Chris Andersen started his credit card business with the kind of brand loyalty that issuers would kill for.

As vice president for bank card services at Harley-Davidson Credit/Eaglemark Bank N.A., Andersen brags of customers who love the product so much they tattoo the logo on their bodies. "You don't see Nike's Swoosh on people's bodies," he says half mockingly.

Attracting new Users

Indeed, the subculture that is Harley-Davidson has created a potent brand. Andersen took full advantage of that this year when he led the conversion of the company's private label card business into a hot new Visa card that was quickly in the wallets of 175,000 biker fans.

The initial success says much about product development, the need for a robust customer and prospect file and the challenges ahead for a mature credit card industry. For Harley-Davidson, the decision to convert its private label card business into the Chrome Visa product came in 1997 as part of an effort to make the card business more profitable while finding ways to deepen the relationship with Harley customers.

Getting the roughly 100,000 holders of the private label cards to convert was easy enough, given the universal acceptance of the Chrome Visa. But the real issue was how to get more Harley-Davidson customers to take the card-and use it. "We talked to our customers about what was important to them," he says.

The result: A no-fee card offering rewards for using the card and double bonus points when the card is used at Harley-Davidson dealerships and its partners. Each point is an automatic entry into a monthly sweepstakes to win a new Harley.

The company will give away 122 motorcycles, which are valued at $15,000 to $18,000. The bonanza, valued at more than $1.8 million, is believed to be one of the most costly promotional efforts for a card launch. "Now they get to show their Harley pride everywhere they shop by using the card, and they can win a new bike," says Andersen, who has had turns at Advanta, Metris Cos. and First Card. He notes that at least half of the cardholders do not own a Harley and those that already do wouldn't turn down another.

The promotion has garnered extensive press coverage and has helped create a buzz among enthusiasts. That has really helped set the next stage of the new card's launch, which is aimed at non-Harley customers who share a passion for motorcycles.

Another promotion has been Harley-Davidson's PictureCard promotion in which applicants submit a photo of themselves with their bikes to be emblazoned on the card for a $35 fee ($5 of that is contributed to the Muscular Dystrophy Association).

All these promotions point to a reality about the Harley brand: Customers view themselves as part of a unique subculture that may be rivaled only by brands such as Corvette and Saturn. Like Saturn's big homecoming in Spring Hill, TN, Harley draws huge crowds to its events. More than 300,000 enthusiasts attended rallies in Daytona Beach, FL, South Dakota and at the headquarters in Milwaukee.

Another reality is that the cardholders are a demographic segment that most issuers chase. Most Harley customers are male with an average age of 44, a median income of $70,000 annually, and are married with kids in the suburbs. That profile includes two large groups, white collar professionals who see the Harley as a luxury purchase, and skilled blue collar managers with high incomes and a shared passion for the lifestyle represented by Harley.

Partnering Up

In addition to the card, Harley has been cross-selling a Harley-branded travel agency's services; traditional credit insurance offered by Central States of Omaha; and a purchase shield product offered through Metris Cos. So far, those products have been purchased by customers in the low double- digit range. "We've been surprised that we've been able to sell a non- Harley product to our customers," Andersen says.

In a lesson for marketers across financial services, Harley-Davidson has had to build a customer database and prospecting file literally from scratch. Andersen's first order of business was to develop a true customer database to replace the billing system outsourced to Norwest Corp. for the private label card business. That project was given to Minneapolis-based DynaMark, a division of Fair, Isaac & Co.

Partnering with processor Total Systems, DynaMark used its DBAdvantage 2.0 product to extract customer data from the master file maintained by Total Systems. Every month, fresh information on card usage is overlaid to produce a basic segmentation analysis. More recently, the company has begun targeting non-Harley customers who are motorcycle enthusiasts. They have been purchasing lists for magazines such as Easy Rider, Rolling Stone and Cycle World. "They've got a captive audience and a story to tell and that has been a real advantage for them," says Todd Hinrichs, a director at DynaMark.

But if Andersen is to meet his five-year goal of 500,000 accounts, he has to press beyond Harley's fabled customer base. While limited efforts to prospect the enthusiast market are already underway, the campaign for the next wave of growth begins in earnest in January.

That is when Harley-Davidson expects to aggressively begin using its first prospecting database using models now under development by Chicago- based InfoWorks. The future will require Andersen's team to give new customers a reason to replace other cards-a touch-and-go proposition in an oversaturated market. "If we were competing on price, we'd get people, but after six months they'd go away," he said. "Harley isn't about short-term relationships."

After all, tattooed loyalty should be forever.

-J.Racine

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