out that this wasn’t a like-for-like price because John Lewis’s price included a two-year warranty. In fact, many of their products aren’t the cheapest around but they all have that two-year warranty – they’re not stand-alone products, they’re part of a bundle.

With professional services, if you bundle your service – incorporating one or two uncommon extras – then your offer is hard to compare. These things can’t just be the same old ‘added value’ items – everyone offers legal updates and the odd training session – they need to be real differentiators, something stand-out appealing. Too many firms fall into the trap of single-pricing services. Procurement departments love putting hourly rates into a table, calculating the difference and proceeding to knock down the higher ones. The key is to ensure that the bundle is different to any other. Your exclusive extras rule out a like for like showdown.

In this way you can create a defensive moat around your offering. Doing so can tip client decision-making towards other factors besides the bare bones of product and price.

Returning to my consumer spending example, I’d rather buy an item from John Lewis because if there’s a problem it’s easier to return and get a refund compared to sending it back to a dubious-looking online seller. If you’re successfully building your brand then you can override comparison because the reputation has a trust weighting that’s worth paying for in itself. But it could be something else that the prospective client values more highly than is necessarily its true worth. Your challenge is to find out what it is that matters most and of course it varies from client to client.

So how do you find out? Time to start your client-listening programme and build a bundle customised by client segment.

About the author: Graham Archbold

With Nisus since 2007, Graham has been involved in more than 50 client research projects for 22 different professional services firms.

Pioneering the use of RATER in professional services, most recently he has led client insight studies in legal, accountancy and property. See Bio…