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The Power of the Partnership: Why Energy and Telecommunications Bundles are a Win-Win-Win

Posted on 06/30/2016

“The evolution of the total home bundle has the potential to encourage more consumers to take control of their energy choices and budgets, powered by their internet, TV and phone service provider.”

Pat McCamley,

Executive Vice President, Corporate Development

“Would you like to save with our value meal?” “Stay with us and add a fourth phone line for free!” Whether it’s fast food, a cell phone and service plan, or cable TV plus a myriad of possible services, U.S. consumers are becoming increasingly familiar with the cost-saving power of the product bundle. When one firm sells two or more separate products in a package for a single price, it is considered “bundling.” And product bundling offers many businesses a tried-and-true way to more effectively reach new customers as well as reinforce existing customer relationships.

For nearly a decade, telecommunications companies have crafted “the triple play” offering internet, video and voice. Studies show that bundle customers are more satisfied than non-bundlers, with 72% of bundled customers reporting satisfaction with their service provider – compared to 55% of non-bundlers. Equally, bundle customers also have a lower propensity to churn, and the likelihood of switching declines as the number of services in their bundle increases.

But the ordinary trio of internet, video and voice is expanding – and the convergence of bundled services from top-tier cable providers and energy providers is more common.

The concept is simple: a service provider works with an energy supplier, like Crius, to rapidly deploy and sell energy (gas, electric and/or solar) to consumers under a core brand they know and trust. In most cases, the energy partner provides a turnkey platform and takes care of all operational fulfillment, while the service provider runs the marketing, and promotes energy products to their existing and prospective customers across a portfolio of online properties, retail centers, direct mail, and/or email communications.

Crius pioneered the retail energy / telecommunications partnership back in 2011 when our first-of-its-kind alliance with Cincinnati Bell allowed customers in Ohio to enjoy the benefits of affordable, 100% green energy. Today, as part of our partnership with Comcast, the nation’s largest residential video, high-speed internet and phone provider, we offer electricity and natural gas through Energy Rewards. This “white label” brand offers competitive rates with partner-specific perks. In addition, Energy Rewards offers valuable Comcast perks for customers who enroll. Benefits include Visa gift cards, free movie tickets, and more – including bonuses exclusive to Comcast customers – like access to premium movie channels.

At a time when subscription services like Netflix and Hulu are helping to further erode consumers’ loyalty to their service provider, product bundling can help improve brand perception and loyalty. More than half of cable customers say they are “frustrated” and 3 percent say they are ready to cancel, (according to management consulting firm cg42). So it’s no surprise that service providers are teaming up with retail energy suppliers to help increase customer “stickiness” and deliver enhanced value.

Perhaps most important, energy and service providers are a win for consumers. White labels with service provider distribution partners can often negotiate highly competitive energy rates, more attractive contract terms and/or exclusive value-added services like green energy or complimentary demand response programs given their huge customer base. And customers who choose to enroll enjoy the same reliable delivery of electricity and natural gas service from their local utility, as well as seamless billing and response to issues and emergencies.

As operating costs continue to increase for businesses everywhere, bundling provides a way for firms to spread customer acquisition costs across a broad set of offerings and adjust pricing to compete with standalone offers, ultimately driving recurring revenue and allowing both to justify a greater investment in other areas of their business, such as sales, technology and service centers.

The benefits to be gained via strategic alliances and partnerships – no matter a company’s size or revenue – are many and varied. Service providers have the resources, consumers and market influence proven to be a perfect match for an energy service provider. The evolution of the total home bundle has the potential to encourage more consumers to take control of their energy choices and budgets, powered by their internet, TV and phone service provider.

Any views or opinions represented in this blog are personal and belong solely to the blog author and do not represent those of Crius Energy LLC, Crius Energy Trust or its affiliates and subsidiaries. All content provided in this blog is for informational purposes only and may contain forward-looking statements. These statements are based on current expectations that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. Crius Energy makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site and will not be liable for any losses, injuries, or damages from the display or use of this information.

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