Making Virtual Work for Marketing: How Skullcandy Innovatively Engages Campaigns Audiences

Hi, I’m Jessica Klodnicki, Chief Marketing Officer of Skullcandy. Today, I’m going to present Content at Commerce with a Conscience, and I’m presenting in partnership with our friends at Tiled. We launched a program called Mood Boost Music with a Mission on April 1st this year. COVID-19 has impacted marketers globally and cause massive disruption. So today, I’m gonna talk about how our brand Skullcandy responded. I’m gonna talk about how we stayed true to our purpose, launched a mission driven program, and how we drove sales and engagement right as the global pandemic hit. I’ll walk through six different steps. I’ll talk about how we were grounded in a really strong culture and purpose. I’ll talk about a content to commerce formula that we’ve been cultivating. I’ll talk about the macro trends that were informing our marketing work pre COVID. Then, we’ll talk about how we went full speed ahead with our launch on April 1st. I’ll share with you the results of all that effort, and then I’ll talk about how we’re making virtual work.

First, we were grounded in a really strong culture and purpose as a brand before the pandemic hit. About two and a half years ago, we established a brand foundation with a couple of elements. Number one was our North Star, which we call Music You Can Feel. The intent here was to showcase how music can impact you both physically and emotionally. We use this North Star for everything that we do. We use this as the filter for product roadmap, we use this as a filter for strategic decisions, we use this as a filter for our marketing efforts—everything we do.

Our vision is to be the number one brand for the youthful and adventurous audio consumer. What we mean by that is that we know our brand can’t be all things to all people. Just by nature the fact that we have a skull in our logo and we’re called Skullcandy means that we’re our brand is not going to be for everyone. So we had established early on that we were always going to be targeting at least a youthfully minded demographic. We also like to say we target the adventurous on your consumer. By adventurous, we mean adventurous on their tastes and music, their tastes and fashion, and they might even be a little bit adventurous in their hobbies and activities.

Our mission is to unleash the visceral power of music for all. Just to dissect this one, when we say for all, we’re referencing the fact that we’ve always prided ourselves on being a democratic brand. We pride ourselves on bringing really great technology and great products of an accessible price for that youthful demographic. We want everybody to be able to experience the visceral power of music and our values.

Fresh Tracks references our approach to innovation. Relentless Underdogs references the fact that we’re a truly underdog player in a space where we compete with huge ecosystem brands like Apple, Amazon, Beats, Bose, Sony. Banded Together talks about our teamwork and collaboration. First Chair, Last Call talks about our work hard, play hard ethic. We’re based in Park City, Utah, overlooking ski resort. So as you can imagine, we work hard so that we can also get out and play in the snow, and then owning it references our accountability to each other and to our teams.

One of the hard things for us when we went into the pandemic is that we were a really collaborative team. We worked in person. A few employees were working from home, but for the most part, we’re all together in our Park City office, collaborating closely day in and day out.

Let’s talk about our content to commerce formula. Our content to commerce formula is something that we’ve been fine tuning for about two to three years. So I’m going to oversimplify the consumer journey just a little bit, but the way we think about it is the heart, the mind, and the wallet. First, we have to capture the hearts of our fans with our branded content, then we have to capture their mind with our product marketing and more commercial advertising, then eventually, we hope that they’ll vote with their wallet and opt in to our brand and our product. Again, a little bit of an oversimplification, but this is how we’ve been approaching it.

In the earlier years, in 2008, we launched a 25 episode live stream concert series, which was perhaps out of its time. These were full length concerts 30 to 60 minutes in length, live stream for venues around the country, to our fans on social media platforms. That worked really great for us, but we realized that the attention span of our consumers was getting shorter and shorter. So in 2019, we launched a program called 12 Minutes. This was an always on branded content program where we literally dropped 365 days worth of content across popular social media channels in order to pull people into our upper funnel, and again, grab their hearts.

04:42

To capture our consumers minds, we follow up with those branded content programs with more traditional product launches. This is where we serve up more commercial content about the products and the new innovations that we’re launching. So this is what that funnel looks like. Most of you are probably accustomed to this, but we’ve been really fine tuning our audience targeting our role as threshold, concentrating on fine tuning the type, format, the length of content to really master this formula. So at that upper funnel, we use our brand budget for prospecting and acquisition. This is where we use that beautiful branded content, product launch campaigns. Then, we move to the lower funnel where we retarget with harder working tech videos, product videos, headlines, display ads. So I’ll come back to how that has been working for us.

05:33

Now, let’s look at some of the consumer insights we were studying pre COVID. We had done a consumer segmentation study of over 2000 consumers in the US. These were audio consumers that were participating across all brands, all price points. What we wanted to understand was their relationship with technology, their audio purchase behaviors, their adjacent consumer electronics, purchase behaviors, how they interact with social media, and more. We landed on three top targets that we were investigating for our brand. Number one was the stylish curators. These consumers are focused on style over tech features when it comes to consumer electronics and audio. Then, there’s the affluent adopters. They have the highest replacement cycle in tech and our end in our audio category, and are very well well versed in technology. Then, there’s a random [inaudible], and these were sort of in the middle. They have fairly high technology adoption, but they’re most concerned with brand when making purchases in our space.

