The existential brand crisis that saw Sonos go into co-opetition with Amazon and Google

Wireless speaker company's VP of marketing reveals the existential crisis that saw the business overhaul its go-to-market strategy and seek out partnerships with the digital tech behemoths that could crush it

Pete Pederson
Pete Pederson

Wireless speaker producer, Sonos, doesn’t have a chief marketing officer. Nor has it had one for nearly two years.

Instead, the company has a triumvirate of experienced leaders overseeing its brand and marketing needs. One of these is VP marketing and communications, Pete Pederson, who caught up with CMO during a recent visit to Sydney to discuss the brand’s existential crisis and evolving go-to-market strategy in the face of voice-activated devices and the digital behemoths behind them.

As Pederson explains, Sonos has three people occupying the CMO office: A VP of brand, with a strong creative bent; himself, the VP of marketing; and a VP of product marketing, who by account, “is more internal-facing than anything else”.

“The role of the CMO almost a misnomer in most companies; these individuals tend to skew in one of those three ways. They inherit the title even though they need lots of people around them to do different things,” Pederson claims.

“Given our size, we skipped that step and agreed the three of us can work together on those responsibilities. If you were advising Sonos from the outside, you’d look at this three-in-a-box approach and think it was weird.

“I’ll be honest – it took us a while to work out swim lanes, make sure we knew which direction the other guy was going to go. But as we sit here today it’s working fabulously well.”

Pederson agrees it’s all too easy for marketers to get caught up in the tactical realities of business and forget to care for the brand. Sonos’ marketing trio are constantly in conversations about balancing short and long term.

“Our brand team has quite intentionally separated so they can focus on the brand, build it in a highly premium, curated way. Then it’s my job to figure out how it translates to retail execution in Australia, working with leading teams,” he says.  

“It does create tension sometimes, but it’s good, healthy tension. What it means is these guys can really focus on building and maintaining the brand. It’s the jet fuel the rest of us need to perpetuate in local markets.”

As you might expect, these debates extend to the challenge of demonstrating impact. “Like every company, we have endless debates about measurement,” Pederson admits.

“We finally got to a place where we’re very clear on what we’re trying to do as a brand and marketing team. The c-suite is all signed up to that. And we don’t measure a lot of things.

“We’re focused on building brand awareness long term. It’s the one big KPI. Short-term stuff is still important, on a ROAS goal and we hold everyone accountable to that. That’s kind of it.”

Go-to-market crisis

Gaining clarity has taken time, and was arguably born out of what Pederson describes as an “existential moment” for Sonos in terms of market positioning and ambitions.

The catalyst? The arrival of voice-activated speakers from digital giants, Amazon, Google and Apple.

“For 15 years, we innovated the wireless home speaker system space. We didn’t have a lot of competition and enjoyed almost unprecedented latitude,” Pederson explains. “When Amazon, Apple and Google crashed into this space, it was a big wake-up call. We hadn’t invested in voice technology or really had to deal with competitors.

“We had to take a deep breath and figure out how we use our relatively modest size as an advantage to compete with much larger tech behemoths that can outspend and outmanoeuvre us. They can flood the market with cheaper goods, they own the ad platforms, and the commerce engines. These are heady challenges.”  

The solution was to join forces with both Google and Amazon. “Not only do we have their services on our platform, including voice, we collaborate closely in building market share for their services and our products,” Pederson says.  

“You have to be careful – they are competitors and collaborators, so we’re playing a constantly careful dance with players 150 times our size.”

What Pederson says distinguishes Sonos, and what he and the rest of the marketing and brand function is working diligently on, is building premium product quality credentials and premium audience.

“That crisis moment galvanised our positioning as a premium brand. We knew we couldn’t compete at the low end of the market. Nor do we want to. We went the other way,” Pederson says. “As a premium brand, design then became very important, as did the aesthetic, ease of use – these things weren’t just ideas, we worked hard as a brand team to drive them into the product.”  

Credit: Sonos


To date, Sonos speakers are in about 10 million households globally, and continues to grow.

“Amazon and Google in particular wanted Alexa and Google Assistant in those households. So it’s a symbiotic relationship in many ways,” Pederson says. “These guys have grown the pie for everyone and introduced consumers to the idea of asking for music with their voice. Once consumers get a taste of that experience, they see it is fantastic yet recognise the sound quality is so poor. That’s an upgrade opportunity for Sonos.”

According to Pederson, Sonos’ commitment to be an “awesome sound experience company” helps the business stay grounded in what it’s really trying to achieve.

“With Cambridge Analytica and all the privacy concerns today, we don’t have a dog in that fight. We’re not interested in monetising the user, we’re interested in one thing only: Presenting people with an awesome listening experience,” he says. “And we’re very much an experience company. Every conversation is around what is the right consumer experience and how do we make it better.”

Sonos of course continues to perch on a precarious ledge between Amazon and Google, who compete against each other. “It’s a big one – not irritating Google by doing a co-branded initiative with Amazon and vice versa,” Pederson says.

“But again, since our starting point is so different, we can play a neutral, almost Swiss role in the industry. We’re not a threat.”

Ikea partnership

Sonos’ partnership plans continue. Six months ago, the company struck a collaboration deal with Ikea, producing the Ikea Symfonisk table lamp and bookshelf Wi-Fi speakers. Pederson says this has given Sonos access to the 1 billion people passing through Ikea stores annually.

“It has also expanded our geographic footprint into places like India, for example, and consumers there are having their first experience with our platform via Ikea,” he says. “A trend that’s been true almost since we started as a business is when you buy a Sonos, you tend to buy more Sonos. These things are incredibly sticky. It’s a great experience when you have multiple devices in your house.

“When a consumer buys at Ikea, they become our customer. We have a magic window where we’re communicating directly via our app. It’s a huge CRM and upselling opportunity. We’re seeing that happen.”

The next horizon for Sonos is finding regional partnerships, particularly across markets such as China, India and Japan. “We’ve had to let go of some control, but that’s OK. As we scale, partnerships will be key,” Pederson says.  

Today, 100 music services exist on the platform, and Pederson says it would love to see all voice assistants on its devices.

“You can see a path to one day having a Chinese voice, or one of these smaller voice services that’s more privacy focused, on the platform. There are a lot of ways we can go since our approach, by design, is open and welcoming,” he says.

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