Have Sirius XM’s Sales & Marketing Investments Been Effective In Bringing New Customers?
The money Sirius XM pours in to sales & marketing is intended to draw the attention of customers, which are subscribers and advertisers. The satellite radio company is expected to increase its sales & marketing spending by 17% between 2014 and 2017, which should ideally lead to a growth in customer base and eventually, revenues.
However, during the period, subscription revenue generated per dollar spent on sales & marketing is likely to fall 2% due to an estimated 9% decline in the number of subscribers added for every dollar invested in sales & marketing. Sirius XM cannot expect rapid growth in the number of subscribers since it is nearing a base of 30 million paid users. And this essentially explains the fall in the number of subscribers added every year despite a notable rise in sales & marketing expenditure.
On the other hand, investments in sales & marketing are working well in attracting Sirius XM’s other form of customers — advertisers. Between 2014 and 2017, advertising revenue generated per dollar spent on sales & marketing is expected to increase by almost 40%. However, the figure (just 35 cents) remains much lower than the corresponding figure of subscription business ( $10.50).
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Have more questions about Sirius XM? See the links below:
- What’s Sirius XM’s Revenue & Earnings Breakdown In Terms Of Revenue Sources?
- What’s Sirius XM Fundamental Value Based On Expected 2016 Results?
- How Has Sirius XM’s Revenue Composition Changed In The Last Five Years?
- By What Percentage Can Sirius XM’s Revenues Grow Over The Next Three Years?
- By How Much Can Sirius XM’s Subscription Gross Margins Expand By 2020?
- How Much Revenues Can New Sirius XM Subscribers Add By 2020?
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