2004 saw the 100th anniversary of Harley-Davidson. The brand has much to celebrate. It has delivered 20 consecutive years of record earnings and revenues. Harley Davidson is selling more bikes in this period than at any time in its history.
It is hard to believe that this company had a near-death experience in the early 80’s and was close to losing its market to the Japanese manufacturers. The turnaround can be traced back to 1981, when a group of 13 senior Harley executives led by Vaughn Beals bought the company. They celebrated with a victory ride from the company’s factory in York, Pennsylvania, to its headquarters in Milwaukee but this was just the first step of a journey to design the business around customer loyalty. Customer loyalty is no accident. The process of designing customer loyalty into your organisation is complex but can be made a lot more straightforward by following these six steps. Whilst the process will vary according to the nature and needs of the brand, the following represents a logical framework for managing the activities that align both the expectation and the experience that customers have of the brand.
1) Customer Experience Audit
The first step is to be clear about who your most valuable customers are. For most companies they are the loyal customers who spend more than the average on the firm’s products. For Harley-Davidson it was the hard-core enthusiasts who had stayed with the company through the bad times of poor product quality and indifferent after-sales service. The next step is to determine what these customers really value and understand the extent to which the organisation is delivering that. When Richard Teerlink took over as CEO, he tapped into Harley’s greatest asset – the people who care about the Harley-Davidson brand. He posed the question “How do we create more value for our customers so that they willingly buy more of our products and services?” To answer the question he started a dialogue outside the company with the loyal customer base and inside the company with its workforce.
2) Creating the brand platform
The Brand Platform is usually already in place for many existing organisations but you will want to make sure that it is absolutely clear and fully effective as without clarity around the brand platform the following phases cannot be under-taken. It involves examining the following issues;
• Brand positioning – How to position your brand with clarity and precision.
• Brand naming- Choosing a name for the brand that is distinctive and creates the right emotional associations.
• Brand architecture – Ensuring the brand or sub-brands work together to communicate the proposition.
• Brand identity – How best can the brand be portrayed visually and verbally?
In the case of Harley-Davidson it became clear that the brand was still very strong and clearly differentiated and so did not need much work. Management were told by customers “keep the identity and keep the look and sound of the bikes because they are unique”. Out of this came the realisation that the Harley Davidson brand represented much more than a motorcycle; it was more of an aspirational lifestyle. Out of this thinking came the brand promise of “We fulfil Dreams”
3) Customer Experience Design
The next step is to develop a profound understanding of the current experience along every step of the customer ‘touchline’. What do customers expect? What do they experience? What would make the experience ideal? How can the promise be brought alive? How do employees need to behave? Finding the answers to these questions is the ‘science’; designing a new experience that delivers the brand promise is the ‘art’.
In the case of Harley-Davidson it led to developing new bikes that continue the distinctive Harley look and feel including the famous engine sound, but boasting the performance of the latest Japanese sports bikes with quality to match. The sales and after-sales experience was re-designed and improved and new products and services were introduced: vacations, rentals and the Riders-Edge program, a bike handling course designed to attract new riders.
4) Communicating the brand internally
Having designed the new experience you are ready to communicate it- internally. Many organisations at this point rush out a new ad campaign and end up over-promising and under-delivering because their people are not fully prepared. As much effort must go into marketing internally as marketing externally. Managers play a key role in helping their people to understand the brand promise and how it must be delivered. They must equip employees with the knowledge, skills and tools needed to deliver the customer experience and then reinforce this through their personal actions.
Harley-Davidson created new standards and training for the distributors who sell and service its products. It changed the way that employees are recruited and trained. A key part of their orientation is learning about the company philosophy and brand experience. Most of all, it created a company culture which promotes openness and individual contribution.
5) Communicating the brand externally
Now, and only now, are you ready to communicate the proposition externally. Much of this work may have been done in preparation but you will want to make sure the organisation is ready to deliver the experience before you raise the expectation by going live in the media.
Harley-Davidson realised that its own loyal customers were advocates for the brand and therefore a primary source of marketing communication. (How many customers do you know who will happily tattoo your brand on their body?) It formed the Harley Owners Group (HOG), a brand community of enthusiastic customers who buy holidays, clothing and attend regular week-end rides. The Harley Owners Group started in 1983 and today numbers 850,000 members.
6) Continuing management, audits and re-definition
Not many brands survive long enough to celebrate their centenary so the final step in the process is to protect and refresh the brand over time to keep it current with target customer needs and competitively strong.
