Speakers:
- Vijay Chittoor: Co-Founder & CEO, Blueshift
- Mike Clem: Chief Growth Officer, Sweetwater
Q: What is Sweetwater and What is Your Passion for Music?
Vijay Chittoor: Good morning, Mike. I think many people in the audience know what Sweetwater is, but tell us maybe one quick line on what Sweetwater is. Also, tell me a little bit about your personal passion for music. Sweetwater is a brand known as the go-to destination for people passionate about music, so I want to know how your passion drives you as a leader every day.
Mike Clem: Sure. My background is in engineering and computer science, but I'm also a lifelong musician. For me, Sweetwater is the way to bring those two passions together. I've been with the company for 19 years.
Sweetwater is the largest online seller of musical instruments. We provide any audio or video solution for creators—things you would see on stage at a concert, from the instruments to the speakers, microphones, mixing boards, and lights. We're a 43-year-old company based in Fort Wayne, Indiana, with about a billion and a half in sales and 9 million customers. Our customers range from beginning to pro musicians, as well as churches, schools, recording studios, and NFL stadiums. It's a very wide spectrum of customers.
The most interesting thing to know about Sweetwater is that we're not a pure-play e-commerce seller. Our sales motion is very unique: it's consultative and relationship-based. The heart and soul of our company are our 600 sales engineers, who have an incredible pedigree in music. They go through 13 weeks of training before they ever interact with a customer. We call it "Sweetwater University." These are true experts. As a customer, you're matched with one of these experts, and every time you interact with our company, you get the same person. This allows for a true relationship to develop over time. We understand not just web behavior and transactional signals, but the passion and emotion underneath a purchase. We truly live the idea of "customer-centricity" every day.
Q: What is Your Journey with Sweetwater and Your New Role?
Vijay Chittoor: I want to talk about your journey with Sweetwater. You've been with the company since 2003 and were recently promoted to Chief Growth Officer. Tell us about your success in making Sweetwater such a big online destination, and what this new role means for you and the organization.
Mike Clem: Sure. Since 2003, I've overseen the web experience, e-commerce, and online growth strategy. The new promotion is about taking that up a level to be more enterprise-wide. For a company like Sweetwater, which has no shortage of good ideas, my role is to be smart about stitching those together into one strategic plan and roadmap.
We use a growth framework for our company, where ideas fall into one of four buckets:
- Disruption: The game of big, new ideas.
- Innovation: The lifeblood of our company, focusing on how we continue to grow and differentiate.
- Optimization: Reimagining existing ideas to "grind out another 5 or 10% of value." It's a very incremental mindset.
- Maintenance: Keeping things running.
My role now is to ensure we have momentum in each of those lanes and that we're fueling them without allowing them to cannibalize from each other.
Q: How is the Music Industry Evolving?
Vijay Chittoor: Of the four things you mentioned, I want to start with disruption. You live in an industry with a lot of change. How do you see the industry evolving around you?
Mike Clem: It's messy out there right now. We're facing pressure from:
- Supply chains and macroeconomics.
- Amazon and direct-to-consumer are putting pressure on us.
- The privacy sensitivity you mentioned, which changes the game for many of us.
- Discounting, which is a race to the bottom in our competitive set.
Our focus is to be true to who we are. It's about demonstrating relationships in tangible ways and being the most human brand. Shopping at Sweetwater should feel different from a transactional experience like Amazon. We focus on winning in the details and being scrappy and entrepreneurial.
Our superpower is our rich customer information. We have a deeper understanding of our customers than most retailers. We use technology like Blueshift to unlock opportunities not just to market, but to add value, and push customers along their musical journeys, whether for a purchase, content, or education. We can start with that rich base and then automate value for you.
Q: How Does Marketing Tie into the Customer Journey?
Vijay Chittoor: That's very interesting. Can you expand on your customer journey? How does marketing tie into that journey?
Mike Clem: As a customer, you're paired with a sales engineer. We don't just wait for the phone to ring; we make outbound communication to nurture relationships. We use data science and modeling to understand which customers are higher value or which prefer our business model (not everybody wants a phone call). We then communicate through the right channels.
Our data science also helps create "agendas," telling our sales agents what to talk about with a customer. We can predictively see the next steps on a journey in the data. This isn't just about shotgun ads; it's about a phone call and an authentic interaction. The customer journey is a flywheel, not a funnel, where each channel and communication is aware of the others. This ensures we're interacting with you in the way you want.
Vijay Chittoor: What you talked about—a customer talking to a sales engineer—is that marketing? Is that customer experience? Or are they blended?
Mike Clem: I think it's evolving for us. Historically, we thought about efficient marketing, focusing on performance ads connected with a great experience. Our marketing has been efficient in awareness and acquisition, then connecting that with these great experiences. So I love your statement: "marketing plus these experiences really is something we're living out day to day."
Q: How Do You Measure Loyalty and Lifetime Value (LTV)?
Vijay Chittoor: You talked about LTV and loyalty. How do you quantify and measure that? What markers are you looking for to say that a customer is more loyal and is a true advocate?
Mike Clem: Historically, because our business model is so one-to-one, we didn't try to predict; we just called the customer. But at our current size, we can't scale that. So now, we look for markers.
