In this volatile economic period, Sirius XM offered a rare glimpse into the company's strategy to alleviate retail confusion, adjust to tiered service plans and battle a brutal economy in the fourth quarter.
Jim Meyer, operations and sales president, told TWICE the company will push its top-tier $16.99/month "Best of Both" service. A Black Friday promotion offers three free months of "Best of Both" service with the purchase of any Sirius or XM aftermarket product. "Best of Both" adds Sirius channels to an XM subscription or XM channels to a Sirius subscription at a $4 premium.
The company will also focus heavily this season on radio advertising under a single Sirius XM banner, said the executive in an exclusive interview with TWICE.
Meyer said the company's sales to date of "Best of Both" subscriptions exceeded all forecasts. He said it was too soon to tell how the lower-tier a la carte services is performing at $6.99/month, "When you look at the other pay services, tiered programming has been successful. We're encouraged by the early results. Obviously we like it better when they buy the $16.99 rate than $6.99."
The company hopes the switch to joint advertising will alleviate customer confusion at retail. "If you go to a Best Buy or Circuit City beginning [last] week, for the holiday period, you'll see a common display with both brands displayed and a common merchandise strategy. We think that goes a long way toward the elimination of confusion. Also, within the retail brochures, [there is] one promotion for both brands."
Displays will also be available in other stores and will spell out service plans.
He said advertising this year will include more radio and less TV. "We think changing it up was a good idea. We're excited about [radio] because we think it is an efficient vehicle to get new listeners." He noted of print ads, "We think we'll be well represented in retail ads. We're very happy with the space we've been able to secure through our retailers."
When asked about the recent spate of complaints from bloggers after the company adjusted its channel lineup, Meyer said the changeover resulted in relatively few deactivations. "Over the last five days, while I never like to lose any customers, I can tell you it's been a non-issue. We did lose some. In my mind, so far, I've been very pleased considering as a big a change as we did."
Meyer acknowledged the headwinds of the current economy, stating, "No doubt the downturn will have an impact on how many new cars are sold next year and how many will have satellite radio in them. We're all trying to wait till this thing finds its bottom and figure out where to go from there. We get predictions from our partners and two or three industry sources and they are all over the place. It's difficult to predict how many cars will be sold in 2009. With that in mind ... we've always been committed to the aftermarket business, and we continue to be committed to the aftermarket and will continue to promote and advertise in ways that we think will help drive the business."
Sirius XM is starting to experiment with promotions to customers of used cars. "The company is now old enough that we're beginning for the first time to see sizeable amounts of factory-installed satellite radios [in cars] that are traded in and sold, and now we're very much interested in remarketing to get the next car owner to subscribe as well," Meyer said.
It is working with Car Max and AutoNation and with certified pre-owned dealers. "We're looking at ways to direct market to consumers of those used cars to offer them a tryout. We've developed a lot of approaches and we're out testing several of them now. This is going to take several months to evaluate."