New York — On Black Friday, Sirius XM will launch a trial, free “Best of Both” promotion and its first holiday advertising under a single Sirius XM banner.
The company will give consumers three free months of “Best of Both” service with the purchase of any Sirius or
XM aftermarket product. The top-tier service usually carries a charge of $16.99/month, and adds Sirius channels to an XM subscription or XM channels to a Sirius subscription at a $4 premium. The company will also abandon separate XM and Sirius ads and focus heavily this season on radio advertising, said operations and sales president Jim Meyer in an exclusive interview with TWICE.
The executive also offered several insights into Sirius XM’s outlook during this volatile period.
Meyer said the company’s sales to date of “Best of Both” subscriptions exceeded all forecasts, adding that it is too soon to tell how the lower-tier a la carte services is performing at $6.99/month.
“This is the first opportunity we’ve had to sell tiered programming. 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 $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 this week, Friday, 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. A single pointed display and single pointed ads. Also, within the retail brochures, 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 how Sirius XM perceived the recent spate of complaints from bloggers after the company adjusted its channel lineup, the satellite radio executive 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 on the Sirius side-and we’re applying that to the XM side — 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 CarMax 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 try out. 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.”