HOW MUCH do your customers love you? Enough to have your company logo permanently burned into their skin?
Ken Schmidt, a former director of communication with Harley-Davidson Motor Company, told NATM members a love story about how the motorcycle manufacturer lost customers and won them back.
Delivering the keynote address at the convention, Schmidt said the company faced years of declining sales, alienated customers, and increased competition before finally turning around in a way that is not taught at the Wharton School of Business.
“We did it all without a strategy, without a plan,” Schmidt said. “We just decided to do things differently, because what we had been doing wasn't working.”
At one point, 160 different companies produced motorcycles in the United States. Harley-Davidson, with its headquarters in Milwaukee, Wisconsin, was the last of the American motorcycle manufacturers when poor management, lousy product quality, and indifference to the customer combined to make it appear that the U S would soon be down to zero motorcycle manufacturers.
The company was hours away from filing for bankruptcy when it got a loan at usurious rates that kept Harley's motor running until some new ideas got traction and enabled the company to pop a corporate wheelie.
“We were just trying to save jobs,” Schmidt said.
Gone but not forgotten
One of the first things the company did was radically change the way it promoted itself. Gone were the product-oriented claims and specification-heavy sales pitches.
“Having a world-class product is meaningless when everyone else has one, too,” Schmidt said.
Instead, Harley got emotional. While the public's image of Harley riders may not conjure up images of the tender-hearted, the company discovered customers had felt cheated and unloved. Years of oil leaks and mechanical break-downs left customers feeling scorned and convinced that Harley didn't care anymore.
When management began seeking answers from its customers, it found a lot of anger out there. But management also discovered latent loyalty to a product that was substantially different from its competition.
Harley decided to do what it could to win back the hearts of its customers. The company scrapped its traditional promotions and concentrated on meeting people. Packing two trailers full of Harleys, the company went on a dating binge, courting customers wherever bikers congregated.
“We threw ourselves into the crowd,” Schmidt said. “At first we found that our customers didn't like us, and they didn't trust us.”
Getting it right
By flooding events with Harley personnel, the company asked a lot of questions and got substantial feedback. Customers told them what was wrong and how the company could do better.
But even with a better product and substantially greater involvement with customers, Harley still had a problem — its dealer network.
“Customers told us they were afraid to go in there,” Schmidt said of some of its dealers. “I had to stand in front of our dealers at a national dealer meeting and try to convince them that they needed to spend hundreds of thousands of dollars to upgrade their facilities.”
To encourage dealers to spruce up their locations, Harley conducted a pilot project with two of its dealers in Milwaukee. At a time when motorcycle sales were soft, the two test sites returned their investment in 18 months. They discovered that when they cleaned up their act and stocked the stores with merchandise, women emerged as Harley fans — and customers.
Harley learned that customers are looking for more than just quality. Buying a product is often an emotional process.
“Why else would people pass up high-quality, economical motorcycles and pay a lot more to put their names on our waiting list?” Schmidt asked. “In today's world, people don't care who we are — and we don't want to be invisible. When the lady in accounting comes to work wearing a Harley-Davidson jacket, she gets noticed.”
Schmidt pointed out that the throaty noise that a Harley makes is distinctively different from the high-pitched whine of its competitors.
“Our noise,” Schmidt said. “Noise is how people describe us when we aren't there. What kind of noise does your business make? That's who you are. Is it distinctive, or is it the same noise that everyone else makes? It's not enough to offer a quality product and communicate the benefits. Don't just communicate — connect. You do that by reaching out to your customers and speaking in a language they understand.
“We're doing it loud, we're doing it proud, and we're making it last. Smile more. And have more fun.”