The passage of the Telecommunications Act of 1996 increased competition in the telecom industry. These days, nearly every telecommunications company is offering, or considering offering, bundled services to attract new customers, increase retention of current customers, or both. Every time I turn around, there seems to be a new variety of bundled services. Quality, ease of use, and the right price points in a market, make these bundles very attractive to consumers. Most offers are directed at consumers, but the industry is looking for emerging market spaces. AT&T just announced it would be offering its U-verse IPTV product and its via-resale DirecTV service, bundled together with landline voice, wireless voice and broadband Internet services, to the small business market. The company explained this package might be attractive for small businesses with client waiting rooms. Bundle of joy While there are a few risks involved in offering bundled services (a topic we will explore in a future post), by and large, the benefits of bundled services are many: 1. Enhanced customer loyalty – Customers are less likely to go to the trouble of unbundling services in order to switch providers. – Customers feel more connected to your organization on multiple fronts. (Both of these help to shield you from competitive displacement attempts.)   2. Simplified customer experience – Consumers enjoy the convenience of bundled services, which allows them to manage multiple services with a single billing statement and a single payment. – When money is tight, bundle customers will generally pay the entire bill, as opposed to paying only part of the bill.     3. Save provider time and money – Bundled billing reduces the number of bills sent each billing cycle, which means less paperwork for you and your customers. – Fewer bills sent also means fewer payments to process.     4. Penetrate new markets – Partnering with a company, who has a bigger footprint in a particular market, allows you to leverage that partner’s existing customer base. – Bundling also can help you penetrate a new market with more competitive price points.     5. Easier and less risky up-selling path for larger share of consumer products and services – The partner, already having an established relationship with the consumer, will have an easier time up selling your product offerings to their customer base.     If you’re thinking about getting into the bundling game — or expanding on your current bundling strategy — you need to know that getting bundling right is no easy task. Check back for future blog posts in which I’ll discuss what makes a “smart” bundled offering, as well as how to ensure you’re offering the right bundle to the right customers. In the meantime, if there are specific topics in the realm of bundling you would like to see addressed, please be sure to comment on this post.

As our newly elected officials begin to evaluate opportunities to drive economic growth in 2011, it seems to me that the role of lenders in motivating consumer activity will continue to be high on the list of both priorities and actions that will effectively move the needle of economic expansion. From where I sit, there are a number of consumer segments that each hold the potential to make a significant impact in this economy. For instance, renters with spotless credit, but have not been able or confident enough to purchase a home, could move into the real estate market, spurring growth and housing activity. Another group, and one I am specifically interested in discussing, are the so called ‘fallen angels’ – borrowers who previously had pristine track records, but have recently performed poorly enough to fall from the top tiers of consumer risk segments. I think the interesting quality of ‘fallen angels’ is not that they don’t possess the motivation needed to push economic growth, but rather the supply and opportunity for them to act does not exist. Lenders, through the use of risk scores and scoring models, have not yet determined how to easily identify the ‘fallen angel’ amongst the pool of higher-risk borrowers whose score tiers they now inhabit. This is a problem that can be solved though – through the use of credit attributes and analytic solutions, lenders can uncover these up-side segments within pools of potential borrowers – and many lenders are employing these assets today in their efforts to drive growth. I believe that as tools to identify and lend to untapped segments such as the ‘fallen angels’ develop, these consumers will inevitably turn out to be key contributors to any form of economic recovery.  

Remember the new customers or subscribers you brought on last year, and how great they looked on paper?  High credit score, low revolving debt—clean as a whistle, solid as a rock. How do those stellar profiles look right now, in 2011? Still solid? Or has their luster recently faded? In today’s uncertain environment, it’s both a legitimate and prudent question credit departments should often ask. Regular portfolio reviews: illuminate, eliminate Because of the financial relationship between your company and its customers, you have a right to make “soft” inquiries to uncover new credit-quality risk. Red Flag indicators include a recent bankruptcy, an increase in late payments, and other credit obligations staying past due longer. Whatever the changes are, you’re entitled to know them, and regular portfolio reviews are an effective way to illuminate (and eliminate) risk. The other side of the coin Thankfully, telecom/cable credit trends are not all gloom and doom. Many people have actually improved their scores and are good candidates for better terms, better rates and cross-sell opportunities that can increase your wallet share. Of course, once you land good customers, keeping them happy becomes paramount. Increasing the number of products or services they use can make customers “stickier” and more loyal. So if, as mentioned in my previous post, acquisition is about prospect quality (not quantity), then retention and risk reduction are about regular portfolio reviews and keeping people happy. Supplementing reviews by letting customers know you value and appreciate their business, will help them stay put when pesky competitors come knocking.

