Several days ago, I wrote a post on Harley-Davidson’s ongoing strategic marketing failure. That post has garnered quite a lot of attention in certain quarters. Today I had an email exchange about it with motorcycle industry analyst and guru Don Brown.
My previous post addressed how the MoCo was failing in its marketing, but not why. Mr. Brown provided me with some historical context that may illuminate the roots of this problem.
The trouble with Harley, in my opinion, is that they can’t shake loose from their memory of the terrible reaction of many of their customer base – mainly the older baby boomers who hated anything that smacked of being of modern technology.
Since their near-death experience and the resistance of their core customers to technological innovation in the 80s, it seems like the company’s version of “protecting the brand” has become never to do anything different, or innovative.Well, that does bring back some memories, such as the Nova 800 project, a concept for a water-cooled V-4 bike. It went nowhere, of course, although the company spent a pile of money on it, and actually produced three of them.
But it puts the company’s current fear of tarnishing the brand in historical perspective. They are rabid about doing whatever is necessary to protect the brand, as they see it. A few weeks ago, I was reading one of the industry media web sites–unfortunately, I forget which one–and they asked a HD representative about a rumor concerning the possibility of a water-cooled V-4 powerplant. The rep said bluntly, “Harley-Davidson makes V-Twin motorcycles”.
Since their near-death experience and the resistance of their core customers to technological innovation in the 80s, it seems like the company’s version of “protecting the brand” has become never to do anything different, or innovative. They play to the same customer base. They refuse to change their styling beyond shifting what bit of chrome goes where from year to year. And then they do make a change, it consists of occasionally adding non-threating bits of technology like vibration absorbing engine-mounts, incrementally larger engines, or hidden changes to the frame or suspension.
And, of course, to cut motorcycle production any time it appears an inventory may build up, in order to keep supply artificially low, and the prices high.
Now, there’s nothing wrong with that kind of conservatism in the short run. At times–and the 80s seem to have been one of those times for HD–it may even be necessary. But the danger of doing that sort of thing, if it goes on too long, is that it begins to fix itself in the corporate culture. Once an excessive conservatism embeds itself in a firm’s culture, the brand ceases to be an powerful asset to be used in leveraging innovative new products. Instead, it turns into a treasure to be hoarded.
Once an excessive conservatism embeds itself in a firm’s culture, the brand ceases to be an powerful asset to be used in leveraging innovative new products. Instead, it turns into a treasure to be hoarded.But that is never a long-term strategy for success for any brand. Markets change. Customers change. Tastes change. Competitive landscapes change.
Eventually, the brand suffers, because as the market changes, the brand gradually becomes associated with old, outmoded tastes. The brand loses its power to attract new customers, because they think, “That was the stuff my dad liked, back in the day.” That almost automatically means, “I like different stuff,” to the newer customers in the market.
This is precisely what has happened to Harley-Davidson. A corporate mania for brand conservatism has led to a situation in which amazing technologies are available for nearly every motorcycle…except Harley-Davidson. Most GenX or GenY customers won’t even look at a Harley-Davidson. They see the brand they same way they see their parents: old and slow.
That’s true literally as well as figuratively. The Harley-Davidson Sportster, about as light and as fast a motorcycle as Harley makes in stock form, runs a 13-second quarter mile. A 900 pound Gold Wing does it in 12 seconds. A Shadow Spirit 750 does it even faster.
The end result is a brand whose products cost more and perform worse than the competition’s.
A Harley Davidson customer transplanted from 1970 could walk into a Harley-Davidson dealer today, and literally see nothing that would frighten or confuse him.It’s not just the consumer market that’s changed either. The competitive landscape is radically different, too. Harley-Davidson today makes essentially the same motorcycles it’s been making for 50 years. Except for, perhaps, the V-Rod, a Harley Davidson customer transplanted from 1970 could walk into a Harley-Davidson dealer today, and literally see nothing different that would frighten or confuse him.
But what’s even worse, from a competitive point of view, is that he would also see no bike that a young, beginning rider would feel comfortable purchasing. The Sportster has an engine of the same displacement that and FLH had in 1970. It weighs nearly 600 pounds. Even if the average 20 year-old could afford it, it is still an intimidating beast to young new–or female–rider. My wife can’t even pick up any Harley except the Nighster. And she finds it frighteningly heavy even then. She almost can’t even touch the floor with her toes on any other model. That’s not a good thing, when 14% of motorcyclists are now women.
That’s emphatically not true, however, if you walk into any dealer of Big Four motorcycles. A first time rider has an amazing range of choices there, from a sporty Ninja 250, to a Boulevard S40. Yamaha dealers will happily sit a young rider on a V-Star 250, and, for less than $4,000, send him off riding happily into motorcycling world on an easy to ride, light, little cruiser.
And when they do so, they have an excellent chance of sitting him on a V-Star 650 a couple of years later. Or if he or she decides that a need for speed has to be satisfied, why, there’s a pretty little R6, sitting right over there. The Big Four grab beginning riders right out of the box, putting the youngsters astride a little Rebel, and they keep them right up until they take that last ride into the sunset on their Gold Wing.
Harley-Davidson, on the other hand, still acts as if it’s 1968, and, once you’ve exhausted the possibilities available on a BSA 500 or Triumph Bonneville, you have to buy a Harley if you want a big bike, because no one else makes one. But in 2009, you can get the full motorcycling experience–commuting, touring, naked street-fighters, or race bred literbikes–without ever having to change brand loyalty even once.
The Big Four grab beginning riders right out of the box, putting the youngsters astride a little Rebel, and they keep them right up until they take that last ride into the sunset on their Gold Wing.Harley-Davidson has no entry-level motorcycles, so they can’t grab the young 20 year-old looking for a good first bike. Instead, their task is to try and convince a seasoned rider, who has a pre-existing brand loyalty, to change that loyalty to Harley-Davidson. And that rider not only has experience with his preferred brand, but knows that his preferred brand makes similar motorcycles, at a lower cost.
That’s a tall order. Based on HD’s aging demographic, it doesn’t seem like the MoCo is capable of fulfilling it at present. They’ve abandoned the young rider demographic, and in so doing, they’ve let their competitors grab the younger riders and begin building brand loyalty from the very start of their customers’ riding careers.
Unless Harley-Davidson is willing to expand its horizons, it is in danger of becoming a much smaller maker of what are essentially high-priced boutique bikes…much like the brand they recently acquired, MV Agusta. I would hate to see that happen, but absent some serious changes in their corporate mindset, that appears to be the road on which they are traveling.