What we can learn from Harley-Davidson

Home Editorials What we can learn from Harley-Davidson

by Steven Feldman

When I first sought out the schedule for the National Wood Flooring Association convention last week in Orlando, Fla., I noticed that Ken Schmidt was delivering the keynote speech. I didn’t recognize the name, but when I saw he was the former director of communications for Harley- Davidson, I expected another one of those Zig Ziglar-esque motivational speeches. I couldn’t have been more wrong. Not only was his address on brand building and corporate positioning compelling, but there was a lot for attendees to take back to their businesses. A few nuggets:

1. The premise for building a brand begins by standing out from the pack. “The human eye is drawn to something noticeably different.” He referenced something as obvious as a website, which he said can’t be predictable and colorless. In other words, as he told the NWFA audience, a wood plank with some words on a home page is not a differentiator.

2. The value of the consumer. Harley-Davidson does not view purchasers of its products as customers. “A customer is someone who simply buys something—someone with whom you have a transaction-based relationship. We view the buyers of our products as disciples. They feel so strongly, so attached to their purchase that they will tell stories to other people about the thing they feel good about. Most people who own a Harley-Davidson made the purchase because someone either talked him into it or told him a story. Our job is to ensure they have a great story to tell. When that conversation ends, the ball stops rolling.”

Schmidt asked the audience, “What are the people who you depend on for your livelihood saying about you?” The mistake many retailers make is never going the extra mile. “If all you give them is what they expect and what they have paid for, they are not telling the story to anyone.”

3. When everyone is saying the same thing nobody listens. In the 1980s, Honda starting bringing motorcycles into the U.S. at prices 40% to 60% less than Harley-Davidson. Business plummeted because both companies built their sales pitches around quality and reliability. “It is very difficult to build market preference on quality,” Schmidt said. “Quality is something we fully expect. It has to be good.”

People had no reason for doing business with Harley-Davidson. “We existed in a business where everyone said and did the same things. If we were telling the same story as our competition and they were 50% cheaper, we were telling them to buy the Honda.”

4. In a world where every product and brand leader is the same, you must get people to like you. “We don’t think like a commodity. We don’t get dragged down into the price decision. We have gotten people to like us so much that they are willing to tell others about us.”

5. Statistics on reliability and dependability are not as important as the brand. Demand creation is not statistic driven. “A Harley-Davidson ad says nothing about quality, reliability or dependability. It says four words: Dreams; Passion; Freedom; Individuality. The relationship our employees and customers have is not with the product; it’s with the brand.”

6. Employee attitude. “The single most magnetically attractive trait of all people is passion. We cannot resist the force field of a passionate, energetic person standing in front of us. When we are in the presence of this person, we begin to model their behavior in 1⁄100 of a second. We avoid people who do not enjoy what they are doing, who do not have a passionate aura about them.”

What does this mean in terms of dollars and cents? In 2008, Honda duplicated the top-selling Harley-Davidson motorcycle. There are no major discernable differences between the two. Honda sells that bike for $8,000; Harley sells it for $24,000. Harley outsells the Honda in the U.S. by a 20:1 margin.

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