The passage of the Telecommunications Act of 1996 increased competition in the telecom industry. These days, nearly every telecommunications company is offering, or considering offering, bundled services to attract new customers, increase retention of current customers, or both. Every time I turn around, there seems to be a new variety of bundled services. Quality, ease of use, and the right price points in a market, make these bundles very attractive to consumers. Most offers are directed at consumers, but the industry is looking for emerging market spaces. AT&T just announced it would be offering its U-verse IPTV product and its via-resale DirecTV service, bundled together with landline voice, wireless voice and broadband Internet services, to the small business market. The company explained this package might be attractive for small businesses with client waiting rooms. Bundle of joy While there are a few risks involved in offering bundled services (a topic we will explore in a future post), by and large, the benefits of bundled services are many: 1. Enhanced customer loyalty – Customers are less likely to go to the trouble of unbundling services in order to switch providers. – Customers feel more connected to your organization on multiple fronts. (Both of these help to shield you from competitive displacement attempts.)   2. Simplified customer experience – Consumers enjoy the convenience of bundled services, which allows them to manage multiple services with a single billing statement and a single payment. – When money is tight, bundle customers will generally pay the entire bill, as opposed to paying only part of the bill.     3. Save provider time and money – Bundled billing reduces the number of bills sent each billing cycle, which means less paperwork for you and your customers. – Fewer bills sent also means fewer payments to process.     4. Penetrate new markets – Partnering with a company, who has a bigger footprint in a particular market, allows you to leverage that partner’s existing customer base. – Bundling also can help you penetrate a new market with more competitive price points.     5. Easier and less risky up-selling path for larger share of consumer products and services – The partner, already having an established relationship with the consumer, will have an easier time up selling your product offerings to their customer base.     If you’re thinking about getting into the bundling game — or expanding on your current bundling strategy — you need to know that getting bundling right is no easy task. Check back for future blog posts in which I’ll discuss what makes a “smart” bundled offering, as well as how to ensure you’re offering the right bundle to the right customers. In the meantime, if there are specific topics in the realm of bundling you would like to see addressed, please be sure to comment on this post.

As our newly elected officials begin to evaluate opportunities to drive economic growth in 2011, it seems to me that the role of lenders in motivating consumer activity will continue to be high on the list of both priorities and actions that will effectively move the needle of economic expansion. From where I sit, there are a number of consumer segments that each hold the potential to make a significant impact in this economy. For instance, renters with spotless credit, but have not been able or confident enough to purchase a home, could move into the real estate market, spurring growth and housing activity. Another group, and one I am specifically interested in discussing, are the so called ‘fallen angels’ – borrowers who previously had pristine track records, but have recently performed poorly enough to fall from the top tiers of consumer risk segments. I think the interesting quality of ‘fallen angels’ is not that they don’t possess the motivation needed to push economic growth, but rather the supply and opportunity for them to act does not exist. Lenders, through the use of risk scores and scoring models, have not yet determined how to easily identify the ‘fallen angel’ amongst the pool of higher-risk borrowers whose score tiers they now inhabit. This is a problem that can be solved though – through the use of credit attributes and analytic solutions, lenders can uncover these up-side segments within pools of potential borrowers – and many lenders are employing these assets today in their efforts to drive growth. I believe that as tools to identify and lend to untapped segments such as the ‘fallen angels’ develop, these consumers will inevitably turn out to be key contributors to any form of economic recovery.  

Remember the new customers or subscribers you brought on last year, and how great they looked on paper?  High credit score, low revolving debt—clean as a whistle, solid as a rock. How do those stellar profiles look right now, in 2011? Still solid? Or has their luster recently faded? In today’s uncertain environment, it’s both a legitimate and prudent question credit departments should often ask. Regular portfolio reviews: illuminate, eliminate Because of the financial relationship between your company and its customers, you have a right to make “soft” inquiries to uncover new credit-quality risk. Red Flag indicators include a recent bankruptcy, an increase in late payments, and other credit obligations staying past due longer. Whatever the changes are, you’re entitled to know them, and regular portfolio reviews are an effective way to illuminate (and eliminate) risk. The other side of the coin Thankfully, telecom/cable credit trends are not all gloom and doom. Many people have actually improved their scores and are good candidates for better terms, better rates and cross-sell opportunities that can increase your wallet share. Of course, once you land good customers, keeping them happy becomes paramount. Increasing the number of products or services they use can make customers “stickier” and more loyal. So if, as mentioned in my previous post, acquisition is about prospect quality (not quantity), then retention and risk reduction are about regular portfolio reviews and keeping people happy. Supplementing reviews by letting customers know you value and appreciate their business, will help them stay put when pesky competitors come knocking.