For complex products, there are questions a customer might ask that tell us, "Oh, he has an entire studio," or "She has a mobile rig that she's touring with." These rich learnings are stored in our CRM, which then feeds into our website personalization and marketing. Over decades, we've refined a model of being in constant communication with our customers. This approach, with its first-party interaction and deep understanding, becomes incredibly powerful in a privacy-sensitive future when we automate with tools like Blueshift.
Q: How are you Scaling Human-Assisted and Digital Engagement?
Vijay Chittoor: You're connecting digital engagement with human-assisted engagement. What's the role of digital engagement in your scaling strategy?
Mike Clem: We have a lot of permission to interact with customers not just around purchases, but in between these "tent poles" of purchases. We can add value through education and exciting content. Since our website went live in 1994, we have focused on educating customers through product reviews, interviews, and how-to guides.
We take a scientific approach to matching this content to customer journeys. We recently integrated the education section of our website (with tens of thousands of articles and videos) with Blueshift. This content is distributed by email and personalized. We re-platformed a recommendation engine on top of Blueshift, which resulted in a 22% lift in click-throughs. It's incredibly powerful to bring the right content to customers.
Q: What Does Personalization Mean for Sweetwater?
Vijay Chittoor: You're touching on the idea of the "data artist," combining storytelling with data. What does personalization truly mean for you and your customers? How are you personalizing their experience?
Mike Clem: Personalization for us starts with a true understanding of the customer. Our sales engineers are constantly learning, and every interaction is an opportunity to learn one more thing about you.
This could include:
- What instrument you play.
- Your skill level (beginner or pro).
- What genre (marketing to death metal is different from jazz).
- Things you'd never learn on the website, like, "Oh, you volunteer at your church."
- "You collect vintage instruments." We have about 120 of these "classifieds."
We store all this in the CRM and use algorithmic ways to stitch together content and recommendations. The most interesting part is the human in the loop. When we see a predictive sign for a customer, we can bring a human sales engineer into the loop, laser-focused on that insight. This creates incredible efficiency. Blueshift, as a foundation, has been powerful for handling this orchestration and segmentation.
Vijay Chittoor: That sounds like the flywheel concept: data capture leads to a personalized experience, which builds trust, leading to more data capture.
Mike Clem: That's right. So many retailers now say, "We need to become customer-first." But Sweetwater has a 43-year head start on this. We take great pride in just treating customers right, because it's the right thing to do. We add value and not just sell. We build profiles and weave customers in and out of online and offline journeys to right-size the experience.
Q: What are the Challenges and Best Practices?
Vijay Chittoor: You make it all sound so easy, but what are the challenges in this approach?
Mike Clem: One big challenge is that to understand the customer holistically, it's become hard to see them across all devices. Identity resolution is top of mind for us. It's dangerous to recommend based on a partial understanding.
Also, the cost of ads in general is a concern, with costs skyrocketing across all channels. This brings us back to efficiency: understanding customers better with tools like Blueshift allows us to bring the right message to smaller segments. We like the efficiency of staying in the lower funnel for acquisition, as it's less expensive and more targeted than higher-funnel, "shotgun" approaches.
Vijay Chittoor: What are three best practices you would like to share with everyone?
Mike Clem: 1. We think a lot about customer lifecycle marketing. We use a "bingo card" approach, where the columns are lifecycle stages (lead, first purchase, loyal, churn) and the rows are marketing channels. Our exercise is to ensure we have a strategy for every cell and that each channel is aware of the others. 2. We work hard to be the research destination in our industry. Where you research and discover new products offers an incredible advantage, as it allows us to meet customers earlier in their journey. 3. If you don't have a customer engagement platform, get one. If you have one that's not Blueshift, throw it out and get with these guys. Jokes aside, that should be it.
Vijay Chittoor: When you were evaluating platforms, what were the key criteria you were looking for?
Mike Clem: It was a heck of a choice for us because everybody claimed to be a CDP. We had such a sophisticated understanding of customers that we needed something that would fit over the top. We fell in love with Blueshift because:
- It's purpose-built and just works, unlike platforms with bolted-on features.
- It has a focus on retail, where others talked in concepts.
- The pricing model was fair and transparent.
- The founder, Vijay, and the leadership team have sophisticated retail backgrounds, which made the product's design and vision resonate with us.
Q: What is the Future of the Sweetwater and Blueshift Partnership?
Vijay Chittoor: Where does this partnership go from here? What are you investing in over the next year?
Mike Clem: We're going back to those four buckets, focusing on optimization. In this privacy-sensitive future, we need to leverage our first-party understanding of customers and refine their journeys. Recommendations and algorithmic science are a huge unlock for us in the next year.
Vijay Chittoor: You've touched on so many topics—marketing, customer experience, online/offline interactions, AI, and putting data to work. It's clear you're driving the flywheel of growth, and that's reflected in your Chief Growth Officer title. Congratulations, and thank you for sharing your wisdom with this community. We're very excited about the partnership ahead.
Mike Clem: Thank you for all that. We're equally excited. Very cool product, and just really, really excited to unlock the future together.
