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What Harley plans to do about its slow-motion identity crisis

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I know you’re probably anxious to read about Harley-Davidson’s financial woes — out of concern if you’re a Harley fan and rider, out of glee if you just want Hogs to go the way of the dinosaur. But first, let me tell you a little something about myself so you know where this perspective is coming from.

In the real world, I work in content marketing. What that means: I get paid to tell interesting and helpful stories about the company that employs me, stories that will hopefully persuade you to buy what that company is selling.

It’s not a terribly difficult job if I’m working for a company that sells great stuff. For instance, I used to work for a biotech company that makes a machine that can sequence a human genome in a few hours. Pretty cool, right? And useful! You can learn all sorts of things about your physical condition when your genome is mapped — for instance, you may be able to determine how likely it is that you’ll develop certain genetic disorders, and prepare for that possibility. Writing interesting material about that biotech company was easy. It’s when I work for a company that makes … less compelling stuff that the challenges arise. And sometimes, the only thing that enables me to be a successful content marketer is for the company to make better stuff.

Which brings me to yesterday’s announcement from H-D that third-quarter earnings were down. New motorcycle sales in Q3 fell in the United States by 2.5 percent, resulting in a net decrease in global sales of 1.4 percent compared to the same quarter last year. These earnings were below analysts’ forecasts, and Harley also reduced its estimates for the number of motorcycles it will ship this year. As a result, H-D’s stock price dropped nearly 15 percent.

The quarter reflects a flat year for the brand. Year-to-date sales figures released by Harley-Davidson show that 217,770 bikes have been sold worldwide, compared to 220,850 sold globally by this time last year. The good news: Sales increased by 6.9 percent in the Asia-Pacific region. The bad news: Everywhere else, sales dropped.

Harley-Davidson Forty-EightAgain, motojournalists everywhere will begin dissecting this news. No, Harley-Davidson is not going to shutter any time soon. Sorry, haters. But it is having a bit of an identity crisis — or rather, its identity is perhaps the key cause of its current crisis. It’s perhaps the worst kept secret in the motorcycle industry that H-D is slowly losing its core purchasing group: upper-middle-class male Baby Boomers are aging out of motorcycling. And despite several years of hard marketing to consumer groups that are outside of this demographic (women, minorities, young and new riders), those core buyers are not being replaced at a strong enough rate to keep sales from dipping. Add to the fact that most Harley models are priced outside of the reach of a large segment of motorcyclists, and the news that H-D is continuing to slip should surprise exactly no one.

Harley-Davidson executives said yesterday the company plans to stop the skid by investing more money into — you guessed it — marketing efforts. Three of the four strategies outlined in the company news release on earnings (and the subsequent investor call) center around marketing: “increasing product and brand awareness” is at the top of the list. (Which begs the question: is there anyone who isn’t aware of Harley-Davidson?) “Accelerating the cadence and impact of new products” comes in at number four.

And this is where my personal narrative comes in. As a relatively new rider, one who lives in suburban southern California, I was pretty excited when Harley announced the launch of its Street models. Here, I thought, was a Harley that I might consider owning. As a content marketing guy, I was thrilled. Here was Harley responding to a shift in its consumer base by doing something different — making an attempt to gain new riders by actually building a bike for them, and not simply spinning their brand’s story.

Whether or not H-D actually made “better” stuff is up for debate; at best, the Street is an imperfect bike. But it can be improved upon, and it is a step forward for a brand whose strategy of selling a lifestyle may be running out of gas.

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