How fast can one company lose customers?

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According to Shelly Palmer at imediabytes, Sirius/Xm Radio lost $36 million in Q1. And that’s nothing. It lost 400,000 customers — which I’m thinking is more customers than Johnson & Johnson lost back in the 1980s when someone started putting cyanide in its Tylenol products. siriusxm_siriusI mean, 400,000 is a mid-size city. It’s a lot of customers. I’m not sure you could get rid of customers that fast if you paid telemarketers to call them up at dinner time and swear at them.

And if you’re the folks at Sirius/XM, it’s the kind of number that puts you into a full-blown panic attack. When you lose 400,00 customers in 3 months, you start asking questions like, “Are we doing the right thing here?” and “WTF?”

My personal experience is that I had been a subscriber for 2 years when I got a note from Sirius/XM in February siriusxm_xmwarning me that I would no longer be able to access programming for free on my computer unless I paid for the full year in advance right away.

It annoyed me, and I immediately assumed it was a cash-grab. But I bought the 12-month subscription because I thought it was important to me. Two weeks later I lost my job, and a week after that, in an effort to cut all unnecessary costs — and because I was irritated at being leveraged in the first palce, I called to cancel my subscription.

Their response? The nice lady with a Punjabi accent asked if they could keep me as a customer if they reduced the annual subscription rate by 50%. Now I was really mad, realizing that all along I’d been paying twice what they were willing to take. I told her no.

A month later, I got a direct-mail piece asking me to come back at 4.99 a month for six months — 38% of the original price. I suppose this was supposed to entice me. But it made me feel even more stupid for having paid $12.99 in the first place.

There’s one other thing: All along, Sirius/XM has advertised that it’s commercial-free radio, which should be worth paying for. But it’s not true. If you listen to any syndicated programming that’s re-broadcast via satellite, you’ll get the same amount of commercial time as you would on commercial radio.

And if you listen to their original programming — some of which is really pretty good — you still get advertising. And it’s the most irritating kind: low-budget stuff for whole-body cleanses and businesses that you can run from home without any skills or experience required.

I originally bought my XM subscription because I didn’t want to be my own DJ; I’d rather have someone else do it for me. But these are hard times, you know. Worst times since the Great Depression. So now, when I get in my car, I plug in my i-pod or put in an old CD. I still don’t want to be my own DJ. But I’m guessing that 399,999 other people agree with me that it’s not all that bad a job.


About the Author:

Bob Rosenbaum is founder and principal of The MarketFarm, a content-oriented strategic communications firm.

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