Sirius radio = fail (a rant)

So two years ago, I ordered Sirius for my car. I'd had it for free for a year and gotten hooked. I call them and end up arguing down my agent to a deal where I get two years for $100.

My subscription ran out recently. I want it back. I enjoy it. I call them, and the first person I speak to, in a thick Indian accent that was difficult to understand at times, offers me two years for something like $370. I decline and they transfer to someone in America. This person offers me two years for $240. Again I decline. I tell the woman "Look, I'm willing to pay $100 for two years, nothing more." She says she can't do that and I get another woman, a manager who sounds like she's about 100 years old. I tell her, "Look, I'm willing to pay $100 for two years of your service." She offers me one year for $100. I say, "Look, your satellite is already in space. It's already beaming a signal down to my car. I'm offering you $100 to click your mouse and unscramble that signal. That's it. There's no product for you to build. Nothing to ship. No maintenance. You click the mouse, cash your $100 and we're done."

She says she can't. I say, "Look, I've got terrestrial radio. I've got a CD player in my dash. I've got a cord that will hook my MP3 player to my stereo. I've got a cord that will hook my phone, which gets Pandora, to my stereo. I've got four free options for music, and yet I'm still willing to pay you." She says no and sticks to the $100 for one year. I say (and keep in mind, I haven't raised my voice at all. I'm trying to present this as a business transaction – if they don’t want my money, fine), "Could you explain to me, then, the economic sense behind your decision? You’re telling me you’d rather let a customer walk away when he’s willing to pay for a service you’ve already established. You’d rather have no money than $100 for something you’re already doing? You’re willing to alienate a customer when your business faces such stiff competition from so many other mediums, and you’re willing to let this customer walk knowing that he’s gonna trash your company to everyone he discusses it with, probably costing you more customers? Where is the sense in that?” Her response: “I’m not an economist, sir. I just answer calls.” So I said OK, I’m just trying to work a business transaction here. I left her my name and number and told her I’m willing to pay $100 for two years – call me back if you decide it’s worth it.

Siriusly (haha), I do not understand the Sirius business model. That company needs to look at Blockbuster, because they’re a few years behind on the same road.

 

Well you are really going to hate this then.

I had 6 months free and never renewed because of a problem with my radio. Well, radio just got fixed on Monday and all the while Sirius has been sweetening the offer.

This new offer: 2 months of Sirius radio for free, plus another 6 months of Sirius radio for a total of $19.99 plus tax. (Activation fee waived).

 

I don't hate it. Good for you. Just more proof that they're morons. I mean, it's like they're trying to go bankrupt, giving their product away free or nearly free to some people, then telling people willing to pay for it to go away.

 

Counterpoint: Why should any company sell its product at a loss just because you think it's too expensive? After all, you'd already had it free for a year.

 

Free for one year, paid for two. I see your point, Azrael, but they've gotta be able to see mine. I'm a pretty average guy. I have what I'm willing to pay. Either take that and make it work, or when enough people are like me, go out of business. And with as many people as apparently have it for free, turning away potential payees is just dumb.

 

When my Sirius radio broke a few months ago, I went online to buy a new one. I only wanted a cheap replacement and most of the cheap options were sold out. After a few days, a reasonably cheap one was available, but when I tried to order it, it wouldn't let me. I called the 800# and got a nice woman who tried to talk me out of the cheapie - the quality is bad, etc. She ended up giving me a more expensive (and according to the website, sold out) model for cheaper than the cheapie price and threw in a discounted 3 month subscription on top of free shipping and a AAA discount. The kicker was that I had to cancel the old subscription, because she was giving me new subscriber rates. I canceled and all was fine until I started getting calls from their retention department asking me to reconsider canceling. That was annoying.

I'm waiting to see if Stern re-ups or not. If he doesn't, I'll likely cancel. I like Sirius for the most part, but since the merger it seems more programmed than it used to be and the playlists don't seem as deep as they used to be.

 

I had Sirius, dropped it about a year ago. Then I received a letter from a collection agency saying I owed Sirius money. Strange seeing as I paid for two-years of service up front. When the time was up, they called, I said I did not want to renew and it was shut off. It's not a lot of money, but it's more the principle. Basically I'm getting charged for a service I didn't know I had and didn't even use.

 

At any given point in time, RS, there are going to be many, many, many people receiving free Sirius service in the hopes of roping them in as regular customers. That's a cost of doing business, like advertising. I'm not sure what the company would consider a successful conversion rate once the free offer expires. 5% become subscribers? 10%? 40%?

Once in the system, however, those people have to pay enough to cover the actual costs of receiving the service.

You offering to pay less than it costs them to provide you the service makes a lot less sense than cutting you loose entirely and waiting for a new subscriber who'll actually pay what they need.

 

A similar thing happened to me. I had XM for a few years and canceled it when I bought a vehicle equipped with Sirius. About a year after I canceled the XM, I found a $120 charge on my card for a renewed subscription. I called and finally got them to cancel the account and refund the money. That was a little over a year ago. Then, a couple weeks ago, I find yet another $120 charge from XM on my account. I call there and they explain that after I got my refund last year, I was supposed to call a second number to VERIFY MY CANCELLATION. They then refunded me again and at least this time told me the number I needed to call to verify my cancellation.

Really, this is a terrible business model and it makes me wish I didn't harbor a lifetime love for all things Bruce Springsteen and grow up listening to Bubba the Love Sponge and Howard Stern. Otherwise I'd cancel in a second.

 

So who wins, the macro or the micro, because that's the difference. From the macro, you're correct, if every paying customer paid less than cost, they'd fail. But from micro, they just turned away what was essentially free money. It's not like by my not ordering, they don't have to produce my one product and ship it, so they've saved themselves the money of having to do that. They just told me they don't want my money, almost literally.

 

You were offering them $50 a year? That's what? $4.16 a month?

Other than a la carte programming, their cheapest package starts at $9.99 a month.

Why would they want you as a customer? You're not worth the trouble, and you're costing them money every time you turn on the radio.

So that $4.16 a month isn't found money - it's a drag on the books of $5.84 a month.

 

I agree with this. There's also the valid point that if one guy starts getting it for $100 for two years and talks about it on the Internet, you suddenly have everyone haggling for the same deal. I'm surprised you were able to barter with them as much as you did, actually; it strikes me as desperate on their part that they'd even budge a bit on the price.