I purchased a new vehicle recently. Like most vehicle manufacturers, Honda (NYSE: HMC) has a deal with one of the two satellite radio services, in this case XM. For those of you who haven't been living under a rock, former competitors Sirius (NasdaqGS:SIRI) and XM were allowed to merge a year or so ago, and while they still support the two incompatible services, they are, or at least should be, operated as one company.
When it comes to content, lots of merging has already taken place. Some content (especially sports) is available only on one or the other and some (like Howard Stern) is only part of the basic package on one of the services, but not both. Some of the channel lineups aree different as well. These oddball differences are mostly the result of pre-existing contracts and in all likelyhood will be resoved when the contracts are renewed or renegotiated in the coming years.
But operationally the merger is a disaster. I know, because I've just recently had to deal with the customer service operations at both services, because my previous provider was Sirius and I needed to switch to accommodate the new vehicle.
You would think that with both companies under the same roof, you'd be able to easily switch from one the the other. But you'd be thinking wrong. There is no way to switch to the "other" service offered by the same company and no way to have an account that covers receivers on both, which means that to have two receivers with the "multi radio discount" I had to replace a perfectly adequate home receiver that has been connected to my stereo system for a couple of years. To me, the changeover has involved nothing but waste and annoyance.
The only way to switch from Sirius to XM is to cancel the service replace all extra receivers you may have, and start a new one subscription with all new receivers on the other service. Fortunately, I'm past my 1 year subscription period on Sirius so I could easily cancel and get a pro-rated refund. Easy being a realtive thing as signing up for the service can be done in seconds on a website, while cancelling requires long waits and talks to a customer "service" representative. But even after explaining the situation to the CSR at Sirius, I had to listen to the scripted explanation about why I should continue my subscription on a car that I no longer owned, switch to an internet-based subscription, etc. It was like I was talking to somebody who could read, but not comprehend, English, because no matter how many times I tried to be nice, telling him that I would still be a customer of his company just using the other service, I could not get him to stop. I finally had to be rude, told him I was not interested, asked him if the cancellation was completed, then hung up.
Today I got my third call from another Sirius CSR, asking me to renew the subscription associated with the receiver affixed to the car I no longer own. The previous calls were disastrous, and I hung up on both of them. Again, guys who were reading from a script from which they would not deviate, apparently unaware that when I said "I have a new car with XM so I had to switch" it meant that they were not going to get me back to the Sirius side of the house, no matter what and that in fact I was paying them more money now than I was before so they shouldn't even try!
This latest CSR seemed to comprehend and said she'd note it on the account. Hopefully the calls will stop but I'm not sure. It's like the Sirius people don't even know they are part of the same company as XM and vice-versa.
All of which begs the question, why is this all so fucked up?
Government meddling is probably part of it. As part of the deal allowing Sirius and XM to merge the company had to commit to operating both services and supporting existing receivers for a decade. In the execution, this seems to have translated into "let's merge all the content producing and advertising, but not merge the sales, service and operational aspects of the company."
But beyond that, I just don't think this company has a clue how to operate. The "home cradle" for my new portable receiver has been unavailable for months. The internet radio option was unavailable on the subscriptions menu on the weekend I was trying to sign up, and I had to make three calls to customer service before being told "oh, yeah, it's in maintentenance, try later." The websites are poorly laid out and important information is hard to find. There isn't even a FAQ or any other information designed for customers whose vehicle changes are causing them to switch, which seems like something that somebody somewhere would have considered.
When things are that screwed up, I tend to look for the problem at the top.
Mel Karmazin is a very successful old-time radio guy. He's sold advertising, hired talent (including Howard Stern) and consolidate radio operations at Infinity Broadcasting before it was purchased by Viacom. He's done a good job of recruiting and retaining talent and obtaining financing for Sirius-XM and shepherded through the merger of the two companies.
But in running traditional radio stations, he's never had to run a customer service operation. He's never dealt with millions of subscribers, he's never been in the electronics retail business. As CEO of Sirius, he should be moving those things high up on his list of priorities because it's a lot easier to keep a customer than to find a new one.
Karmazin may be a great radio guy, but from this customer's perspective, he's failed at everything about Sirius-XM that falls outside the sphere of traditional radio management. Unfortunately, his "supporting staff" don't add much there either. Nobody at the senior management level has any experience with a customer-facing subscription-based service operation. The focus of the board of directors clearly seems to be on relationships with the car makers. That gets radios in the cars, but does very little to help the customers stick with the service.
Sirius-XM is already foundering due to the billions of dollars of debt that was taken on to launch their satellite networks -- debt that their new internet-based competitors don't have -- and the fact that Stern will likely retire at the end of the year or demand a king's ransom to stay. Most of these factors are out of their control, but the lousy customer-facing operation is not. I've listened to Stern for most of the past 20 years, yet the hassle of dealing with these guys almost made me chuck the whole thing.
I can't be the only one.
mg
