Harley threads marketing needleCompany balances new rider growth with retaining core customers, brand
Harley-Davidson Inc. is growing sales to customers new to its motorcycles as it seeks to augment its longtime niche with baby boomers.
More than one-third of its U.S. motorcycle sales reported in 2011 were to customers new to the brand, according to the iconic Milwaukee-based motorcycle maker with a factory in York County.
Based on dealers selling nearly 40,000 new Harley-Davidson motorcycles in the U.S. in the first quarter of 2011, and if the company maintains last year's trend, it will have added more than 13,300 riders to the fold in the first three months of this year alone.
The firm also reported this spring that it is continuing to hold a leading market share among female, black, Hispanic and young motorcycle riders.
They are the groups Harley identified as growth targets several years ago, said Maripat Blankenheim, director of external communications.
"We work at it, but you don't know until you see those numbers," she said.
More recent sales improvements by the motorcycle maker come after a rough several-year period that included declining results, significant job losses and restructuring of its factories in the midstate, Missouri and Wisconsin.
In the second quarter of last year, the company finally broke a streak of quarterly U.S. sales declines that stretched back about five years.
To support deepening the well of potential buyers, the company has been leveraging its Facebook page with a growing cache of nearly 4 million fans. People who love Harley love the brand a lot and are eager to join the conversation, Blankenheim said.
For example, the latest evolution of the company's No Cages advertising campaign is E Pluribus Unum, or "out of many, one," which developed from an idea submitted through a Facebook application called the Fan Machine.
The campaign takes a swing at bringing down traditional stereotypes of Harley riders. It includes individual videos of real riders who were cast for the productions using Twitter, the company said.
Harley's efforts also include real-world efforts, such as ongoing events and promotions geared toward women, including Women Riders Month in May and social events for female riders branded as Garage Parties.
The company knows that its core rider group won't be around forever and that it has to look toward developing new audiences, Blankenheim said.
The balancing act, however, comes in making sure efforts don't drift too far from the core product and brand, she said. Baby boomers remain an important part of the customer base, Blankenheim said.
"We're not going to drift far from the guy who brought us to the dance," she said.
The approach is seen in its product offerings, such as with some variations of its Sportster motorcycle to appeal to different demographics, Blankenheim said.
A few years ago, for example, Harley introduced the Iron 883, a Sportster motorcycle, into its stripped-down Dark Custom line to appeal to young people, according to a news release from the time.
All of its motorcycles are still clearly Harleys, she said. And in the end, customers in the targeted niche groups don't want something that strays far from what distinguishes Harleys and has made them iconic, Blankenheim said.
The tactic makes sense because many people in the market already have decided if they are inclined to be Harley riders, said Stephen Erfle, associate professor of international business and management at Cumberland County-based Dickinson College, and the owner and rider of a BMW motorcycle.
Harley has long been on the high end of what could best be described as the "machismo scale" with its appeal to men, but people from many demographics can be pulled under that Harley umbrella, he said.
They might be predisposed to that type of offering but were never previously targeted with the message that they, too, could ride Harleys, Erfle said.
Growing a business can come in three ways, said Bill Stamey, adjunct instructor with the master of business administration program at Lebanon County-based Lebanon Valley College.
A firm can grow among existing customers, develop totally new products for new markets or go after new targets with its core offerings, he said.
Harley's efforts toward the latter tactic make sense, considering its core demographic and the need to not alienate that still-important core customer, Stamey said.
But at the same time, its traditional baby boomer demographic is aging, he said.
The most obvious trap to avoid is going too far beyond the core demographic, Stamey said. From what he's seen of marketing efforts, the company appears to be maintaining that balance well, he said.
"It makes perfect sense to expand that box," Stamey said. "There's no question they had to go younger. At some point, they had to go younger."