BMW R1200 GS adventure
John Valk is having the second-best year of his life. Or at least John Valk BMW Ducati (johnvalkbmw.ca) is having the second-best year in its 15-year history. Despite the general slump in the economy, Valk's dealership is more than holding its own in sales.
"I'm not sure why," he says, scratching his head while standing outside his brand new store in Vancouver, the digs he moved into just last December.
It could be that Valk knows his market and his customers. He sees quite clearly that no one in Canada buys a motorcycle out of necessity.
Bikes are lifestyle buys, fashion purchases, whims of fancy and statements about what the rider thinks is important in life.
So Valk carefully cultivates his clientele not just according to the usual formula - reliable service, a no-hassle buying experience, well-stocked parts department - but also in ways that tie him and his store to customers in the deepest possible way.
Two words say it all: road trips.
Earlier this year, Valk put together a stunning 36-day tour of Africa: Cape Town, South Africa, up the eastern coast of Africa, past Malawi, through the Mojave desert and ending somewhere near the supposed region where mankind was said to have begun in Ethiopia. It was an adventure ride. For $25,000, Valk arranged the route, shipped the bikes, booked accommodations and provided technical support.
"Everyone came back without a scratch," he says of the 15 riders who took part in the ultimate relationship marketing event.
The latest ride is now under way, 3,200 km from Vancouver to Dawson City, Yukon. In September, Le Tour d'Amour (Sept. 25-Oct. 11) is a round trip from Barcelona to Paris and back.
The tours make complete sense. Riders more often than not take the trips atop the most popular BMW motorcycles - touring and adventure bikes from BMW AG's Motorrad division.
BMW's most successful model over all in 2008 was the travel enduro BMW R1200 GS (22,845 units worldwide), followed by its sibling model, the R1200 GS Adventure (12,460 units). In third place was the touring bike R1200 RT with 11,001 motorcycles delivered. So nearly half of the 101,685 Motorrad bikes sold last year worldwide were exactly the kind of ride you might take to Africa, Dawson City or across Europe.
Building relationships and a sense of kinship is really at the heart of all the successful motorcycle companies today. At least that's the case in developed countries such as Canada, where motorcycle riding is a choice, not a necessity. BMW riders are part of the BMW club of riders, for instance.
Valk and BMW Motorrad do a good job with this. Valk's road trips are a classic example of creating friends and loyal customers through a shared and powerful experience. This is textbook stuff in the best MBA programs.
BMW is good here, but Harley-Davidson is better. No bike manufacturer has mastered this idea of the rider lifestyle more thoroughly than the Milwaukee, Wis.-based company.
Since emerging from bankruptcy in the mid-1980s, Harley has put a laser-like focus on its revered brand, appealing to baby boomers' desire to recapture their youth and flaunt their iconoclastic way - even if the latter only emerge on weekends and holidays. Harley owners are members of a family of devoted fans. They are not just guys with tattoos, bulging biceps and shaved heads, but also lawyers and doctors and rich business types and entrepreneurs.
The company's Harley Owners Group program, founded in 1983, has more than one million members who come together for rallies and rides, swapping their favourite touring stories and chatting about new product lines. Harley-Davidson Canada has a travelling road show that goes from city to city offering test rides and get-togethers for the committed or soon to be.
"Harley brings together all walks of life," says Deeley Harley-Davidson Canada CEO Don James, who also sits on the parent company's board of directors. "You'll find a neurosurgeon talking and riding with a janitor. It's a family."
Harley builds its brand mostly with offbeat, behind-the-scenes efforts. Little is spent on advertising, though high-profile sponsorships of groups such as the UFC martial arts organization support the "Easy Rider" image Harley has so zealously cultivated. Harley's attention to branded accessories - everything from skull caps for balding boomers to slinky black spaghetti-string tops for female riders - is legendary.
Harley now is in the midst of an evolution of the company's long-time strategy of marketing to the boomers, but the focus on relationships with owners will not go away. Harley's core customers have greyed, James agrees, and they are buying new bikes less often - the average age of a Harley rider is now 49, up from 42 five years ago.
But James and other Harley executives believe there are future opportunities in marketing to buyers 35 and younger. Harley's Dark Custom models aim to appeal to younger riders with a slightly rebellious nature. The latest model in the line, the Iron 883 with its black powder-coated powertrain, is a classic example. The $9,999 price tag reflects Harley's need to reach out to less affluent buyers with less grey hair, or even none at all.
Harley also has its Buell division and many believe it could represent an untapped source of future profits. With bikes like the Ulysses aimed directly at BMW's R 1200 GS Adventure, Buell, says James, is unappreciated, but has potential. Meanwhile, he adds that Harley's core baby-boom generation has 15 more years of riding life.
"They're not about to stop riding because they're getting older," he says. James, himself an avid rider, says he's living proof of the older boomer who still takes to the road regularly and enthusiastically. "It would be dumb to walk away from our core customer, the most lucrative customer."
Still, rivals like BMW, Honda and Yamaha are attracting younger customers who seem less interested in cruising on what their old man rides. North American sales of light sport bikes intended for the younger crowd have increased more than 50 per cent in the last five years. Moreover, the Japanese makers have popular cruisers of their own.
Honda is a particularly strong player and in Canada dominates the marketplace with a range of affordable bikes that compete in virtually every segment.
In Canada and the United States, Honda's motorcycle brand has been built on reliability, durability, performance and value. Honda, because of the breadth of its business, focuses less on the dedicated relationship and events marketing tactics that are the hallmark of Harley and BMW. Yamaha is in a similar situation, though not nearly as large a company as Honda.
All of them - BMW, Harley, Honda, Yamaha and many others - are chasing a relatively small pool of buyers in Canada, so the marketing efforts are both focused and lean.
Last year, sales of motorcycles, scooters and ATVs (all-terrain vehicles) were about one-tenth that of new-car and light-vehicles sales or about 170,000, with an estimated retail value of $2.14-billion, according to the Motorcycle & Moped Industry Council in Canada. Motorcycles and scooters made 53 per cent of those sales, with the dollar value of new motorcycle sales accounting for 51 per cent of the retail total.
To get a personal feel for what's going on in the motorcycle world, we tested some of the latest models. The bikes we rode ranged in price from less than $9,000 to more than $20,000. Those were the sticker prices. The reality is that there are fabulous deals to be had on motorcycles of all shapes, sizes, designs and power trains. Bargain hard if you're a shopper.
One other thing: The appeal of joining the Harley clan or a BMW tour is strong and you may indeed, meet the nicest people on a Honda. But before you buy, spend at least several hours test riding the bike you think you might want to own.
It's called saddle time, and you need lots of it to know whether you can live with and love a bike for the long term.