November 19, 2020
Many households are apparently booming with better audio and Sonos stock is soaring after the American wireless audio developer beat earnings expectations last quarter.
Patrick Spence, Sonos CEO, attributes the company’s success to its reliable brand.
“I really think that it's a testament to the power of the model and the system that we’ve built. Customers have known for years the power of the system and how great it is when you get one Sonos, but how much it gets even better as you get a second and a third and you add that to the system,” Spence told Cheddar.
In the latest earnings report, the company announced it raked in $340 million, beating expectations by about $40 million. It’s no secret that many industries have suffered amid the COVID-19 crisis, but Spence says his company’s focus on direct-to-consumer marketing and sales has helped in its success during the pandemic.
“We’ve been around for a long time. We’ve navigated the Great Recession. We’ve navigated many competitors trying to do what we do and work through that. We’ve navigated, now, a pandemic” he added.
Spence noted a nine percent increase in direct-to-consumer sales from last year.
Brand Loyalty Matters
Sonos was able to build on its ongoing revenue growth and brand reputation with new marketing and customer acquisition strategies. The company also invested in expanding its technical capabilities.
“Only about 20 percent of traffic coming to our website is paid, which is pretty low in the industry. So, we’ve been able to really build a brand over the last 15 years, which people know and love,” Spence said.
New product development is also in the near future for Sonos. The wireless speaker-maker looks to expand its reach to all areas of audio, according to the CEO. The company has already launched Sonos Radio, a service similar to Pandora, and has filed a patent for headphones.
For Spence, developing new products and improving customer experience is always a priority, but during the current trying times, he said the well-being of his team has become more consuming than anything else.
“When I think about what keeps me up at night it's really our people and helping support them through this pandemic because they have been just heroic in terms of delivering the kind of results that we reported yesterday and making sure we can still launch these amazing products and services, even with everybody working from home,” he continued.