Master Class- Alan Binder's Leap of Faith
Now there are those who are wondering about monthly fees. In mobile electronics we are all familiar with satellite tracking. A lot of people want satellite tracking. So you tell the customer about how they can track their vehicle on the Internet or have it monitored by a station, and they get excited about that. The tracking system's $700 to $900 initial hardware cost is acceptable. However, when the customer is told about a monthly monitoring fee, ranging from $9.95 to $29.95 a month, it often kills the deal. They don't want to pay that because they don't think that they're getting any value for that. On the opposite side, with XM radio, customers don't mind paying the monthly fee because they make the analogy to cable TV. They are used to paying for cable and they know they are getting a service. You're getting something for it, whereas with tracking someone is monitoring your car but it's like insurance, you don't feel like you're getting any tangible value for it. But with satellite radio there's a hesitation with paying for the up-front capital investment. That's the difference. They think, "I've already got a radio in my car." That's the sales challenge for satellite radio.
Training a sales force for this task takes little time. All of my salespeople have been in this business at least 12 or 13 years, so they're dedicated individuals, dedicated to this business. Satellite radio was a simple one to train them on. Any experienced salesperson should have no problem folding this into the mix. The installers should have no problem either. For me, satellite radio installation is very akin to mobile phone installation. You've got the receiver for the mobile phone which is equivalent to the receiver for the XM satellite radio and then you've got an antenna. If you are doing an FM modulated system, you've got to put the little display up front, which is like trying to find a place to put the phone, but there's no real challenge to that sort of thing.