Reference no: EM132278014

Can Harley-Davidson ' s Community Revitalize the Brand Yet Again?

Back in the 1980s, amidst a declining American economy and increasing competition from foreign manufacturers, Harley-Davidson Motorcycles made history. Paired with several other key initiatives, it launched one of the first official brand communities, connecting its customers to one another. That is how Harley Owner’s Groups (H.O.G.) were born in 1983. Since then, Harley Owner’s Groups have been credited with saving the company from bankruptcy and being “the most successful community building effort ever engaged in by a company.” Today, Harley faces challenges to growth and innovation again: Talk of trade tariffs has led it to shift its manufacturing away from the US so it can continue to grow in competitive markets throughout Asia. Its most loyal customers are aging and it has failed to appeal to Follow 5,006 followers 1/21/2019 Can Harley-Davidson's Community Revitalize the Brand Yet Again? https://www.cmswire.com/customer-experience/can-harley-davidsons-community-revitalize-the-brand-yet-again/ 2/6 younger riders. And Harley has so far been unable to meet rising customer expectations, as it struggles to keep its in-person experiences on par with the digital. On July 30, Harley CEO Matthew Levatich presented the company's "More Roads to Harley-Davidson" growth strategy, and it’s aggressive: it plans for annual revenues to grow $1 billion by 2022. To get there, Levatich says the community must become more diverse, stretching into new markets and urban areas throughout the world. Nearly 40 years after the dawn of the “most successful brand community effort,” how can Harley evolve its community as a tool to grow business without alienating its loyal riders? Here are three places it should start: Extend the Brand to Include Connective, Digital-First Experiences in Urban Centers Among Harley’s other plans for expansion, it will open up to 125 small storefronts in urban locations, both permanent and pop-up. The expansion demonstrates Harley’s acknowledgment that it has a new type of customer to serve: urban, busy and young. In order to serve these customers and create new communities beyond the H.O.G. chapters, Harley should take a page from Nike’s digital playbook: create digital-first experiences that help customers meet in real life. These experiences will begin to build new communities of customers who are digitally-savvy and want to use technology to catalyze an in-person connection. Nike has fought off fierce competition from Adidas in the last year while growing into new markets by building these kinds of experiences. Under the strategic direction of chief digital officer Adam Sussman, Nike has created digital-first experiences that serve niche communities of “sneakerheads.” It's executed augmented rea 1/21/2019 Can Harley-Davidson's Community Revitalize the Brand Yet Again? These experiences tailor the brand to existing communities without alienating its other customers. Last year, as a result of these digital-first community building efforts, Nike’s overall business grew 6 percent and its direct sales grew 16 percent. Related Article: Digital Customer Experience Isn't Child's Play. Just Ask Lego Treat – and Train – Dealers as Community Organizers Harley’s local dealer network is the heart of the company’s H.O.G. program today. CEO Levatich has promised to strengthen Harley’s Dealer’s Initiative, and this should mean fostering these dealers as the “glue” of their communities. The greatest asset Harley has is still the in-person community these dealers enable — and by developing its dealers’ community skills, they can have an even greater impact. This would not only recognize its current community’s contributions but would also allow these members to become far more powerful advocates for Harley’s brand values in a way that resonates best in their locales. Training leaders to do powerful work and tailor their approaches to their community’s needs is precisely how political campaigns achieve success in today’s challenging civic environment: they train leaders on the ground to train other leaders, who all work together to speak directly to voters. This works for brands as much as it does politicians, as booming retail brands like AllSaints have discovered. Harley could train dealers in all kinds of key community-building areas, such as effective outreach, inclusion (a lesson Starbucks learned the hard way for its storefronts), event management, and how to identify and nurture leaders in their local communities. Given that Harley will expand into India, other parts of Asia, and into densely populated urban areas globally, dealers cannot employ a one-size-fits-all strategy for connecting with customers. No central brand can be all things to all people, but decentralized communities run by grassroots leaders (who are well-resourced) can get us much closer. Related Article: Don't Base Your Brand Community on Hope: Research Matters Bring Together Offline and Online Communities and Experiences Harley-Davidson expects online or digitally-influenced sales to account for 99 percent of customer retail growth over the next five years. That means the online experience must seamlessly tie into Harley’s other brand experiences if it's to deliver on these projections. 1/21/2019 Can Harley-Davidson's Community Revitalize the Brand Yet Again? https://www.cmswire.com/customer-experience/can-harley-davidsons-community-revitalize-the-brand-yet-again/ 4/6 0 Comments The company's a far cry away from that now. Today, Harley’s online presence consists of its website and social media channels, but little in the way of personalization or consistent experiences offline. Its H.O.G. chapters themselves are all run on dealership-managed websites, which vary in their designs and user experiences. This makes it hard to build trust among new customers, especially those who expect exceptional digital and physical experiences. For an example Harley can follow, take Sephora, the global chain of beauty stores, which is growing consistently despite flagging retail sales worldwide. The company launched 70 new stores in 2017 alone. Sephora’s online app combines a thriving online community of makeup enthusiasts, a loyalty program and augmented reality makeup try-ons in one place to create a personalized and connecting experience for new and loyal customers alike. This provides the perfect starting point for new customers while giving existing customers a space to share what they already love about Sephora’s products. The company successfully brings all of this together in the offline world, when customers come in to pick up orders, get personalized makeup tutorials from makeup artists, and shop in the new Sephora Studio stores, where they get even more personal attention. Like Sephora, Harley is often viewed as a luxury retail brand in the US, and Sephora can act as an unlikely muse for Harley’s community strategy. Related Article: Lessons For Online Communities From the Mickey Mouse Club Is Harley Up for the Challenge? No doubt that all of these changes will require massive cultural and strategic overhaul at Harley-Davidson. It faces a time of great uncertainty, and there are no easy answers to how to integrate new members into long-existing communities. What is certain is if Harley wants to continue to be a true symbol of American innovation, it will choose to take this challenge and show the rest of us just how brand community is done. About the Author Carrie Melissa Jones is a community leader, entrepreneur and researcher who has been involved with online community leadership since the early 2000s. She is currently the CEO of Gather Community Consulting.

1. To enlarge its customer base, what would you recommend Harley do to cultivate long-term relationships with a younger audience, aged between 18-34?

2. How does Harley-Davidson build long-term customer relationships?

3. HOG is the stock symbol for Harvey. It was a penny stock which means WS expects the firm to disappear. But Harley turned around and it is among the great American turnaround stories. If you invested $10000 in Harley at 0.24/share, what would be today’s value?