Experts say that if Milwaukee-based Harley-Davidson Inc. is going to survive in the future and grow its sales, the company needs to successfully connect with its next generation of riders.
Over the last two years, the company has taken steps to do just that. Harley says it has become the leading manufacturer of motorcycles that sell to customers younger than 34 years old. Harley has accomplished that without drastically changing the types of products it makes or lowering prices to penetrate that younger market.
“We’ve been around for 107 years, and we’ve gone through these generational transitions before,” said Mark-Hans Richer, senior vice president and chief marketing officer with the company. “Many radically different generational cultures have come and gone and have found their way to Harley-Davidson. We don’t see any different challenge (connecting to young buyers today) than the same set of challenges that we’ve been through many times before, but it certainly has unique aspects to it. We found that Harley-Davidson just being Harley-Davidson is a very appealing thing with young adults. There’s an essential and authentic cool factor to it that translates very well from generation to generation, but it translates differently.”
The company began collecting demographic information about its customers in 2006. Previously, Harley did not collect age, gender or ethnic information about its riders.
For 2006 and 2007, Harley-Davidson was not the top-selling motorcycle company to customers 34 years old and under, Richer said. He declined to name the top-selling company or give Harley’s position for those years.
However, the company became the best-selling motorcycle to young riders in 2008, and it has grown that position since, Richer said.
“We didn’t lower our prices, and we didn’t come out with some sort of new scooter or a sport bike,” he said.
Harley-Davidson has launched several products, including a line of bikes called Dark Custom (launched in January, 2008), aimed at younger riders. The Dark Custom line consists largely of existing Harley bikes that have flat black paint, much less chrome and toned-down styling.
“A young adult customer, they’re not looking for a big chrome cruiser,” Richer said. “They’re looking for something that represents their unique individuality, that represents something cool, some level of cache and accomplishment, but also a different style – more blacked out, more authentic, more stripped down.”
The Dark Custom line has grown from a single bike in January 2008 to six different motorcycles today. Two of the models – the Iron 883 and the Forty-Eight – have become best-sellers to young riders.
“In January of 2009, we launched the Iron 883, and it became the first Harley in 10 years that sold more than half of its volume to young adults,” Richer said. “And that was a not based on a price move – that’s an $8,000 motorcycle, which sells for $1,000 more than our least expensive bike.”
Last January, Harley introduced the Forty-Eight, which has become the company’s fastest turning motorcycle, meaning that it sits on the showroom floor for the shortest amount of time of any of the company’s models. The Forty-Eight starts at $10,499.
“All of this is happening as the economy is melting down,” Richer said. “You’d think in an environment like this, price would rule above all and if they had a chance to buy a less expensive Honda versus a more expensive Harley, you’d think they’d just buy the Honda. We’re happy to say that we’ve not followed our competitors into the discounting wars, and that’s allowed us to have an even better strength in a very price sensitive environment.”
Reaching new riders
Harley-Davidson has taken an active role in reaching out to new customers – younger people, women and minorities – through a variety of channels.
The company has successfully engaged riders in their 20s and early 30s through social media and in-person contacts, Richer said. Harley’s Facebook page has almost 900,000 fans.
“More than half of those are young adults, and it’s also global,” Richer said. “That shows you the will, the actions, the wanting to have an engagement with us and wanting to pay attention to what it is that’s going on. It’s a fantastic set of relationships to have.”
In late 2007, the company became the first large-scale national brand to sponsor the Ultimate Fighting Championship (UFC), a mixed martial arts league that has become extremely popular with young consumers.
“About six months after we got into it, Anheuser-Busch decided to follow our lead and put in even more money than we had and they sort of kicked us out of the center octagon,” Richer said. “But we’re still there and quite happy to be there. The demographics are quite good, the attitudinal fit is good, and it’s a great, high-scale way to reach that attitudinal, more young adult customer.”
Harley-Davidson has also made in-person connections with new potential riders at music festivals such as South by Southwest in Austin, Texas, and Bonnaroo in Manchester, Tenn. At those festivals, the company creates an interactive experience with its bikes called Jump Start, which allows novice riders a way to feel what it’s like to ride a Harley.
“It (uses) a very simple dynamometer – you can fold it up and carry it with you,” Richer said. “A motorcycle on it is fixed, so it won’t fall over. Anyone can get on a bike, push the button (to start it), work the throttle, feel the friction of the clutch and work through the gears and get going. You can take that baby up to 40, 50, 60 miles an hour and feel what it’s like to ride and feel and hear a real Harley-Davidson even though you may have never sat on a motorcycle before.”
The Jump Start program also helped Harley connect with women interested in motorcycling. The company took some of its dynamometers to Garage Parties, a series of woman-focused events at dealerships that drew more than 25,000 potential customers earlier this year.
“Many of these women had no context and were not sure what to expect,” Richer said. “I have not seen a customer of any type, age, any demographic – I have not seen any of them who have not lit up as soon as they got going. The visceral emotion that comes out of people when they do this for the first time is really incredible.”
By connecting with younger riders through social media and in person at events, Harley-Davidson has been able to gather important feedback, which has played a large role in how it reaches out to those customers, Richer said.
“Authenticity is a really critical thing for young adults and frankly, for everybody,” he said. “And that is something where we really hold the space, and unlike a Toyota, we don’t have to go out there and create a Scion. We don’t have to run away from our main brand in order to be appealing to that younger set of customers.”
In the case of the Dark Custom series, Harley just needed to tweak some design elements, while focusing on its heritage message of freedom, individual expression and shared experience that have resonated with earlier customers.
“And it’s also about having fun,” Richer said. “We don’t want to over-think it too much. We want to enable those good times that are had through our sport and our brand and let them express themselves through it.”