06:30

We had a lot of really great data on these consumers as we were going into the year. But then we started looking at some macro trends across all of these consumers really across Millennial and Gen Z. We started to see some unfortunately disturbing insights. A clip from USA Today says Millennials and Gen Z connected with thousands of friends but feeling all alone. The Economist reported anxiety and depression is the leading concern for people born after 1997. News Week reported huge spike in mental illnesses recorded in Millennials and Gen Z, social media blamed. Then, because we’re in the music space, Spotify publishes some wonderful consumer insights. We saw in a report from them last year that 59% of those Gen Z and Millennial consumers also believe that brands should convey messages of moral support, and that they should show understanding of consumer struggles. 66% of them expect brands to play a more meaningful role in society.

07:29

When we looked across all this, we developed a point of view for how we’re going to tackle 2020. So I’m going to read to you a short sort of manifesto that we use to kick off the program. Oddly, in a day, when we’ve never felt more connected, many of us feel more lonely than we’ve ever felt before. Couple that with social media burnout, a never ending stream of bad news on every channel. And it’s no surprise, but a lot of us can start to feel pretty down. In whatever small way we can, Skullcandy wants to help change that. Through this new year long campaign, we’ll work to spotlight a positive feeling every month, brought to life through special music performances, one on one interviews, colorful artwork, and limited edition product drops, in hopes that we can inspire some better feelings for everyone because nothing changes the way we feel like music. Join us for a Mood Boost every month starting April 1. You can see this references that North Star that I talked about. We say, “Nothing changes the way we feel like music,” so always referencing back to that North Star as a brand. We took those consumer insights. We felt like, “We know we’re just an audio brand, but we felt like, in whatever small way we could, we wanted to do something about this.”

08:39

So let’s talk about how he decided to go full speed ahead on April on this new campaign. Let’s go through a little bit of a timeline. On March 11, just two weeks before our launch, the World Health Organization declared COVID-19 a global pandemic. On March 13, we sent all of our employees home. Now, normally on March 13, you’d see snow in the parking lot there. But we have a wonderful group of employees where we just love our culture. we love coming to work, and so we had some people working from home and working virtually, but for the most part, our employee base was coming into the office physically every day and collaborating with each other. On March 13, we sent all those employees home. On March 14, our ski resorts announced closures amid the Coronavirus outbreak. If you know Park City, you know this was certainly devastating to our outdoor oriented employee base. Then, in March 17, in Salt Lake City, we actually had a 5.7 earthquake kit. That knocked out here we had all of our employees working from home, and that knocked out power and our internet access.

09:44

As you can imagine, we truly thought the world was coming to an end. So we had to decide, Was our campaign still going to resonate? Was it right to go forward on April one with this program? We said yes, absolutely. All those concerns, the macro trends that we had identified were even further exacerbated by the stress and anxiety imposed by COVID. People now had new health concerns, new financial concerns, people were lonely and isolated. So we thought there was no better time for us to move forward with a campaign that was about bringing a positive light during a difficult time. I’m going to roll a background video that gives you a little context for the program.

11:41

Here’s how it works. Every single month, we wanted to drop a really positive vibe and positive mood to the consumer. You can see the types of moods that we introduced: feel blissful, confident, original, strong, curious, wild, lucky, hopeful—which happens to be in November around the electio—centered, determined, feisty, and carefree. Throughout the campaign we decided to collaborate with for diverse music artists, where we would do short, exclusive music performances and interviews. We really wanted to identify and line up in a roster of artists that reflected our Gen Z and Millennial consumers with Coco, Rico Nasty, [unintelligible] Burton, and Rena, a very young, talented, emerging group of artists that represent different genres of music. Going back to our roots in action sports, we also decided to feature mood interviews from a roster of board sports athletes. So we have a tradition of partnering with athletes in the surf, skate, and snow space.

12:48

A percentage of the proceeds from this program will go to a nonprofit partner focused on youth mental health. So we decided to partnership with To Write Love on Her Arms, which is a wonderful movement around this topic. So let me walk through the most recent example from June. So in June, we’re feeling original, which was the mood. Every month, we drop a limited edition product bundle. In that bundle, we launched a true wireless audio product. In this case, it was our product Sesh, and a limited edition art print. In the month of June, we partnered with artist Queen Andrea. So you can see it’s always an uplifting color and an uplifting message.

13:27

Then, we dropped short snippet audio performances. So another learning that I haven’t mentioned yet is that as we fine tune that content to commerce formula, we’ve identified that the average watch time a video in many of our social media platforms—7 seconds. So we’re trying to keep all of our content down to 30 seconds or less. Here’s an example of a music performance by Rena Salama.

