November 10, 2013

News & Features

Harley-Davidson listens to customers, revs up sales

Bloomberg News


Bill Davidson, great-grandson of Harley-Davidson co-founder William A. Davidson, shows off a 2014 Harley-Davidson Street Glide Special. (Harley-Davidson)

Road hogs are getting high-tech. Harley-Davidson's newest models feature a voice-activated and touch-screen GPS system, the first on a production motorcycle. When the bike is getting low on fuel, the system finds the nearest filling station and maps out directions on a 6.5-inch screen the rider can control by voice, touch or joystick.

What's also new is how the company decided what to include: It asked its customers. For the first time, 110-year-old Harley is using customer focus groups and dealer clinics as it develops models and features.

Sign of success
    Harley-Davidson's third-quarter earnings rose 21 percent, as buyers snapped up the Project Rushmore line of motorcycles introduced in August. "Initial retail sales of the new Project Rushmore motorcycles sparked the largest year-over-year new-model sales increase in two decades," says Harley CEO Keith Wandell.
    The Associated Press

In one example, about three dozen people gathered in a Minneapolis hotel conference room for a few days. They handed over their smartphones at the door, and got early peeks at prototypes and were asked to weigh in on the strengths and weaknesses of the competition's bikes. Harley has staged focus groups as far away as Europe and Tokyo.

A new attitude
"Harley was an 'if you build it, they will come' kind of company," says Sharon Zackfia, an analyst at William Blair & Co. in Chicago. "The recession was really what brought them into the 21st century."

"We've been trying to transform the company in a way that is going to make us stronger and more sustainable in the future," says Keith Wandell, who took over as chief executive officer in 2009. "That's what we said we wanted to do four years ago and, voila, here it is."

For most of its history, Harley sold as many motorcycles as it could make to customers it knew well: older, affluent, white American men. The global recession changed that. Revenue dropped by almost a quarter from 2006 to 2009, prompting Wandell to cut costs, speed development and seek more advice on how to put new customers on bikes, such as women, younger riders and blacks. Since Wandell took over, sales have more than tripled.

"This is truly a monumental mentality shift," says Matt Levatich, 48, Harley's president and chief operating officer. "There was 107 years of inertia."

Diversifying customers

Harley has taken other steps to attract a younger, more diverse crowd, such as sponsoring Ultimate Fighting Championship events. A lot of UFC fans are motorcyclists, says Mike Lowney, Harley-Davidson's director of market outreach.

Harley-Davidson has a website for women motorcyclists and an outreach program with events aimed at women and racial minorities. The company has done more in both areas than other motorcycle manufacturers, according to Genevieve Schmitt, publisher of Women Riders Now, an online publication.

"There is not one other manufacturer that is dedicating resources to attract women riders," Schmitt says.

Appealing bikes
The 2014 model-year bikes in dealerships are an early start to a cadence of new products the company says is the strongest in its history as it seeks new and different buyers.

"The thing that really drove this project was the customer focus," says Bill Davidson, great-grandson of the company's co-founder. "In the past, we'd go out and maybe hand-select a few customers or dealers. This was more sophisticated, global and much more thorough."

Rick Barrett of the Milwaukee Journal Sentinel contributed to this report.


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