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Harley Davidson success story: difference is something worth paying for

Now Harley Davidson brand is seen as most respected motorized transportation company in the world and the strongest brand in the industry – the only brand in the world that customers love to the point that they tatoo the name of it on their bodies. But that was absolutely not what Ken Schmidt – our speaker here at FORUM ONE 2014 – found when entered the company in 1985 – first as specialist in corporate positioning and media relations, and later, in 1990 – as director of Harley-Davidson’s corporate and financial communications, serving as its primary spokesperson to the media and the financial communities.

By restoring Harley Davidson’s proud image and creating demand for its motorcycles, Ken helped to turn around the company’s ailing fortunes. His obvious passion for the product helped revitalise and reinvigorate a true American institution. Ken describes how any business can strengthen their brand with passion, a new culture and a focus on employee and customer loyalty. His philosophy: “Never do what’s expected. You need to make yourself as noticeably different as possible.”

 

What was Harley Davidson like when you came onboard?

I was very lucky to get involved with HD at that time because it was the absolutely lowest point of company’s evolution. Some people may look at this as a negative – but I see it positive, because I thought: well, it can’t get really any worse!

What were biggest challenges for HD?

We lost touch with the market and aloud competitors to come in and sell the same stuff that we were selling. Only they sold theirs for a lower price. Because people did not get involved and did not feel awesome of what HD was doing, so everybody jumped on low price motorcycles coming from overseas.

We began looking at this in an effort “to safe jobs”: if we don’t fix this – we are going to get bankrupt and all be out of work. (Pretty strong reason to change your place in the market!) A very quick SWOT analysis showed us that everybody that we are competing with in the industry – and ourselves – are saying and doing the exact same thing. Our approaches to the market place were identical: we all talked about quality, reliability and we all gave people a lot of numbers – all that really good (but as we discovered – useless) information.

When everybody is saying the same thing – nobody is listening any more. When everybody presents themselves to the marketplace the same way, nobody is interested in presentation. And that was precisely what we were doing. Because we behaved in the exact same way as our competitors – saying the same thing, doing the same thing – we have send clear message to the market: use your brain and buy the cheapest motorcycle you can get! Buy from whoever is willing to sell something to you at the lowest possible price. That’s what a commodity does, that’s what a poor marketing, lack of vision and not building of brand fans does. We were killing ourselves.

So we began looking at this very seriously. And believe me when I say: we did not know what we were doing! We were bunch of people that liked to have a good time and we were very enthusiastic about what we did, we were not marketing geniuses and all that fancy language that everybody is using right now was not the thing that we were doing. So we said: why are we trying to create a rational, logical reason to do business with us when we are not rational, logical species and we cannot possibly create a rational, logical argument and make somebody spend money necessary to buy our product when you can buy a competitor’s product for half the price. We killed ourselves trying to make sense – we did not understand how human beings work and how the world work.

What was the most important move that helped to change the situation?

Some people may say: HD turned their business around because they “proved the quality of their product”. If you hear this, I want you to lough at speakers face: hey, you think they’ve became market dominated because they have a quality product? But then you may have competitive advantage only if other companies do not have quality. But guess what? Everybody does! Everybody is doing great stuff! In more than 150 countries of the world HD is a predominant heavyweight motorcycle brand and essentially in a lot of these markets we came from an absolutely nowhere. And we did it not by focusing on product or on selling a product. We did it by humanizing our business, by getting intimate with as many human beings as we possibly could by essentially saying that any single person that we meet has an opportunity to say positive things about who we are and what we do and why it’s awesome and desirable. That way we created worldwide network of very vocal ambassadors for the brand.

It took a lot of work but now it works and now every country in the world, where HD does business, see us as distinct and different – and difference is something worth paying for.

Did you face opposition from existing employees?

Yes and no. Essentially we had kind of two things that we were working against in HD: one is that there was very inaccurate public perception of the brand, steeped in negative stereotypes: that we are old and we are antiquated and dedicated to bad people. That was totally false. But the way market describes you is who you are – so no matter what you say about yourself, the market will make their own decisions. In these days the market spoke and said that we are undesirable.

Then internally what we had – was a lot of people who used to work in the business for years and like anybody in any business they used to do things in a certain way. So it was a challenge to get people to look over their world and their business life. But once people in the business saw and understood not only what we were doing but what their role was in making that what we are doing to become a reality, more of them become very contagious with our passion. And when this passion lifted our business, we became more attractive.

How did you broaden the demographic of your customers?

People said that HD owners tend to look older than people that are buying, f.e. sports cars or small performance motorcycles. And it really just equates to where you really are in your life stage. People whose weekends are taken up by children tend to not go out and buy big motorcycles. People that are 18-20 years old might not have the money that it takes to buy a HD motorcycle. So by the time your kids grow up and you become independent, have the freedom and enough money in your pocket to afford HD – you tend to be older. We as a business faced the reality that we are a “life stage” product. And a very exclusive product, because it’s High-End. So we decided to be exclusive but also inclusive at the same time: we said that we can open our arms and make ourselves more desirable and more attractive to women – and HD have done extremely well with that – and to younger people. Because even though the 18-20 year old might not today have enough money or enough time to own HD, they are still attracted enough to the brand. And they might want to identify with it so, that after they get older or they get the money or the time – this is going to be the brand that they’ll stay with.

And what is your perception of social media?

What I tell audiences all the time all around the world: the reason why social media exists at all is because we as human species are failing. And we’re failing miserably: we fail to give people, individuals the fulfilment that they want. We all want to be noticed and we all want to be reacted to, we all want to be made feel good about ourselves, different and special and important. But as we become more digitalized and more spread out as a culture, for too many people the only way to get that fulfillment is in the digital realm. That’s why we have to make that Facebook announcement hoping that someone is going to react with “Like”. And I tell people all the time: the reason why HD is successful, why companies like Apple are successful, is that they learn how important a visible reaction is. Being very passionate, enthusiastic and listening to what people are saying, reacting to it and writing it down and being truly exciting in the presence of other human being is very fulfilling and makes people feel good about themselves. And if you can make people feel good about themselves, they are going to come back to you to get that feeling again. That’s why people want to make motorcycles loud: they are doing that for no other reason when turning engines roar on – just for “look at us” effect. That’s a basic human need, the need to be recognized and to feel present.

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