Sweetwater owner and founder Chuck Surack in the acoustic guitar space of the new Sweetwater retail store.By Frank Wells
Ft. Wayne, IN--Two and a half years after breaking ground, Sweetwater is now officially occupying their entire new 150,000 square foot, $35 million dollar headquarters in Ft. Wayne, Indiana. "The company's now 29 years old and I started in a VW Bus," says Sweetwater founder, owner and CEO, Chuck Surack.
A musician, Surack began Sweetwater as a professional recording studio (four-track!). As an early Kurzweil adopter, he developed a sound library that he began to sell, and that evolved into selling ancillary items and then further evolved into a full-on retail business. In 1990, the company moved into its first dedicated commercial space, occupying around 5,000 square feet, "and the next year, we had another 5,000, and then another 10,000, and we kept expanding and expanding until we had almost 50,000 square feet," Surack recalls.
Realizing that a planned multi-story building at the original location would max out the possibilities there, Surack began looking for a new location with room to grow yet further. "We're sitting right now today on 14 acres but I bought 44, so there's plenty of room to more than double in the future if we need to, or add other features, whatever we want to do."
The grand mall in Sweetwater's new HQ sweeps past the retail store, studios, auditorium and conference rooms to the Take 5 Café and the Downbeat Diner and the employee fitness, concierge and recreation area, then on to the service department and warehouse area.Sweetwater's new headquarters building is open and spacious, with ample natural light. The building meets LEED environmental standards, using sustainable materials and designed-in efficiencies in energy and water use. LEED certification requires a determined commitment and not an insignificant investment in these early days of dedicated eco-sensitive design, though the economies created by efficiency can help offset the initial cost over time.
The open public "mall" area of the building is broad avenue with high ceilings, and includes Sweetwater's only physical retail space--effectively a store with an $8+ million dollar inventory in the warehouse. The retail store does about $6 million annually in business, out of a total expected gross of $150 million for 2008. The Downbeat café serves breakfast and lunch six days a week to staff and customers, with former country club chefs cooking up under priced meals underwritten by Sweetwater.
The Take 5 Café offers beverages and more to Sweetwater customers, visitors and staff.Further amenities in the new facility are substantial--a full time concierge to help ease the load of personal concerns off employees, a health and fitness area loaded with equipment and including a racquetball court, a DVD lending library, an ATM, a hair salon, a professional services office and a game area filled with electronic and conventional diversions ranging from table tennis to an electronic video golf simulator.
"If employees aren't happy," says Surack, "it's going to clearly show to the customer. So, from a pure financial point of view, it just makes good sense to take care of the employees, they'll take care of the customer." Surack says he's fortunate that he and his wife own the business outright and that they have the resources to do things the way they choose, including making cost a minor consideration in designing employee amenities into the facility. "We just knew we wanted to do it right for the employees. My benefit is that'll make better employees for the customers and ultimately we'll sell more gear, but that really wasn't our motivation"
Sweetwater performs warranty service for everything they sell, and for just about anything else, from the spacious new service department area, which also includes the tech support phone bank. Internal services include a classroom style conference room, the guitar maintenance and evaluation shop, and a print shop. Three new studios centered around Digidesign's Pro Tools and Icon hardware, are busy with custom music, spot, jingle and message on hold work, and are tied to the huge 250 seat auditorium.
Auditorium manager Dave Stewart stands by his Digidesign Icon, the anchor for the 250 seat room and its three separate sound systems. The thoroughly modern auditorium features big screen HD video and four separate sound systems, including a Digidesign Venue/Control D console and a Lexicon LARES system that tailors the acoustics for a variety of applications. Dave Stewart, who manages the auditorium, says major criteria were to allow sales staff to hear the products and not the room during the twice weekly two-hour continuing education meetings of the sales force, and to allow the audience to see a product effectively via high def cameras, switching and projection.
