Why subscription bundling is the ultimate sales promotion tactic

Customer acquisition and retention (churn reduction) are constant challenges for businesses like mobile operators who typically charge monthly over fixed term contracts, or Pay As You Go monthly.  Like many major organisations faced with the same challenges, they have often turned to sales promotion, particularly offering discounts or promotionally priced periods against a longer term commitment.  

But there’s a more powerful and longer-lasting promotional tool emerging: subscription bundling.

In this article, we explore why subscription bundling is fast becoming the ultimate sales promotion tactic and how leading brands of telcos, retailers and banks are using it to drive growth, differentiate offerings, and delight customers.

What is a sales promotion?

A sales promotion is a marketing tactic designed to stimulate the customer to make a purchase by way of incentive, typically offered over a short period. Common sales promotion tactics include:

• Discount pricing (e.g. 20% off your first month)
• Free trials
• Limited-time offers
• Limited availability offer
• Free gifts with purchase (think free toy inside your cereal box)
• Loyalty schemes

Sales promotions are used to:

• Acquire new customers
• Increase perceived value
• Boost conversions
• Drive upsell and cross-sell opportunities
• Re-engage inactive or reduce churning customers

While effective in the short term, these tactics can often feel transactional, one time events. That’s where subscription bundling comes in, offering a more value-driven, long term and differentiated approach to promotion.

What is subscription bundling?

Subscription bundling is the packaging of two or more digital services or subscriptions into a single, combined offer – typically a first party with a third party. Examples include:

• A mobile plan bundled with streaming services like Disney+ or Amazon Prime Video
• A broadband package that includes a gaming subscription such as XBox Gamepass, cloud storage from Google One, antivirus software like NordVPN
• A bank offering subscription bundling as part of a subscription VIP tier
• A retailer’s subscription membership including SVOD services within the cost
• A streaming subscription offering access to multiple platforms under one price (e.g. The Disney Bundle including Disney+, ESPN+ and Hulu)

When used as a sales promotion bundles are typically included within the price of a first party service, also known as “hard bundle”.  For example, Netflix included within the price of the mobile contract.

Alternatively, a soft bundle is when a service is offered with element of choice to the customer and can be a free or discounted subscription, available to the consumer only when they take the first party service.  Often the customer may choose from a range of such offers or opt out. 

What makes subscription bundles so compelling when used as a sales promotion is they offer exceptional added-value to the customer.  An incentive to buy, without offering a price reduction on the first party product. Frequently bundles drive consumers to spend more on the first party product to gain the benefit of the bundle as a whole.

Why is subscription bundling the ultimate sales promotion?

• 1. Built-in value creation

Unlike traditional promotions that hinge on price reduction, a subscription bundle increases the perceived value. Customers get more for their money: more content, at great convenience, all without eroding brand equity.  Bundling therefore is an excellent incentive to the consumer. 

• 2. Customer acquisition without deep discounting

Traditional promotions often rely on steep discounts to entice first-time users. Bundling, on the other hand, offers a better deal through added value, not slashed prices. This helps acquire new users while preserving margins.

For example, a telco bundling Netflix with a mobile plan attracts high-intent users looking for entertainment and connectivity without needing to offer a money off discount.

• 3. Longer-term engagement

Sales promotions are often short-lived. Subscription bundles, however, drive sustained engagement. When a user subscribes to a bundle, they’re more likely to stick around longer, especially if they regularly use more than one bundled service. This makes subscription bundling a retention tool as well as an acquisition tactic.

• 4. Target segments with subscription bundling packages  

With subscription bundling, you can also attract specific segments to your service, for example, bundling a premium fitness app and a lesser known but relevant streaming service to attract lifestyle-focused users to a targeted mobile plan.

Why it matters for product & marketing leaders

Whether you’re leading growth strategy at a mobile operator, launching a new vertical for a streaming service, or managing ARPU at a broadband provider, subscription bundling should be part of your core promotional strategy.

For telcos: Use subscription bundles to acquire new customers, upsell users into premium plans, reduce churn, and increase ARPU.

For subscription-based products such as streamers: Partner with telcos, ISPs, retailers and banks to expand reach, acquire new subscribers, and reduce reliance on direct-to-consumer marketing spend.