Satellite Radio and the Customer “Experience”

You don’t buy “stuff” you buy what that “stuff” does for you.

Increasingly, tech players are taking a page from Apple and learning that it’s not about the gadget, it’s about the whole experience of using that gadget. Technology is no longer the widget business – it’s the experience business.

This, for example, is one reason why satellite radio doesn’t even try to dazzle with its gadgets anymore. It’s one reason why nobody wants to buy an HD radio. It’s one reason why I keep buying new iPods – the Zune doesn’t work on iTunes!

Indeed, the iPod is a perfect, sealed, end-to-end solution that works simply and easily and reliably and integrates hardware, software, and content in a near-perfect symphony of consumer utility. You don’t pay extra for iTunes. The computer that drives it all you already own. And most of the music is already in your library, too (or available for free, thanks to the net’s dark underbelly).

What can satellite radio learn from this?

For one, they should learn that they’d capture more subscribers with a one-reasonable-price solution that gets you gadget, installation, and content – together.

Contrary to popular belief, it is NOT strictly about the content because you can’t appreciate the content until you experience it and you can’t experience it until you pay for it. In other words, to appreciate why you should be a subscriber you have to be one first. That’s ludicrous! And it’s exactly why satellite spends so much effort encouraging current subs to gift subscriptions to friends and relatives and why they invest so many dollars with the automakers to remove the need for consumers to “choose” at all.

On the retail side, there’s a big difference between “buy the radio, get three months free trial” and “buy the radio, get free installation plus 12 months free – period.” Satellite radio likes to think of itself as analogous to Cable TV. But my cable company installs the service for me – for free. I don’t have to leave my house. Nor do I have to choose between virtually indistinguishable converter boxes from a wall at Best Buy choked with cables and wires and sometimes compatible adapters and blah, blah, blah.

Recently I had a conversation with a game company that required users to download the game in order to play it. They were transitioning, I was told, to a version of the game that was Flash-formatted; that is, one that didn’t require the extra step of download and installation. The result: A helluva lot more folks playing the game.

When you remove the obstacles to the customer “experience” you reap the rewards.

I’ll talk about how this affects Internet radio later.

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