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Please read the following case and answer the questions that follow:

SiriusXM Attracts and Engages a New Generation of Radio Consumers with Data-Driven Marketing

SiriusXM Radio is a satellite radio powerhouse, the largest radio company in the world with $3.8 billion in annual revenues and a wide range of hugely popular music, sports, news, talk, and entertainment stations. The company, which began broadcasting in 2001 with 50,000 subscribers, grew to 18.8 million subscribers in 2009, and today has nearly 29 million. Much of SiriusXM's growth to date is rooted in creative arrangements with automobile manufacturers; today, nearly 70% of new cars are SiriusXM-enabled. Yet the company's reach has extended far beyond car radios in the United States to a worldwide presence on the Internet, on smartphones and through other services and distribution channels, including SONOS, JetBlue, and Dish.

Business Challenge

Despite these remarkable successes, over the past few years changing customer demographics, changing technology, and a changing competitive landscape have posed a new series of business challenges and opportunities for SiriusXM. Here are some notable ones: As its market penetration among new cars increased, the demographics of the buyers changed, skewing younger, with less discretionary income. How could SiriusXM reach this new demographic? As new cars became used cars and changed hands, how could SiriusXM identify, engage, and convert second owners to paying customers? With its acquisition of the connected vehicle business from Agerothe leading provider of telematics in the U.S. car marketSiriusXM gained the ability to deliver its service via both satellite and wireless networks. How could it successfully use this acquisition to capture new revenue streams?

Proposed Solution: Shifting the Vision toward Data-Driven Marketing

SiriusXM recognized that to address these challenges it would need to become a high-performance, data-driven marketing organization. The company began making that shift by establishing three fundamental tenets. First, personalized interactionsnot mass marketingwould rule the day. The company quickly understood that to conduct more personalized marketing, it would have to draw on past history and interactions, as well as on a keen understanding of the consumer's place in the subscription life cycle. Second, to gain that understanding, information technology (IT) and its external technology partners would need the ability to deliver integrated data, advanced analytics, integrated marketing platforms, and multichannel delivery systems. And third, the company could not achieve its business goals without an integrated and consistent point of view across the company. Most important, the technology and business sides of SiriusXM would have to become true partners to best address the challenges involved in becoming a high-performance marketing organization that draws on data-driven insights to speak directly with consumers in strikingly relevant ways. Those data-driven insights, for example, would enable the company to differentiate between consumers, owners, drivers, listeners, and account holders. The insights would help SiriusXM understand what other vehicles and services are part of each householdand to create new opportunities for engagement. In addition, by constructing a coherent and reliable 360-degree view of all its consumers, SiriusXM could ensure that all messaging in all campaigns and interactions would be tailored, relevant, and consistent across all channels. The important bonus is that more tailored and effective marketing is typically more cost-efficient.

Implementation: Creating and Following the Path to High-Performance Marketing

At the time of its decision to become a high-performance marketing company, SiriusXM was working with a third-party marketing platform that did not have the capacity to support SiriusXM's ambitions. The company then made an important, forward-thinking decision to bring its marketing capabilities in-houseand then carefully plotted out what it would need to do to make the transition successfully. Improve data cleanliness through improved master data management and governance. Although the company was understandably impatient to put ideas into action, data hygiene was a necessary first step to creating a reliable window into consumer behavior. Bring marketing analytics in-house and expand the data warehouse to enable scale and fully support integrated marketing analytics. Develop new segmentation and scoring models to run in-database, eliminating latency and data duplication. Extend the integrated data warehouse to include marketing data and scoring, leveraging in-database analytics. Adopt a marketing platform for campaign development. Bring all that capability together to deliver real-time offer management across all marketing channels: call center, mobile, Web, and in-app. Completing those steps meant finding the right technology partner. SiriusXM chose Teradata because its strengths were a strong match for the project and company. Teradata offered the ability to: Consolidate data sources with an integrated data warehouse (IDW), advanced analytics, and powerful marketing applications. Solve data latency issues. Significantly reduce data movement across multiple databases and applications. Seamlessly interact with applications and modules for all of the marketing areas. Scale and perform at very high levels for running campaigns and analytics in-database. Conduct real-time communications with customers. Provide operational support, either via the cloud or on-premise. This partnership has enabled SiriusXM to move smoothly and swiftly along its road map, and the company is now in the midst of a transformational, 5-year process. After establishing its strong data governance process, SiriusXM began by implementing its Integrated Data Warehouse, which allowed the company to quickly and reliably operationalize insights throughout the organization. Next, the company implemented Customer Interaction Managerpart of the Teradata Integrated Marketing Cloud, which enables real-time, dialog-based customer interaction across the full spectrum of digital and traditional communication channels. And, SiriusXM will incorporate the Teradata Digital Messaging Center. Together, the suite of capabilities will allow SiriusXM to handle direct communications across multiple channels. This evolution will enable real-time offers, marketing messages and recommendations based on previous behavior. In addition to streamlining how they execute and optimize outbound marketing activities, SiriusXM is also taking control of their internal marketing operations with the implementation of Marketing Resource Management, also part of the Teradata Integrated Marketing Cloud. The solution will allow SiriusXM to streamline workflow, optimize marketing resources, and drive efficiency through every penny of their marketing budget.

Results: Reaping the Benefits

As the company continues its evolution into a high-performance marketing organization, already SiriusXM is benefiting from its thoughtfully executed strategy. Household-level consumer insights and a complete view of marketing touch strategy with each consumer enable SiriusXM to create more targeted offers at the household, consumer, and device levels. By bringing the data and marketing analytics capabilities in-house, SiriusXM achieved the following: Campaign results in near real-time rather than 4 days, resulting in massive reductions in cycle times for campaigns and the analysts that support them. Closed-loop visibility allowing the analysts to support multistage dialogs and in-campaign modifications to increase campaign effectiveness. Real-time modeling and scoring to increase marketing intelligence and sharpen campaign offers and responses at the speed of their business. Finally, SiriusXM's experience has reinforced the idea that high-performance marketing is a constantly evolving concept. The company has implemented both processes and the technology that give it the capacity for continued and flexible growth.

Questions:

1. What does SiriusXM do? In what type of market does it conduct its business?

2. What were the challenges? Comment on both technology and data-related challenges.

3. What were the proposed solutions?

4. How did they implement the proposed solutions? Did they face any implementation challenges?

5. What were the results and benefits? Were they worth the effort/investment?

6. Can you think of other companies facing similar challenges that can potentially benefit from similar data-driven marketing solutions?