As consumers shift to using more and more subscription services than they have in the past, businesses are looking for a way to simplify that experience for their customers and increase retention. What was once covered by a single cable bill is now made up of several streaming subscriptions. Software that was once paid for once every few years when a new version came out, is now a monthly expense.
While these changes are generally good, offering more choice to consumers, and more flexibility to development teams, enterprise businesses have discovered that bundling select services can offer a similar level of choice to the current approach, while offering some of the simplicity of the previous approach. This has led to a new form of subscription model known as rundle.
Subscription services have taken off in recent years. They were first popularized by the SaaS business model. Selling a subscription to software instead of a permanent license allows developers to continually refine the product. Customers end up paying around the same amount as they would to buy a new version every few years, but wait less time for new features.
Ubiquitous access to broadband made such a model possible, which is also why we saw the rise of streaming video services around the same time. These allowed customers to pay less money by selecting only the services they wanted, reducing the monolithic cost of a cable bill and providing more on-demand access to the content at the same time.
Now, following the success of the subscription model that was opened up by the availability of broadband, brands offer monthly subscriptions to frequently used physical goods as well. You can get subscriptions for everything from grooming products to entire meals.
With the rise of this new way of doing business, companies are looking for a way to further stand out from the crowd, and manage the ever-present challenge of a subscription business model: churn. One way they're doing this is by bundling must-have services to increase the perceived value, and the stickiness, of their subscriptions. These subscription bundles are called rundles.
So, why use the term rundle and not just bundle? The term comes from a professor of marketing at NYU, Scott Galloway, who is also a successful podcaster. Scott hosts a show examining who is and isn't performing well in a changing economy, and helps businesses understand how they can mimic these successes. He coined the term, rundle, as an abbreviation of recurring revenue bundle.
While there's certainly a similar mentality to the appeal of the rundle as there is to a plain bundle, Scott makes the distinction for subscription brands. Rundles are a shift in the paradigm of how subscription services are offered, and with such new ways of thinking, often comes new terminology to describe them.
With any shift in how business is conducted comes variations on that shift. Rundles are no different. What started as straightforward bundling, has now evolved as brands look for innovative ways to increase value and improve customer retention. Today, there are three main types of rundle being used:
One of the big advantages of rundles is that they provide an obvious benefit to both businesses and consumers. The switch to subscription-based products and services has altered the way people perceive value. Streaming services allow customers to cut the large cable bill and pay less by purchasing only what they want. SaaS provides faster update frequencies and an easier monthly expense rather than a single large upgrade fee. Physical items that are purchased regularly anyway are delivered effortlessly, and often with higher quality than their in-store counterparts.
Rundles, especially the more innovative ones that have arisen, allow consumers to retain those benefits while saving them money and simplifying budgeting. In turn, this added perceived value gives subscription-based companies a more loyal customer base.
To better understand why rundles are changing the subscription landscape and becoming a popular business model, let's take a closer look at the benefits they offer to the companies who use them and their customers. Below are some of the major benefits of rundles, followed by some of which are unique to partnership bundles.
Now let's take a closer look at how partnership bundles bring added value to the companies who choose to take part in them.
Our goal is help subscription businesses succeed by achieving faster recurring revenue growth. And part of how you do that is through your pricing—proper pricing. Though pricing plays a crucial role in the growth of your revenue, most businesses neglect this aspect. Adequately pricing your product or service can be complicated, and as subscription businesses continue to grow and evolve, so should your pricing strategies—including your rundle strategies.
Our Price Intelligently software and methodology is a powerful pairing of our proprietary algorithms and market panel, as well as a team of the best subscription and pricing economists in the world. We do all the work for you and ensure your pricing strategy is driven by data and get your subscription pricing on track to unlocking 30% more growth.
A rundle is a term for subscription-based businesses who choose to bundle several of their products together or to bundle their products with those of a strategic partner. The word is a shortening of the phrase "recurring revenue bundle," and was coined due to the changes in the way traditional bundling was offered as it adapted to the unique needs of subscription business models.
Scott Galloway is a professor of marketing at NYU. He is also a popular podcaster, who hosts the Prof G Pod podcast, where he discusses how businesses can get ahead in an increasingly innovation-based economy. He's the person who coined the term, rundle, to describe how subscription-based businesses were taking advantage of, and re-shaping, product bundles.
At the core, a rundle bundle is merely a bundling of products or services offered by a subscription-based company. In addition to traditional-style bundles, rundles can also include the option for customers to create their own bundles based on a company's product selection, or to bundle products from multiple companies who have complementary product offerings.