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Could Sirius Do A Better Sales Job?

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When Sirius XM (NSDQ: SIRI) announces its earnings before the market opens Tuesday, analysts will be looking for financial results; the subscriber numbers were pre-released weeks ago with improvements in every key area, including converting trial subs to paying. But could that 45.2 percent conversion rate be even better if the satellite radio company improved its sales style? And could it be worth more?

As mentioned here before, my household has been on a six-month new car trial and has to decide soon whether or not to re-up. The first effort (and so far the only one) from Sirius to get us to do just that arrived a few days ago: a plain, white letter with a format mixed between bill and offer, along with a card listing the 130 radio channels in the basic package. Twelve months for the price of 10 ($129.50) or 24 months for the price of 19 ($245); monthly ($12.95) or quarterly ($38.85). So far, so good.

The primary goal seems to be renewing the current deal, and given that what Sirius needs first and foremost is that conversion, it’s not a bad one. But it’s also missing chances to entice our renewal with a service upgrade and to add us as users outside the car. No mention of the “Best of XM” package unless you get to the bottom of the channel listing. (The Sirius Everything+Best of XM package, available only on some radios, runs $16.99.) No effort to upsell to an online subscription, say something like sign up now and get online, usually $2.99 a month, for $1 month or the like. No mention of the iPhone app. You have to know about those last two by osmosis, look for packages online or call. Log in to handle it online, nothing changes. No incentive to upgrade.

There’s also no effort to let potential subs know there are cheaper options, including a family pack ($11.95) and a la carte.

The fine print: The letter said to respond by May 9 to get the renewal offer; the fine print said it was good through May 24. The really fine print says month-to-month can only be done over the phone, not through the form. That’s also the only place a prospective subscriber hears anything about the music royalty fee, with no mention that it adds $1.98 a month to the standard $12.95 — which means the price you’re seeing isn’t the price you’ll be paying. (‘Free’ months don’t incur a royalty.) There’s also a threat of a $2 fee every time you get a paper invoice.

Sirius has made tremendous improvements in the last year, aided by some financial stability courtesy of a key investment by Liberty Media (NSDQ: LINTA). It even stayed above $1.00 enough days in a row last month to avoid being delisted by Nasdaq. I’m not sure why its direct marketing is stuck in the last decade.

Earnings preview: (NSDQ: TSCM) has a good roundup of analyst expectations. Thomson First Call analysts estimate $671.32 million for revenue with even earnings per share.

8 Responses to “Could Sirius Do A Better Sales Job?”

  1. I think they could save alot of money by dumping Oprahs contract.That would free up money for Howard.I just don’t believe Oprah is a must have option,that brings subscribers like Howard.

  2. bob griffith

    I am such a great supporter of siri/xm so the conversation comes up again and again. LOTS of friends told me they liked it but their subscription expire because no one pursued them. Amazinng. I always thought their vp of marketing was under qualified.
    Not to mention, of course, the 25 MILLION 2nd owner Satellite Radio equipped cars whose owners have never been approached by Siri via TV or print media to try the radio that’s sitting in theri dashboards.

  3. michael

    Why isn’t life time subs ever brought up?thats the deal,plus u can transfer 3 times for 75.00,how many cars will U have in your life?In fact the dealers should offer it in the buy of a new car,and get it on the back end,oh well just a thought…………..

  4. stace nice job great read but i gotta phone call from xm they never mentioned lifetime sub or best of sirius i had to ask.mark just anti up already the stock price should have ben enough to get your attention.

  5. I agree completely with your assesment of Sirius’ marketing. I am an ex Sirius customer with 3 multi year paid subscriptions that have all now expired due to a move and a credit card change. I intend to renew them but the only time I remember is when I check my snail mail box once a week to throw away all the junk mail. All I have received is the same form letter/bill on each account and have complained to my friends that as a shareholder of this company I am very disturbed by the lack of effort on the Company’s part. Had a representative actually called me and brought it to my attention, Sirius would have picked up 3 more subsriptions on the spot.

  6. vaporgold

    I hope the marketing dept.of SiriusXM reads this article you wrote. You brought up a couple very good points. The upsale to the Best of Everything and the less expensive Family Pack option. There is an option for every budget, and it should be very easy to Choose which plan is right for each consumer and very simple to purchase that plan.

  7. with what i understand is conservatively 1.5-2m subscribers self-identifying as listening to stern and stern only, representing revenue streams of 216m at a minimum (1.5m x $12/month) i’d say re-signing howard is as big a priority as any

    • Staci D. Kramer

      I would agree although I’m not so sure about your numbers. It won’t
      affect my decision whether or not be a subscriber but Howard does have
      a significant fan base that Sirius needs.