Harley Davidson is very clear about what it is selling to its customers - and it isn't motorcycles
David Fairhurst, August 03, 2011
With a distinctive roar, six Harley Davidson motorbikes swung into the car park of the McDonald’s restaurant where I was meeting with one of our franchisees.
It was a bright summer's day, and the riders were looking uncomfortably hot in their leather jackets. "Here's where we get to see if the customer loyalty gurus are right," I thought, as the bikers wrestled their heavy machines and removed their protective gear.
Harley Davidson is a brand that's very clear about what it is selling to its customers - and it isn't motorcycles. As John Russell, former managing director of Harley Davidson Europe (now CEO at black taxi manufacturer, Manganese Bronze Holdings), once said: "Harley Davidson sells to 43-year-old accountants the ability to dress in leather, ride through small towns and have people be afraid of them."
And Harley Davidson meets these idiosyncratic needs in a way which creates a level of loyalty that, according to Edwina Dunn of Dunnhumby, is unique. As she points out, how many other brands can say thousands of customers worldwide have tattooed the company logo onto their bodies? Apple can claim a few, it seems, but beyond this, examples are few and far between.
Dunn uses this to highlight how incredibly rare 'customer loyalty' is - quite an admission from the co-founder of Tesco's Clubcard programme, and one of the leading experts in what is seen as a key business driver. After all, it typically takes 12 new customers to make up for the loss of just one 'loyal' one.
"To be controversial," Dunn adds mischievously, "I don't think loyal customers exist. It's about brand preference and being part of the 'consideration set' for customers."
Having landed this bombshell, Dunn outlines a bold assessment of the way organisations need to think about customers: loyalty is not about them demonstrating their loyalty to a company - it is about a company demonstrating loyalty to customers.
This is also a challenge to HR's concept of employee loyalty, because the implication is that unless your staff are sporting tattoos of the firm's logo (or acting as passionate advocates of the business in some other way), then maybe you too need to turn current thinking on its head.
Dunnhumby has developed a four-stage cyclical process to achieve this for customer loyalty and its key building blocks are applicable in HR too.
Stage One is the collection of data (shouldn't be too much of a stretch for HR, as most departments are already awash with it). This data is then interrogated in Stage Two to generate insights that inform Stage Three - the creation of initiatives to improve the employee experience. This drives Stage Four, where employees consistently exhibit those behaviours, which sustainably enhance the organisation's overall performance.
Many HR teams will already have a similar process. I would challenge these processes in two important areas.
First, on their overall objective. The process should be looking to enhance business performance by demonstrating the organisation's loyalty to its employees - not the other way around.
Second, that Stage Two - generating insight - is typically missing. As Dunn has found, "people think having data means they have the insight, but actually the insight is the difficult piece". This reinforces the importance of the CIPD's Next Generation HR research, which highlighted the importance of insight, as well as the need for HR practitioners to actively engage in the ongoing debate about the way the HR profession will develop over the next few years.
But let's get back to those over-heated Harley Davidson riders. Sans helmets, they revealed themselves to be short-haired, clean-shaven and middle-aged. And I'm pretty sure I spotted a familiar tattoo peeping out underneath a t-shirt sleeve. True loyalty is only skin-deep.