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The Sonos Way of Doing Business - ResidentialSystems.com

The Sonos Way of Doing Business

Put yourself in the shoes of the companies with which you do business—there is surely a reason they are doing what they are doing. You’ll also have to change, just the way these companies are changing.
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As many of you know, I’ve been a bit of a Sonos basher over the years. I railed against them for putting integrators second, for thin margins, and for not integrating with other products we use (control systems mainly). I carried other brands, but clients knew Sonos and asked for it by name. I would have to work hard to convince them to try an alternative product, and one that often lacked something Sonos offered, such as a music service the client loved or the ability to add a zone later even if the wiring was run.

Mark Feinberg of Home Theater Advisors is a huge Sonos supporter and continually chirped in my ear about the good things they do for our industry. As a result, I have started to look at the company with a fresh set of eyes. Look at how we all run our businesses—what are our main goals? Typically it is some combination of revenue and profit maximization and customer satisfaction. Looking at manufacturer businesses through that lens has made me more aware of why companies do what they do.

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The latest family of products from Sonos. 

At CEDIA EXPO last year, we all saw or heard about the new products from Savant and Control4. Many in the press called out how these new interfaces empowered the end user more, and a few even talked about how it could go direct to consumer. The D-to-C model scares the bejesus out of every integrator I know, and the immediate reaction is “they’re just going to destroy their business, we’ll never buy from them again.” What you need to remember is that there are dozens of people inside that company making that decision, from the CEO and CFO to the marketing, finance, and strategy departments. They run models and do analyses to try to figure out how to maximize revenue and profit and increase customer satisfaction (either end-user or dealer). If, in their estimation, they can go direct to consumer and grow their business, they will make that decision every time—just as most, if not all, of you would do to grow your business and make your customers happier.

I’m sure most of us have made decisions for our business that clients or potential clients have thought unwise, but we did it for the best interests of our business. How many of you have turned down jobs because they were too small? You did that because for your business to grow, you need larger jobs that last longer so you can better utilize your staff. But for the clients who want a soundbar attached to their TV, they are frustrated with you and vow to never do business with you again, especially when they do that full renovation of the media room they’ve been saving up for.

So all I’m saying is to put yourself in the shoes of the companies with which you do business—there is surely a reason they are doing what they are doing. You’ll also have to change, just the way these companies are changing. You’ll need to figure out new business models, get involved in new categories of business (from outdoor lighting, to networking, to shading) and carry brands you didn’t otherwise think you would.

As for my relationship with Sonos, I am starting to come around. I understand why they make many of the decisions they make. They are a now a $500 million company. I’d be thrilled beyond belief to be five percent of that size. They do a great job of holding the retail price of their product, without any online discounting; their tech support is incredible; and they make a super reliable product. And based on a job posting on their website, it looks like they may be looking to hire a senior software engineer to work on an API. This was in the job posting (full posting available here): 

“As a Senior Software Engineer on the Player Services Team, you will be responsible for developing and maintaining the industry’s most innovative set of application programming interfaces and firmware services for allowing Sonos proprietary and third-party applications to unlock the power of Sonos’ modern audio platform.”

I sell several products that are even less invested in our industry and provide zero percent margin. Apple TV comes to mind. I love the Apple TV and spec it into almost every install. But I make zero dollars every time on the hardware sale. At least Sonos offers some margin and has a structure to interact directly with dealers.

From the way Sonos has operated in the past and what it looks like they are doing for the future, they are doing what is best for the company, and now that includes what will hopefully be an open API. I am a big boy and can admit when I am wrong; right now it looks like I may have been wrong about Sonos. If there is indeed an API coming, I will be on board with carrying the brand and giving my clients a product they ask for by name.

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