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

Listening to customers

Even as its harnessing data on its customers, Sonos has to be mindful of how it uses these insights in product innovation, marketing and design. Pederson stresses the company’s commitment to not monetising customer data.

“We have loads of data because it’s a system that reports back to the mothership, but we use it to improve the experience,” he says, noting key data sets include listening hours, engagement rates, and which rooms speakers are situated in, as well as how consumer name their speakers.

In one instance, a rise in speakers being registered as ‘bathroom’ led Sonos to create a humidity resistant product better fit for purpose. More recently, the company changed the user experience interface in its customer app because it found users were not getting to music fast enough.

“One of our key KPIs is speed to music. We just want you to listen to great sounding music and try to eliminate any friction slowing down someone’s ability to get music in their house,” Pederson says. “That’s why voice is so important – if you utter it and you’re listening to the music right away, that’s ideal. So we made changes to the UX in order to speed up access to music.

“From a CRM point of view, our customers are incredibly loyal and vocal… We consistently see word-of-mouth from a Sonos owner as the number one purchase driver. We listen to feedback quickly, obsess over it and make changes to product, services and app based on it.  

“When we get the best of the best stories back from customers, we’ll hold them high internally. They become inspirational for the team and a validation that the strange choices we make as a business at times are the right ones.”

Read more: Sonos' approach to customer experience

Marketing mix

Complementing this is what Pederson describes as the brand’s commitment to authenticity in marketing. By way of example, he highlights a recent collaboration with the Beastie Boys on a limited edition speaker design.

“This little energy marketing moment was great. But it’s not like we knocked on the Beastie’s door and asked them to do it. We have had a relationship with their management almost since founding our company,” he says. 

Nevertheless, the marketing mix has had to change, and Pederson admits Sonos was “very traditional for a very long time”.

“Then everyone was striving to invest in digital marketing and we probably over-rotated,” he says. “We’re now we’re pulling back to a more balanced marketing offence, whereby with the long-term efforts, we’ll absolutely use traditional media such as outdoor and print. It’s what premium brands do. Then we’ll balance with short term.

“But digital is also changing rapidly. It was once viewed as this highly measurably, fairly effective thing from a cost perspective. Yet there is a reason these tech companies are making so much money – they’re slowly but surely ratcheting up the cost of advertising on their platforms. So it’s still part of the mix, we see just as much value in things like outdoor and online video.”

Given its consumers tend to be “connoisseurs of culture”, Sonos also has an emphasis on streaming TV offerings such as Netflix and Hulu, along with podcasts. “All of this comes back to that authenticity effort,” Pederson says.  

“Our ultimate priority is maintaining our premium-ness. The more partners we work with, the more risk for the brand to turn up in unanticipated ways. We work really hard to maintain that premium position, from how we go to market, to media selection. We’re vocal internally about that.”

Subscription-based offering

Meanwhile, innovation remains the game of the game. Just last month, Sonos announced a trial of a ‘Flex subscription-based speaker services in the Netherlands, a three-tier program allowing consumers to rent select products on a monthly basis.

“We launched with the objective to just see what would happen and what we could learn,” Pederson says. Sonos was inspired by Netherlands bike company, Swapfiets, that’s taken the market by storm.

“We also knew that with a younger demographic, this phenomenon was taking hold very fast. We saw it as an opportunity to test and learn,” Pederson says.  “Like everything we do, we’ll do this very pragmatically, testing different models, and we’ll learn as we go.”  

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