Steamboat Springs Former Harley Davidson Communications Director Ken Schmidt debunked before a Steamboat audience peppered with airline managers the successful Sin City advertising campaign that proclaims “What happens in Vegas, stays in Vegas.”
The travel/tourism bureau in Las Vegas is hoping for just the opposite, Schmidt said Wednesday at The Steamboat Grand while speaking to the annual Airline Partners Summit hosted by Steamboat Ski and Resort Corp.
“If you went to Vegas and didn’t tell a single soul what you did there, who in the world would ever go to Vegas?” Schmidt asked.
He suggested that just like the world’s foremost gambling destination, ski resorts need to inspire their guests to go home with the stories of a lifetime to avoid allowing destination ski resorts become mere commodities in the global marketplace.
Schmidt recently had visited Las Vegas for the annual Consumer Electronics Show, which he described as a display of consumer products that once inspired wonderment and now is “a dreadful thing.”
The problem with the show, Schmidt said, is that the revolutionary flat-screen TVs now are mere commodities.
“A Sony TV still costs $2,000,” Schmidt said. “I remember when somebody aspired to having a Sony. The problem the company faces today is that Samsung, Phillips, Panasonic and a variety of other flat-screen makers offer virtually the same product as Sony for a quarter of the price.”
People who engage the rational side of their brains while researching the purchase of a new flat-screen TV might reach the conclusion that they could buy a Samsung for $500 and, even if it stopped working after three years, they could go back and buy several more before they reached the price of a Sony, Schmidt said.
Harley Davidson had to face a similar conundrum in the late 1980s, Schmidt said, and ski resorts also should be wary of the global trend toward commoditization of big-ticket consumer items.
“‘We’ve got a unique skiing experience. We’ve got family fun,’ says every ski resort on the planet,” Schmidt pointed out. “Who doesn’t have that?”
When Honda and other motorcycle manufacturers began building bikes that were the equivalent of $18,000 Harleys for a fraction of the price, the iconic American bike builder saw its sales drop to 30,000 units annually.
Harley realized it still had a mystique among hard-core motorcycle enthusiasts and began attacking its challenge by hosting free, unescorted demonstration rides.
“Harley Davidson is a human-behavior story,” Schmidt said. “They do 40,000 demo rides every year at Sturgis,” S.D.
The real key to the reversal of fortunes at Harley came about largely by accident when the Harley staffers assigned to work demo days began actively engaging those consumers in conversation. From there, Harley refined those conversations to include a critical question.
Harley Davidson made a breakthrough when it began asking participants in demo rides a simple question: “What do we need to change to this product to get you to buy it?”
Harley executives observed that by posing that simple question, their employees could bring about a transformative effect in their customers.
“One-hundred percent of human beings, when asked a question, will answer the question 100 percent of the time,” Schmidt said, “And when people are asked by a company to explain how they would change that company’s product, it flatters their sense of self-worth.
“They see you visibly reacting to what they are telling you,” Schmidt said. “They’re being involved in something they feel good about.”
Instead of touting the engineering and design qualities of Harley to create demand, the company is appealing to the egos of its customers.
“Quality is meaningless as a demand differentiator,” Schmidt said. “If we were trying to use logic to create demand, I wouldn’t be here. We are not a logical species — never have been, never will be.”
Harley Davidson realized it needed to be more responsive to the desires of individual customers.
“The key to human nature? Look at me, notice me, react to me. I am the single most important being in the universe, as it is for every human being born in the history of the world,” Schmidt said.
Today, $24,000 customized Harleys outsell $8,000 Hondas by a large margin in the U.S. and in Japan, where Hondas are made.
And after watching customers spend thousands to make their new Harleys louder and to replace polished-aluminum parts with genuine chrome, the Harley brand team realized that its customers saw the bikes as an extension of themselves.
That led Harley to provide hundreds of options for motorcycle buyers to spend more money in order to customize.
“It was the greatest discovery in Harley’s 110-year history,” Schmidt said.
He hinted that companies from the hotel industry to ski resorts could be differentiating their own brands by asking their customers more targeted questions and by asking those questions face to face.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com