Powering Growth Through

Customer Engagement

ATV/UTV INSIGHTS REPORT

Introduction

Engagement Fuels Advocacy

Engagement Drives Business Growth

The Unique Opportunity for ATV/UTV

ATV/UTV Industry Spotlight

Help Customers Get More Out of Riding

Bond With Riders

Ask For and Reward Advocacy

Create Engagement that is Emotionally Rewarding

Inspire, Motivate, and Empower

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CONTENTS

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Powersports riders are a passionate bunch. They love what they do – from trailering out to the middle of a desert for some thrilling trail riding to tinkering and toying with their ride to make it exactly theirs. Riding is a part of who they are — a core component of their identity.

Tap into the excitement these individuals already have. Recognize that love, strengthen it, and bond with them. Empower them and let them become your devoted advocates. Ignite the flames of rider passion so they feed their enthusiasm to others and help do the selling for you. Fuel growth through enthusiasm.

As an overall industry, ATV/UTV OEMs have just scratched the surface of successful customer engagement. This report identifies wide-open strategic opportunities for OEM brands to step up and take the lead.

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Customer Engagement Creates Mutual Value After The Sale

Engagement” is more than an overused marketing buzzword when practiced effectively. Engagement is a personal connection between a consumer and a brand that is strengthened over time, resulting in mutual value. (Rosetta Consulting)

In other words, it is going beyond the traditional “marketing funnel” – which ends when the sale is made – to build relationships with customers in a way that creates trust and activates them as agents and advocates of your brand.

DIALOGUE

INCENTIVIZATION

ACTIVATION

ACKNOWLEDGEMENT

AWARENESS

INTEREST

DESIRE

ACTION

Joseph Jaffe, Flip the Funnel

“

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}Higher Customer Engagement Drives Business Growth

We’ve all heard the 80/20 rule: 80 percent of future revenue will come from 20 percent of current customers. (Gartner). That data point alone should be an impetus to plan how to best satisfy, engage, reward, thrill, and mobilize that critical 20 percent in order to fuel your growth. Focusing on customer engagement can help you move the needle on frequency of dealer visits and unit sales, brand loyalty, future purchase intent, average spend per transaction, and overall growth rate, among other KPIs.

90Buy

more frequently { % 66

Spend

more per transaction

5xAre

ENGAGED CUSTOMERS

more loyal to the brand

Deliver

50higher revenue

growth

% %

Rosetta Consulting

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Competition is Fierce for Limited Active Leisure Time

Those who work full-time manage to watch 1.82 hours of TV on weekdays and 3.05 hours on weekends. Watching TV is the leisure activity that occupies the most time, accounting for more than half of leisure time on average for those age 15 and over. (American Time Use Survey)

Powersports brands are competing for share of customers’ limited leisure time and with their tendency to sit on the couch binge watching television.

20 18 2132

How many hours each week would you say you spend on leisure activities?(by age bracket)

Still, Americans 18-67 have an average of about 20 hours of leisure time per week. (Statista)

In the U.S., customers are taking the least amount of vacation time in nearly 40 years – almost a full week less than compared to pre-2000 levels. (Project: Time Off)

Customers can make time to get out and ride, with effective motivation and inspiration.

18-36 years 37-48 years 49-67 years 58+ years

HOURSHOURS

HOURS

HOURS

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ATV/UTV OEMs Would Benefit From Championing the Sport

Providing the inspiration for more people to get out riding ATVs and UTVs more often requires a champion. And unlike other powersports, ATV/UTV has no clear national industry advocate promoting the sport. By building on and improving the models of leaders in other powersports segments, a smart leader in the ATV/UTV category can build experiences that more deeply engage current customers and bring new customers into the category.

Go RVing RVIA, a coalition of dealers, manufacturers. and campground organizations, has been working to attract more families with children in addition to its traditional 50+/retiree market. They invest heavily in offline and online media – $15 million in 2015 – to drive potential leads to their website. To fuel engagement, the site features many real RVers talking about why they love the lifestyle. Go RVing says: “Our efforts are designed to increase consumer awareness about RVing and deliver bodies … we are doing just that with 35 percent of leads identifying themselves as buyers, 41 percent as rental prospects, and 24 percent as either past or current RV owners.”

