Friday, June 26, 2009

Sirus Finds A Way To Tap The Used Car Market

Volkswagen is now offering a three month full satellite radio package in every certified pre-owned vehicle. The main reason I love this move is because car manufacturers usually follow each other. When one comes up with a marketing scheme the others will follow in an effort to stay competitive.

Right now the certified used car landscape is the place to be. Sales of these types of vehicles have increased almost 50% in the last 8 years; mainly because genuine factory certified cars carry a bumper to bumper / power train warranty that usually extends to 100k miles.

With this news from VW it will not be long before the other major manufacturers like GM, Toyota (TM), Ford (F) etc. follow suit. By creating an already active subscription in used cars, it will significantly increase subscriber numbers by retaining the percentage of people continuing with the subscription; similar to the retention percentage in the new car market. The current estimate of factory certified pre-owned vehicles is approximately 1.6 million per year.

This is a solid step for Sirius to move beyond the shackles of the new car environment and turn on those inactive radios. What would also be a good idea is for Sirius to roll out a campaign and give current used car owners with inactive satellite radios the same three month trial. In 2008, approximately 30% of new cars came with satellite radios. In 2009 that figure has jumped to 50%. It won’t be long before these cars become part of the used car market and give Sirius the opportunity to recycle the radio subscriptions to another owner. Go Green indeed.

It is very encouraging to see that Sirius is taking measures to step beyond the “same old same old” and look for creative avenues to increase customer retention and revenue. Alright, maybe this used car idea isn’t exactly a major epiphany. It’s more like a “duh huh” why didn’t they do this sooner? But hey no one can say an effort is not being made. In the pipe dream hopes of avoiding a reverse stock split, I truly hope that Sirius continues to boost their exposure as much as they can. Hey, it’s my delusion, don’t step on it.

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