A key step is to create a customer experience scorecard that aligns what the business measures with what customer’s value. This then leads to ensuring that reward systems keep managers focused on the activities that result in retaining customers and employees.
Having had a ‘near-death’ experience once, Harley-Davidson is not about to risk losing touch with their market a second time. The organisation keeps abreast of changing customer needs through a process called ‘Super-engagement’ This involves the managers riding on a regular basis with customers and hearing their feedback directly. An important metric is participation in Harley Owners Group events, so if 10,000 people participated in a weekend ride last year the organisation sets the target for an increased level of attendance this year.
In conclusion CEM+ is a logical process for ensuring that your brand thrives during the upturns and downturns in the market and continues to mean something special for your target customers. Whilst it is simple in concept it requires expert execution. There are many organisations who speak enthusiastically about customer experience and many consultancies who are promoting it as a source of competitive advantage. Unfortunately, few of them have a systematic process for turning the desire into business results. Perhaps that is why there are still few organisations with a brand as powerful as Harley-Davidson’s!
Shaun Smith © shaunsmithco 2007
‘See, Feel, Think, Do – the power of instinct in business’ investigates the role of instinct and innovation in customer experience. Available from www.seefeelthinkdo.com or visit our web site www.shaunsmithco.com.
I love the Harley story. It’s an irresistable modern fable of redemption. There’s no question that the brand has high levels of loyalty: 96% of Harley owners replace their machines with another Harley. It’s hard to imagine a BMW rider lusting after a Harley. I ride a motorbike. I ride a Suzuki and I wouldn’t be seen dead on a Harley (apt choice of words don’t you think?). I’m not old enough (OK, I’m in my 50’s but I don’t feel old enough). And that’s the problem with Harley. Younger riders have no real sense of identification with the brand. It’s an old geezer’s bike. The average age of a Harley rider is the mid-40’s. What will happen if Harley doesn’t fix this image problem? My bet is that the brand will die again as the old geezers who ride them themselves die or become too infirm to control these heavy machines as they lean into the bends. Francis Buttle
Hi Francis
Thanks for your comment on my article. I completely agree with you when you say that many young riders don’t identify with the Harley brand.
Last weekend I was in San Francisco down by Fisherman’s Wharf. It was interesting to see your point acted out. There was a large group of Harley riders that rumbled down the road pretty much blocking it. Judging from the size of the guys I guess most of them were older ‘geezers’.
A few minutes later a group of Japanese sports bikes wove through the traffic with much screaming from the engines. Once again, on the basis of the close fitting leathers and agility of the riders I would guess them to be much younger than their Harley counter-parts. (I would also guess that a number of them were Asian unlike the Harley riders)
But for me that is the essence of a strong brand. When you have customers who love you and wouldn’t consider buying any other product and people that wouldn’t be seen dead using your product it indicates that you stand for something and have a clearly defined target customer. People don’t usually buy Harleys because they are passionate about motorcycling; they buy because they want membership of a lifestyle club.
The issue for Harley as you say, is will they be able to attract customers to replace the ones that are ageing. My guess is that they will; they may have to skip a generation but retro has a way of becoming cool (you only have to look at the introduction of the new Mustangs and Dodge Chargers) and with the introduction of better handling bikes that still retain the traditional Harley DNA, like the V-Rod for instance, they may well find a whole new generation of customers will be attracted to the brand.
It will be interesting to see. Thanks again for your view Francis.
Shaun Smith
Yes, I was a repeat customer… once. I purchased a 2008 105th anniversary VROD, after watching the Discovery channel documentary on the making of this bike. What I got was a machine that had factory reversed-wiring of the fuel injectors, that the dealer could not fix, that almost killed me several times from dying while entering traffic. After 2 months in the dealer’s garage, I traded even-up for a 2006 Road King with 1200 miles on it. At 14 months and 15000 miles later, I have had to replace shifting linkage that broke in rush-hour traffic TWICE, and now needs yet another inner shifter shaft seal and is leaking primary oil on my garage floor. I am 58 and I ride every single day.
I was trying to be patriotic, and to buy American. What I discovered is that the “image” is tough-guy stupidity, deep pockets, and devil-may-care attitude. Harley will die as soon as the police wise up and decide to quit wasting the taxpayer’s dime on maintenance of these cheap pieces of junk.