Every burgeoning company faces a balancing act between growth and freshness -- Ben and Jerry's is a classic example -- but it seems to be more of an issue for Skullcandy because the brand's fate is hinged so directly on a youth subculture deeming its products cool. How easy is that to lose? "Easy. So easy. It's very delicate," says Dean Crutchfield, branding expert and CEO of Caffeine, an international business growth consultancy.
Andrus believes he has an approach that he says will help the company avoid a backlash: spending a large chunk of marketing dollars on those smaller specialty stores, even though the national retailers bring in the bulk of revenue. Andrus declined to comment on just how much of the pie goes toward that demographic, but says it is "a very high percentage." He sees it as a long-term investment, as opposed to an inefficiency. "That kid -- that core customer walking into a skate shop or a lifestyle shop -- that individual is a trendsetter," he says.
That strategy could help Skullcandy maintain its connection to its roots. Action sports cultures place a premium value on obscurity: lesser known bands, local shops, hidden skate spots. Off the wall headphone designs were meant to give users a distinct means of expression. "It's about a unique point of view, the attitude of a tribe," says Crutchfield, the branding expert. Brands like Red Bull energy drinks and Vans shoes have pulled off similar moves, even after years of plentiful growth.
Even more changes are underway for the company: it seeks to expand its line of gaming headsets and has a higher end headphone model in the pipeline for 2012. As it expands, successful growth will mean nurturing its core crowd throughout an entire lifetime, says Crutchfield. "Remember that 15-year-old snowboarder?" he says. "Well, maybe he's married now. But he's still got that bit of attitude, right?" Skullcandy has served its tribe well so far. Its true test will be avoiding becoming just another fashion trend that, eventually, went out of style.
