Angels
& Devils
"Yamaha, Honda, Kawasaki, Triumph,
Suzuki, BMW, Moto Guzzi - I've had them all. Then
I evolved to my FXRT. It's the mystique and the
heritage that I like… Beat me with a stick.
Whip me with a belt. Flog me with chains hardened
with cold tempered steel. Crush me with huge boulders
dropped from a 70-foot crane. But don't dare deny
me my Harley." Senator Dave Zein, 23rd
Wisconsin District, USA
Here's a test for you: You're committed and dedicated.
You are passionate about what you do. You make
a difference and you know that you are valued.
In short, you believe in your organization.
So here's the test: Are you willing to have a
tattoo done of your company's logo?
It doesn't have to be that big - just a discrete
representation, perhaps on your shoulder blade
or upper thigh. No one will ever see it. Call
it a mark of loyalty.
Not keen on the idea? Because you don't like
tattoos, or because you don't like the idea of
being branded by your company? Perhaps you're
not planning to have that long a relationship.
In a very fluid world, the emotional contract
between company and employee is more fragile than
ever.
And yet, while the employment ties that bind
become looser, so the drive to build 'customer
loyalty' becomes more intense. Customer satisfaction
isn't enough: Loyalty has become the measure of
a successful trading relationship.
And Harley-Davidson is the role model.
The Invisible Company
I'm not a biker, but I love Harley. I watch it,
awestruck, as it continually performs the brilliant
illusion of 'The Invisible Company'.
Right before our eyes, it disappears. We forget
that it's a business.
So here are some bald facts (ponytail not included):
Harley-Davidson (NYSE:HDI) just announced its
19th consecutive record year. It generated $5bn
revenue and its net income grew 17%. It shipped
317,289 units of its twenty-five H-D models and
a second line from its Buell subsidiary.
But that's not what it's about. As Senator Zein
said, it's about mystique and heritage. It's about
Peter Fonda and Jack Nicholson in Easy Rider.
It's about Hell's Angels. It's about the Fat Boy
and the Electra Glide. It's about the 900,000
members of HOG – the Harley Owners Group,
who have elevated a piece of machinery into a
semi-religious icon.
(Take a look at the HOG
website or check out the photos on the 100th
Anniversary page).
Ultimately, it's about having a tattoo of the
company's logo on your arm. Once a Harley owner,
always a Harley owner: your social circle, your
ethos, your identity is defined by 'making the
Harley-Davidson dream a way of life'.
Isn't that the customer loyalty to which the
rest of us should aspire? What would you give
to have an install base that is willing to make
a commitment that's longer than most marriages?
It's the Holy Grail of repeat revenues. Why -
they'll even go to the lengths of making themselves
a walking ad for you. You're in branding Valhalla!
Then you meet someone with MUFC tattooed on his
knuckles.
Seeing Red
Recent events at Manchester United have shown
that there's a fine line between commitment and
obsession. Fans of the Red Devils might be at
the extreme end of the spectrum, but the response
to Malcolm Glazer's hugely controversial £790million
takeover is a warning to any business that thinks
it wants loyalty.
Last time Mr Glazer made a move for the club,
his PR advisers Brunswick were victims of spoiling
tactics, including hacked websites, jammed fax
machines and fleets of surprise taxis.
This time, a militant group calling itself the
Manchester Education Committee has already told
Mr Glazer that 'Man Utd is our club, and we will
ruthlessly protect it'.
Our club - a £170m, publicly quoted company
that includes a 7-day a week pay TV channel, credit
card services in South Africa, Ireland, the USA,
Greece and Malaysia, and the first two 'One United
Cafes' opened in Beijing and Chengdu.
MUFC is an entertainment business (www.manutd.com)
and it's been a long, long time since it was a
'club' run and owned by its members.
During Alex Ferguson's twenty-year reign, Man
Utd has built on the mystique and heritage of
the Busby Babes, Duncan Edwards, Bobby Charlton
and George Best (international names long before
satellite and the internet), to become one of
the premier sporting brands in the world –
and the real reason for Glazer's interest in debt-funding
a P/E ratio of 29 in a sector with an average
of 16.5. Global pay-TV awaits.
But that doesn't matter to people who will name
their first-born after the first team –
even if it's a girl. United is their club, their
brand. Old Trafford is their Theatre of Dreams.
When 'Loyalty' is reduced to collecting points
on a plastic card at the checkout, then it's no
more than a discount on future purchases. Loyalty
is being bought. True loyalty is about belief;
it's an emotional contract.
Man Utd and Harley are both in the dream business.
They tap into a desire to escape, while at the
same time fulfilling a need to belong to something
much bigger, more colourful and exciting than
everyday life.
The question to ask yourself is what emotional
content is there in your customer transaction?
"Doesn't apply to my business: we sell accounting
services".
Wrong – it applies to
all of us.
The best that consumer companies have come up
with is to hope that the customer will keep coming
back to trade in their points. In B2B, the ultimate
loyalty test is much deeper: will your client
recommend you to someone else? After all, in passing
your name onto a colleague, some personal and
professional reputation is being put on the line.
That's as emotional as it gets – because
true loyalty is based on trust.
Ask any United fan. |
