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Harley-Davidson is one of the world’s most recognizable brand names. Whether a person has ever ridden one doesn’t matter. The name evokes devout customer loyalty and an enduring brand loyalty with its faithful followers.
Brad Marg, Chief Operating Officer, Clutch, recently led a session with Shonna Smith, Marketing Director & Experience Coordinator, Blue Spring Harley-Davidson in Missouri , at the 8th annual Loyalty Expo presented by Loyalty360 – The Loyalty Marketers’ Association, which was held April 27-29, 2015, at the Loews Royal Pacific Resort at Universal Orlando in Orlando, Florida.
Loyalty360 caught up with Marg to discuss the intense appeal of Harley-Davidson.
Q: How does Harley-Davidson continue to maintain the incredibly strong lifetime bonds it has built with customers?
Marg: First, it all starts with building the best products. Harley-Davidson may have one of the most loyal followings in the world, but it could all but evaporate if the quality and performance of their motorcycles significantly declined. Beyond the brand, the challenge for dealerships is even greater since they are focused on trying to gain the trust of customers and loyalty to their locations.
After ensuring the highest standard of its product, the brand is able to focus on maintaining and growing relationships with its best customers. Most companies know their best-selling products and locations, but they don’t know who their best customers are. Harley-Davidson dealerships are able to track their customers on multiple dimensions by collecting and analyzing data across all their channels. Thus they can easily identify, reward, and motivate their top customers, while motivating potential loyal customers as well.
The biggest challenge related to the Harley-Davidson brand is that the product is typically a “once-in-a-lifetime” purchase for most customers. This means dealers have to extend their customers into other product and service lines to increase their lifetime value. This leads to questions like:
Who are the best accessory customers?
What services do my customers need?
What types of customers make trade-ins for newer models?
How can I get more customers like that?
These are all questions Harley-Davidson dealers answer with customer intelligence, ultimately leading to strong lifetime bonds with its customers.
Q: What are some of the challenges associated with managing loyal customer relationships that can last for decades?
Marg: Every brand inevitably experiences churn of loyal customers over the course of decades. The challenge is to reduce the amount of churn. While some long-time loyal customers are quick to defend a brand’s flaws, others are quick to criticize after coming to expect a certain level of standards.
Brands are tasked with having to constantly keep customers engaged with new and exciting features while not venturing too far from the original brand customers love and cherish. Sometimes, less is more and customers prefer the brand to maintain the status quo. Yet other times, customer preferences change and the brand needs to change in order to thrive. Harley-Davidson dealerships are able to manage and optimize these relationships through data analytics and customer insights.
Q: What can other brands learn from Harley-Davidson’s focus on existing customers?
Marg: Harley-Davidson’s focus on existing customers proves there is always room for improvement no matter how strong the affinity for a brand. Although the top 20% of customers drives 80% of revenue for many companies, the average marketing budget mistakenly allocates 80% to customer acquisition and only 20% to customer retention. Brands need to realize the value in economically retaining and motivating existing customers to be more successful.
Rather than focusing on short-term profits from acquiring new customers, brands should focus on building long-term loyalty through the customers they’ve already acquired. By engaging and rewarding customers to become brand advocates, a company is able to strengthen its existing relationships and create similar new ones. This can be done through VIP events, social media, or Refer-a-Friend programs that reward both parties for participating. The key is to increase engagements with successful customers and encourage the advocacy of the brand.
Q: What role does data management and personalized engagement play in helping the Harley-Davidson brand keep up with changing customer behavior?
Marg: Customer behavior is constantly changing and at varying rates. Every customer has a unique buying threshold and perception of value. Thus, they are motivated and engaged differently. Yet many companies are treating all their customers the same because they don’t have the insights to perform better.
Consumer management technology is enabling Harley-Davidson dealers to view all its customers through one holistic view. Within the platform, marketers are able to identify unique behaviors and segment like tendencies to create customer profiles. This allows Harley-Davidson to then implement personalized engagements and drive desired actions.
For example, the service department could identify and target new motorcycle customers who may be due for an oil change and reward them for properly maintaining their bike. Meanwhile the accessory department could send new owners an offer for a free item to spark the habit of buying accessories. All engagements are then measured and improved to optimize the program.
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