"One of our criteria for the projector was that we wanted to be able to read software menus in the back seat of the house," says Stewart. The room--and the studios--were designed by the Russ Berger Design Group to be "acoustically kind of neutral and sort of dead sounding," says Stewart, which is ideal for allowing the staff to hear "the nuances of product" and excellent for spoken word. The downside of that is difficulties "if you do want to do certain types of musical performances; it's not really a great environment for a string quartet to play in." Enter the LARES system, which allows the room acoustics to be tailored from subtle reverberation to totally, absurdly live through the use of 84 strategically positioned speakers and a boatload of DSP processing. An LCR "rock and roll" PA, a headphone system with jacks at every seat and a theater surround system round out the playback options.
Just opened is the Sweetwater Academy of Music, with a full-time director overseeing multiple individual lesson rooms as well as larger spaces--$100 monthly will get students four to five 1/2-hour lessons. The auditorium is available for recitals, as it and other Sweetwater resources are available to the Ft. Wayne community. "We've told all of the non-profit arts performing groups they're welcome to use our space whether it's conference rooms, the theatre or the conference hall," explains Surack, with recent uses including a children's choir and the Ft. Wayne Philharmonic orchestra.
Sweetwater's new warehouse boasts over $8 million in inventory, all turned over monthly.The climate controlled warehouse space at Sweetwater was designed with room to grow, currently operating at about 40 percent of capacity. The Creation Station line of Windows PCs are built on the warehouse mezzanine. Sweetwater boasts a monthly turnover of nearly all its $8+ million dollar inventory. "It takes a little more labor to manage the incoming inventory, to make sure we have the right stuff on order at the right time, and then we're dependent on manufacturers--which some are great and some are not so great--and then they're dependent on their suppliers," says Surack. "We did $131 million [in gross sales] last year. We'll do more than $150 [million], at least, this year." While Surack says that may be relatively small compared to the three big retailers that account for near $3 billion in business, "it's big for a little company and it's big compared to most of the 8,000 music stores." Each of Sweetwater's established sales engineers account for $1+ million in annual sales, effectively being the equivalent of an independent store.
Of around 325 employees, 110 are sales engineers, up from 60 in about two years time. The current sales is remarkably quiet for a open cubicle design, with high ceilings and lots of natural light. Sales managers have mostly glass enclosed offices sprinkled throughout the space, which has a capacity around 190.
Surack says the critical element in the success of Sweetwater "is really the customer service; our goal is really to get that communication going between our sales engineer and our customer." While some 30 percent of Sweetwater's sales are now internet driven, a Sweetwater sales engineer always follows up with a call to confirm customer satisfaction and thus begin a relationship. Surack compares the company's online presence to the Sears Wish Book, but cautions that in a given product category, it might not be obvious to the buyer what the best product is for their particular needs. Thus one aspect of the oft internally referred-to "Sweetwater Difference" is the development of a highly trained and knowledgeable sales force. "That's how our company grows--by training more good people--and that's how we differentiate ourselves, as part of that Sweetwater difference."
JBL Professional's Peter Chaikin addresses the Sweetwater sales force in the new auditorium during one of its twice weekly training seminars.The process begins by vetting prospects with a detailed technology test, and by requiring formal audio education, and preferably some real-world experience. "But after they get here," says Surack, "they go through 13 weeks of Sweetwater University." Eight hours a day are spent on hundreds of classes. "We're trying to make sure we fill in all the holes they might have," explains Surack. "But then we spend half the time on the Sweetwater philosophy. How to build up relationships with customers, how to not negotiate the price until the selling's done--we will make sure that it's really the right product [and] if we're the right place to buy it, then price becomes important.... Training is from the front door to the back door of this building." Surack says that he tells new employees that "the only thing we have to sell is our integrity--and hopefully you're adding to the company's reputation and integrity pool and not borrowing from it."
While Sweetwater did consider alternate locations, including other cities, when deciding to build the new campus, ultimately the commitment to existing employees and quality of life issues lead it to remain in Ft. Wayne. Affordable cost of living, good schools and a growing list of arts, sports and other entertainment options are among the benefits of the area, says Surack, adding that the "region is good from a shipping point of view."
"One of the beauties that we have in this building with this culture," Surack says, is that "my salespeople only have to sell and take care of customers." Ultimately, he says, the new Sweetwater facilities are built with his overall goals in mind. "I'm interested in a long term relationship with the customers, and the long term employment of the employees."