Marketing Week (MW): You bought Gibson in 1986 when it was a failing company and turned it around. How did you achieve this?
Henry Juszkiewicz (HJ): The whole guitar industry was in a shambles. Gibson had been in decline for a decade and the company was virtually bankrupt. US manufacturing had practically ceased and almost all the guitar business was in Japan, which wasn’t healthy.
The proverbial wisdom in our industry was that guitarists were going and all music was being played on electronic keyboards, so it looked very bleak. When we bought Gibson, people called us the Harvard Mafia because three of us had gone to Harvard. The implication was that we didn’t know anything about the industry and we were soon to fail.
But we turned the company around and have been growing it at roughly 30% annual compound rate since 1986.
MW: How are you marketing the Gibson brand?
HJ: All good brands have what I call value propositions – they stand for something.
If you are a packaged goods brand your potential fans are everyone. So when you use traditional media, you are getting full value and reach. But only one in 20 people play the guitar, so if we pay for traditional media we are only getting 5% value for that.
How we reach our speciality clients using traditional marketing techniques is a challenge. We have an entertainment relations programme, which allows us to reach our speciality customer cost effectively.
MW: Gibson has been criticised for seeming reluctant to sell through smaller retailers. How do you work with the shops that sell your products?
HJ: Retailers really need to be partners and dedicated to the brand. So, regardless of size, we are looking for people who really like us and want to help us be successful. In return, we want them to be successful and care about them.
That is not the way most independent dealers approach business. They tend to carry a lot of different brands and they tend to buy based on price. They are constantly cherry-picking instruments and they will buy some days and others they won’t. That is not the way a brand operates. A brand has a long view of the market and you have good and bad days.
If you have a long view and a partnership you work together through the bad days and take advantage of the good. That forces us to go to the more substantial dealerships. That is not because we don’t like small independent dealers, but they tend to do business in a way we find unacceptable.
MW: How do you work with artists?
HJ: We look at everything as partnerships and they are bilateral, they are not one way or one time. So whereas most people have a short view and will do a one-off deal, we look at things as long term.
We are here to help the performers and in return we expect them to help us. The London office is a substantial commitment in terms of space [and the cost of rent] so that represents our commitment to the community of musicians in the UK.
We have studios downstairs they can use, we help with their careers, when they have albums coming out we will help promote them and provide instruments when they are on tour.
It puts the responsibility on us to be a good partner and to help them way beyond the guitar.
Most of these guys have enough money to buy them or get free guitars from anyone in the industry any time they want. But they can’t get a great friend who is there for them when perhaps their career isn’t doing so well.
MW: You also own jukebox maker Wurlitzer and piano company Baldwin. How are you positioning the company?
HJ: A large number of brands and brand managers are very short term – the numbers or widgets are important – but that is not what a brand is about.
A brand really is about bringing an experience of some kind to fans and we are bringing musical experience to them. A large part of our product is guitars, but our values and ability go way beyond that. This is the reason why we are able to bring other products in.
When I was younger, audio equipment and hi-fi gear was a really big deal and the listening experience was pretty exceptional as a result.
Today the consumer electronics world has abandoned audio and is hyper focused on video – that is where the money is.
They have left music and audio as the bastard step-child and we want to adopt that child and bring the experience back. But that plan is still at an early stage.
MW: You have the Gibson Amphitheatre in LA and sponsor the British Music Experience at the O2 in London. Will we see a Gibson-named venue here in the UK?
HJ: At some point, probably. Gibson goes beyond the wood of the guitars, the strings and the facts of a specific product.
You could say our brand really is about a fantasy – all brands are. It takes a lot of work to create the imagery and the story and the feeling emotionally that makes people’s lives better.
Being part of an amphitheatre and the glamour and drama of music-making is part of our product as much as the wood and glue.
Our sponsorships are about engagement and relationships, whereas traditional media channels are one-sided.
MW: How do you personally use Twitter?
HJ: Pretty poorly, but I am available and that is the important thing. My schedule is burdensome so I can’t put the time into social media. On the other hand, I am very responsive and I want to put people’s ability to contact me out there.
Artists contact me, but I don’t tweet every five minutes. I’m not that interesting. To me, it is about honesty and transparency, which is very important. People appreciate it, but companies don’t do that, they are very ‘plasticky’ and put the best face on it. But in reality brands are just like people – they are not perfect; they make mistakes and screw up.
Monitoring social media [as a brand] is about interacting with fans and reacting to their needs. Monitoring is not about reports and demographics and putting people in slots. It is what you do and how you use the ability to learn more about your customer.
MW: You have described yourself as an aggressive and strong leader and got rid of your management board in 2008. Talk me through that.
HJ: Life at Gibson is about change and constant progression, it is about really caring enough to look at your own [work] and constantly correcting it.
That is part of being aggressive – seeking out excellence and having the courage to make a change. Those things often get you bad press or cause other personal pain but you have to get past it and say ‘I’m driven by excellence’ and that is what I am dedicated to.
MW: Is Gibson expanding into new markets?
HJ: Scandinavia is developing. Last year we opened in India, which is a very big market and challenging too. Not only are we establishing our brand there, but we are at the forefront of establishing rock and roll music.
Rock and roll is not the primary music form of India. I call it ‘missionary marketing’, which makes for a lot of work. It will take a long time before it is as popular in developing countries. We invest in artists that are dedicated to excellence, who are very likely to become stars.
We are also working on several apps that will use technology to bring value to our fans. Online, we have substantial instructional material and music so people can look at popular tunes and learn to play them, and can talk to an instructor directly. When I was growing up, we had no place to learn. If you wanted to learn about how The Beatles played, it was a challenge to even find sheet music.
Gibson – the real story
Orville Gibson founded the Gibson Mandolin-Guitar Manufacturing Co in 1902. In 1936, the company created its first electric guitar and in 1952 started producing the Les Paul, after the musician who designed it.
By the 1980s, however, it ran into financial trouble and was bought by current chief executive and chairman Henry Juszkiewicz and president David Berryman in 1986.
It now owns jukebox maker Wurlitzer, piano company Baldwin and has a stake in home cinema and speaker company Onkyo. While Juszkiewicz says the brand does not need to be updated, it is reaching new audiences through sponsorship activity. It recently supported The Station Sessions at St Pancras Station in London, featuring up-and-coming artists, and also has a small venue for bands to play at its London office. The brand, which is headquartered in Nashville, has 15 entertainment relations offices in Europe, China, Japan and the US from which it liaises with artists.
A long list of stars, including Eric Clapton, Paul McCartney and Amy Winehouse, have played Gibson guitars and its challenge now will be to appeal to generations to come.