Fender CEO Andy Mooney recently got together with Entrepreneur to discuss various guitar- and business-related topics. Andy, who has been at the helm of the company since 2015, was asked about compiling “large amounts of data” and how he uses it to the company’s advantage. Mooney responded:
“When I joined Fender in 2015, I asked the most basic question: Who’s buying our guitars? Everybody had an opinion, but nobody had any data. So we gathered it, and out of that came five insights that guide everything we’ve done since.“
“Number one: 45% of the guitars that we sell every year go to first-time players. This was a big “aha” moment. Two: There’s a 90% abandonment rate for first-time players, which was not surprising, but it was good to get a hard number on it. Three: 50% of new players are women, which was a complete shocker to the company.“
Up next, reasons No. 4 and 5 were regarding female consumers and their treatment in the whole guitar community. As Mooney revealed, women felt like they weren’t treated well in conventional guitar stores, which impacted the way they purchase instruments. Mooney continued:
“Four: Women were predominantly buying acoustic guitars. Five: Women were buying guitars online because in the brick-and-mortar stores there was nobody to relate to, and they weren’t getting treated well.“
“So all of those insights influenced our marketing, our Artist signature series—and it essentially created [proprietary education platform] Fender Play. Thinking about that 90% abandonment rate, we figured if we could help reduce it by just one percentage point, it would be a significant needle mover.“
“Remember, the 10% of the salmon that make it through the dam, as it were, have a lifetime value, or LTV, of $10,000 [per customer]. They’re the ones who drive the hardware business.“
Going further into the conversation, Mooney also discussed how all this data made him reinvigorate Jackson guitars in this day and age. Concerning the classic 1980’s brand usually associated with metal players and which has been in Fender’s possession for a while, he said:
“I have a few good friends over at [ticketing company] LiveNation who I talk to all the time. I studied their press releases and saw that the biggest genre of growth in live music is heavy metal. There’s a truly global legion of fans out there. Metal is also home for the highest percentage of guitar aficionados and virtuoso players. They’ll never fess up to it, but they will end up buying the exact brand their heroes play, sometimes in the exact color. So I said, ‘Let’s commit deeper to the category.'”
“There was also a nostalgic component to the decision. We were seeing a significant uptick in demand in our custom shop business, coupled with requests from artists who were now well-established. A classic case in point is Slipknot—you’ve got Mick Thompson playing a signature Jackson, which he grew up on, and on the other side of the stage Jim Root is playing a signature [Fender-owned] Charvel.“
“And I said, ‘Well, if these guys are reconnecting with the brand they played when they were kids, and there are people willing to pay five, six, or seven thousand dollars for guitars in the custom shop, there’s going to be demand for solid, American-made guitars built for working musicians in the $2,000 to $3,000 price point.‘ And based on what we’re seeing, I think that belief is absolutely going to hold true.“
Photo: Jud McCranie (Fender tailed logo)
