Harley-Davidson’s stock price is little more than a third of what it was a year ago, representing a steep decline in the intangible value of its brand.
With motorcycle demand down 30% in the U.S., and a near-total evaporation of the hog-makers ability to write loans for would-be buyers, is the company just another victim of tough times…or is there something flawed in the way the experts routinely celebrated the relevance and utility of its brand?
I think the answer is both.
The marketplace stinks, no two ways about it. People have less money to spend, and are more stingy about spending it. Worse, a lot of folks who would have happily spent other people’s money — i.e. getting loans, or buying on credit — can’t get their hands on it. Every business is suffering.
But isn’t this the very circumstance in which we should see the value of brands emerge, if not get downright monetized?
Harley-Davidson has been a darling of the branding world for years. Offered up as the older-fashioned manufacturing counterpart to high-techs Apple, the emotional attributes of the Harley brand were supposed to be world-class. The logo mattered, and people were willing to not just pay for it, but pay more for it — whether on motorbikes or T-shirts — than they would for lesser-branded competing names.
Harley opened retail boutiques, and served as the case history for every guru who wanted to prove that the emotional, intangible assets of branding made a meaningful competitive difference in the marketplace. Image mattered.
Only it matters less, if at all, when the economy isn’t roaring along. What people think — no matter how fondly or deeply they may react when asked about the Harley logo — turns out to be somewhat irrelevant to their purchase behavior. We might even see specific locations in their minds flash brightly at the mere mention of the company’s name.
But it doesn’t seem to help it sell more motorcycles.
I have to imagine that the marketers at Harley-Davidson know this, and have been working for years to translate of that intangible brand goodwill into actionable expressions, right?
- Community: If hog-owners are brand-loyal, then the brand is probably communications with them a lot — and they with each other — developing a healthy and sustainable after-market business, not to mention up-sells (trade-ins, deals on additional bikes). It would be useless to sit back and think that people simply talking about the brand did anything for the business
- Environment: A motorcycle is a green mode of transportation, though unwittingly and noisily. I’m sure that the Harley brand experts are developing ways to make their products more accessible to buyers who would want such benefits, as well as identifying other segments of customers who might embrace the brand through purchase
- Sales: Recent news reports were that the company’s finance division chief stepped down, and that the function was pretty much dead in the water. Credit market issues aside, I bet the company is developing truly unique and meaningful new ways to help its brand-loyal customers translate their fond feelings into actual purchases. Novel lay-away plans, new classes of stock ownership, or whatever
Or maybe hogs can’t fly?