RANCHO MIRAGE, Calif. - It never ceases to amaze me that really smart, talented people attribute the success of Harley-Davidson to the quality of the product.
–Ken Schmidt
From the company that has successfully gotten high on the Hog, this advice: Know your credit union’s position.
“Everything you do in your life is positioning,” according to Ken Schmidt. “All the things we do to get more out of life is positioning.”
It was just that positioning–understanding what it truly is, how it can truly be leveraged–that played a critical role in the resurgence of the Harley-Davidson motorcycle brand in the U.S., according to one person who was at the heart of the company’s rebirth.
In remarks before CO-OP Financial Services’ Think 2008 Conference here, Schmidt, the former director of communications with Harley-Davidson, said all the bragging and marketing and positioning around “quality” by numerous companies, including credit unions, is just wasted time and money.
Quality, Quality, Blah, Blah, Blah
“We have a quality product, you have a quality product, so does everyone else,” he observed. “Ultimately it’s boneheaded. It’s all part of the ridiculous language of business. Value chain. Paradigm. Laser focus. What does this crap mean? It means nothing, but we talk about it because we think it’s what business people are supposed to talk about. The problem is that when everyone is saying the same thing, no one listens and people become conditioned to tune it out.”
Schmidt, who rode a Harley onto the stage to begin his presentation, said that no one in his audience had ever bought anything because of someone’s quality or because they advertised that they are in the “people business.”
In the 1980s Harley Davidson was hardly the iconic brand it is today. It was a troubled manufacturer that had been hit hard by Japanese imports, so hard that Congress even imposed a 45% tariff on imported bikes to help protect the company. What the company’s management realized it would ultimately need wasn’t a new ad campaign but a new position. “How many ads do you see in the newspaper from banks and credit unions? Do you remember any of them other than your own?” he asked. “In the 1980s we were in trouble and we knew it. We asked ourselves how can we stand out when everybody is doing the same thing and they are doing it better than we are? We realized everyone was saying the same thing–‘We stand for quality and performance.’ ”
What the company also decided it didn’t need was more crunched numbers. “Data is useless; it’s counter-human. We are not driven by our brains; every decision starts with our hearts. We decided to bypass the brain and go to the heart. Is the purchase of a $24,000 motorcycle a logical and rational thing to do?”
For Harley Davidson, the cardiac connection came in its belief that one of life’s basic human needs goes unmet: the need to be validated. The retail marketplace, said Schmidt, has become a generic world where it’s all “a baseless, faceless, nameless, emotionless, totally forgettable transaction.”
The company sought to create a place or position where people genuinely felt good and realized there were others who felt the same way as they did.
“At the end of the day we do business with people whom we like,” he observed. “When people leave the credit union, at that moment are you creating demand or are you killing it? What do people say when they first come into your credit union? Your brand and position are being created right there.”
It laid the groundwork for its position by loading up a semi truck with bikes, taking them to places where bikers gathered, letting them ride them and then asking for feedback. “We asked, ‘What do we have to do to make you want to own it?’ ”
What A Brand Is Not
Culture, said Schmidt, is what creates any company’s brand. What the brand is not, he stressed, is awareness.
“I say remove the word ‘awareness’ from your vocabulary. I want you to replace it with ‘prefer.’ You are aware of a thousand businesses with which you never do business,” Schmidt observed. “Engage people as human beings. Ask Harley-Davidson owners why they choose a Harley, and you will hear these words: dreams, passion, freedom, individuality. None of that is the kind of thing you find on a survey where you ask people to rate your service on a scale of 1-10.”
