Thursday, June 02, 2005

Differentiate or Die

“We were getting ready to file for bankruptcy on January 2nd but we finally found a Chicago bank on December 31st that would give us a line of credit….at 23 ½% interest! The New York Times did a story asking, what was the reason for us to exist anymore?” Ken Schmidt former director of communications for Harley Davidson was telling about the revitalization of the American icon beginning in 1986 at a community breakfast I attended yesterday. At the time Harley was losing market share to the Japanese, the quality of its products was terrible and the brand was most closely linked to biker gangs like the Hells Angels. Harley had laid off 40% of its workforce and was down to only making 35,000 bikes/year. The company tried making a line of boats, snowmobiles and even golf carts! Talk about lack of focus. It was a bleak time.

A new motor, the 1340 cc, the first new motor from Harley in over 20 years was introduced to great fanfare by the motorcycle press, but Harley still couldn’t get anyone to try its bikes. Neither they nor any of the other motorcycle manufacturers allowed their products to be test driven because of liability concerns. “But we decided we didn’t have anything to lose. If they hurt themselves and sued us, what were they going to get? The company was worthless. We took our entire promo budget and filled 2 semis with motorcycles. We took them to events for people to test drive and asked them what they wanted in a bike. We had to get in front of them to win their hearts and minds.”

“The Harley Owners Group (HOG) was something that got started by accident, but today there are over 1100 chapters. It has become a huge social club and has gotten people to buy into our image. Today our parts and accessory sales are over 100% greater than our total company sales of only 12 years ago.”

“We are all about noise. It is what differentiates us from the other companies. We’ve made a concerted effort to do business completely different from everyone else. And it has worked.”

Today Harley Davidson sells ten times as many bikes/year as during the mid 80s. They have developed a unique niche by differentiating their product, their stores and their customers. And they concentrate on accentuating that difference to their advantage. You know a Harley bike by its look and sound, its stores by their unique architecture and locations along interstates, and its customers by their wardrobe and ……..well, let me have Schmidt explain it, “When was the last time that you had your company logo carved onto someone’s body. There are Harley tattoos on thousands of people.”

How does this relate to a small town? How are you differentiating your community? At the event the community handed out business cards to show what the top 10 selling points of their community were: 1. Great Central Location; 2. Family Friendly; 3. Higher Education; 4. Great People; 5. Quality Public Schools; 6. Cost of Living; 7. Agricultural Base; 8. Regional Health Care; 9. Low Crime Rate; 10. Community Spirit.

Where is this community? What makes them special? They could be any of 10,000 towns. My guess is that virtually every town in the USA would claim to have 8, 9 or 10 of these attributes. Some could probably add to the list.

Todd Thoman, who does most of our site selection work at Agracel laughingly, has told me in the past, “Jack, I’ve yet to be to a town that doesn’t claim to have the best people, schools and churches. When everyone is promoting the same things, what have you got that is different? What makes you special?”

Harley realized that they had to be different. They’ve built a brand and tremendous following out of that strategy. Why don’t more towns take a Harley approach of thinking and acting out of the box? What can you do to make your town special?

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