Is Bundling All Its Cracked Up To Be?

Bundling of products and services is always a hot topic in the oilfield. Suppliers contend it’s what customers need, and customers seem forever intrigued. Wall Street sees a catalyst for suppliers to grow revenues and expand margins and a way for operators to reduce costs.

One can understand the enthusiasm. After all, who wants to believe leveraging relationships and infrastructure by selling more to loyal clients isn’t a good thing? And the one-stop shop is a more effective supply chain-solution, right?

If it were only so simple.

Analysis of EnergyPoint customer satisfaction data paints a murky picture when it comes to bundling. Thousands of customer evaluations from industry surveys were segmented into four groups based on the number of a supplier’s offerings used by the evaluator. The average satisfaction rating across all suppliers within each group were then calculated.

What we found was that the greater the number of a supplier’s offerings a respondent used, the lower the overall satisfaction score it received from the respondent on average. The decline was especially strong when three or more offerings were utilized by the respondent.

Of the 50+ offerings measured in EnergyPoint’s surveys, downhole cementing equipment was the product most often bundled others. ROVs were the least. Directional drilling was the most likely service to be utilized in conjunction with others, while contract drilling was the least.

Greater Use of a Suppliers Offerings Correlates with Lower Customer Satisfaction

Consistent Ratings Gaps for Large Equipment Vendors But Less Clear for Larger Players

These results cast doubt on blanket contentions that bundling always boosts customer satisfaction. Given the shape of the data, recurring efforts at bundling may actually be hurting customer satisfaction. After all, dealing with a single supplier for multiple needs is one thing; getting better performance as a result is another.

5 Most Often and Least Often Oilfield Products 5 Most Often and Least Often Oilfield Services

 

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