14:22

One thing you’ll also notice is that these clips are extremely visual. What we also discover throughout the fine tuning of this program is that many consumers—and we’ve heard statistics upwards of 85%—consume content in Instagram and Facebook with sound off. So we got some great advice before we launched this program from those platforms to design for sound off and delight with sound on—we love that phrase. So you’ll see the content itself is extremely visual with an overlay from our visual artist. Also, we’re using subtitles everything so in the event the consumers are listening or viewing the content sound off, they’re at least getting really beautiful content served up to them, and in a very visual manner. You’ll see that, again, in these interviews. So we also have 32nd clips with both our artists and our athletes. Again, keeping it very short and very visual.

15:30

You can see really nice, uplifting messages during a difficult time for people. That was female skater Jen Soto, who was just an imperfect embodiment of this Mood original. Here’s just one more clip from artists Rico Nasty.

16:36

Then, we wanted to extend the aisle, so to speak, with accessories.We had tried accessories before, things like t shirts and hats, and it’s just not our core business. So we found a wonderful partner in Threadless, who does on demand printing. It allowed us to take these beautiful pieces of artwork every single month, create a line of t shirts, hats, hoodies, skateboards, and apply the artwork from our artists partner to those products in an easy to manage manner. So you can literally go on and order one unit of one as a consumer. We’ve gotten a great response to that. Seaking of pivoting during Coronavirus, we got a great response to those products, and we got loads of requests for masks. So we were able to quickly pivot and upload designs onto that new category of products. In the spirit of Content to Commerce with Conscience, they also were sharing a portion of proceeds with med share from those masks. So again, we were able to do good with this program.

17:41

Most critically, we were able to deliver messages of hope every month. So for our partner To Write Love, not only did we want to contribute financially, but we really needed and wanted to shine a spotlight on the subject of mental health, and shine a spotlight on the organization so that we could help young people and help people go find the resources that they needed, especially during this really difficult time. All of this culminated in a really highly curated Instagram feed. So this was a channel that was important to us, and we dedicated to building a couple years ago. So every month, you’ll see all of those ingredients that I just talked through are illustrated in this feed in a really beautiful and engaging way.

18:25

Let’s talk about the results. Traffic to our website and all of these results are year to date compared to last year. Traffic to our website is up 112%. Our conversion rate on the website once people get there is up 29%. As a result, our ecommerce sales are up 170% year to date. In fact, when we only look at the period since COVID started, results are up almost over 250%.

18:56

Here, we compare a current news campaign to last year’s 12 Moods campaign for the same time period. You can see we’ve had some astounding results. We’ve gone from 100 and 1 million impressions to over 672 million, from 56 million in reach to over 293 million, from 21 million video views to over 37 million. We’ve nearly doubled our engagements. All of this is allowing us to punch above our weight against much bigger standing audio brands. We now have over 25 million social media interactions year to date. Not only are we growing engagement with our fans and ecommerce triple digits, we are now the fastest growing true wireless earbud brand in the United States in all channels of distribution. This was from NPD point of sale data through August 5th 2020. We’re up a whole 447%, and this is including brick and mortar channels that were, in some cases, suffering post Coronavirus. All of these results together tell us that our content is truly resonating this year, and that we have, in fact, captured our fans, hearts, minds, and their wallets through this time period.

20:05

So how are we making virtual work? That strong ground foundation that I mentioned served as our rock during a really unstable time. Because we had a strong cultural foundation, it allowed us to go on operating fairly seamlessly when COVID hit. We had to rapidly transition to remote work, which was new to all of us. But because of that foundation, we all knew the mission and we all knew what to do. We doubled down on doing good and delivering uplifting messages. So while we were uncertain if our campaign would still resonate post COVID. Not only do we think it would resonate, we actually felt like the world needed, it needed those uplifting messages. So we doubled down on those efforts. We stuck with our plan. But we made and are still making messaging modifications to make sure we strike the right tone in the new environment with everything that was happening in the world.

20:54

Here’s a couple of fun examples of those more commercial ads that I talked about. These wouldn’t have been headlines that we would have used previously. This is some of our most recent advertising for back to school. So you can see on the left, perfect for online learning, or at least tell your parents that. On the right, 2019 not allowed in class, 2020 recommended for class. We’ve been constantly tuning our messaging to the mood boost program, and all of our product advertising to just make sure we were on point.

21:25

Here’s a great example from one of our partners Tile. Tile is a dynamic communication tool that lets you create interactive experiences that outperform normal static content. So as we were launching mood boost, our intention was to fly to New York City, meet with editors in person, and do an in person launch of the new Mood Boost program. Well, that was obviously out of the question when this all hit. So we worked with Tile to create a truly dynamic experience via a micro app that allowed editors and writers to scroll through and watch video, experience the different contents, the music artists, the athletes, the product bundles. They could click through and explore the program in a much more dynamic way than they could from a static press release or PowerPoint presentation. We rigorously manage, measure, test, learn, and constantly fine tune.

22:15

We measure our social media efforts with a platform called Hook It. We’re constantly working with our advertising partners in the Google and Facebook ecosystem to make sure our content is the right format, the right length, and optimized for our content to commerce programming. Our team remain agile and collaborative even in the new work environment. So this is how Skullcandy stayed shoot its purpose, launched a mission driven program, drove sales and engagement right as a global pandemic hit. Thank you for listening. If you have any questions or comments, I’d love to see them down below. Thank you.