Discover Boating The National Marine Manufacturers’ Association’s “Stories of Discovery” content features emotional stories of passionate boating enthusiasts, including a celebrity ambassador, country singer Jake Owen (who also does some work with Polaris and its RZR ATV). In 2014, the campaign generated 3.4 million visitors to its website, a 38 percent increase. More importantly, Discover Boating referred 1.8 million people to manufacturer websites in 2014. Based on these published results, this program is effectively engaging current boaters to help recruit new ones.

INDUSTRY SPOTLIGHT

Polaris is Actively Engaging Current Customers; Other Brands Should Seize Similar OpportunitiesPolaris owns the largest worldwide share of the ATV market (32% in 2013, according to PowerSports Business magazine) and by far the largest share of the side-by-side market (43%). Its customer engagement efforts bode well for continued share growth.

These programs, platforms, and experiences are great examples of demonstrating shared values, fueling the love of riding, getting people riding more, and bringing the community of like-minded ATV/UTV riders together. Real-world events and digitally-enhanced experiences cement the brand bond and create true value for customers.

Camp RZR These major events, which feature demos, 300+ miles of trails, and $200K+ in rider giveaways and concerts, are exciting brand rallies for RZR riders to gather, bond, and celebrate their love of riding and of RZR. Polaris says: “This will be the biggest party on the trail to say “thank you” to all RZR owners who have helped RZR become what it is today.” It’s a smart acknowledgement of the customer and fuels their brand love and advocacy in a big way.

ORV Trails App This useful app helps Polaris ORV riders – as well as snowmobile and motorcycle riders via different app versions – with vehicle management, ride planning, discovering trails and services, and recording favorite routes and photos. So it’s easier for them to get more out of their rides and to share them with friends, making it a more collective, higher-value experience. Polaris benefits from more highly-engaged, active customers and a treasure trove of real-world data on how they are using its products, from which it can learn to create even more value.

INDUSTRY SPOTLIGHT

Bryan Harrold

Help Customers Get More Out of Their Riding

Great product engineering and features are important; however, in 2015, these things are simply not enough. For your customers, real value comes from use of your products. Successful use and participation creates lasting brand-customer relationships.

Creating unique value requires creating experiences that help customers achieve their desired results more successfully than they could achieve them by themselves. “Consumers are more likely to value and pay for outcomes, because with outcomes, they get both the result they care about and a sense of ownership and achievement of it.” (PwC)

ATV/UTV brands will benefit greatly from content, programs, and experiences that improve a wide range of customer results ranging from functional ease of use to excitement and challenge to exploration and having fun with other riders.

Shift from vehicle purchase to customer outcomes

Convenience of transaction

Functional affinity

Emotional affinity

Individual outcome (self-challenge)

Individual outcome (comparison with others)

Collective outcome (interaction with others)

Community and social outcome

Richer interactions – Increasing value

FeaturesImages Features

Individual result Images Features

Individual result Images Features

Collective result Individual result Images Features

Community result Collective result Individual result Images Features

I like this UTV This UTV is a cool brand By tracking my rides on a portal, I can ride more and get better

By comparing my rides with others, I can learn, explore more, and see how I stack up

This company has helped me stay in touch with my friends who like riding and have more fun with them

This brand can help people appreciate the great outdoors and have more fun

Buying this UTV was a nice experience

PWC: Creating post transaction customer value: How digital technologies are reinventing value for customers after the sale9

Bond With Your RidersBased on the Values You Share

Shared values are by far the strongest driver of brand loyalty. Of those consumers who said they had a strong brand relationship, 64% cited shared values as the primary reason. (CEB)

Few brands in the ATV/UTV segment are currently speaking to shared values; it presents an opportunity for differentiation. Do your customers know and feel what you stand for? How could you incorporate your shared values to strengthen your customer relationships?

Polaris RZR Pledge to Ride and National Forest Foundation Polaris also has a Pledge to Ride program encouraging customers to get out riding during the time between its RZR camps. For every pledge, Polaris donates $2 to benefit the National Forest Foundation, which will help restore the national forest system and enhance outdoor experiences for visitors.

Harley-Davidson Riding Academy Military Offer Harley-Davidson’s recent offer of free riding academy training to all U.S. military was a powerful way of activating against one of the most core emotional values it shares with its riders: freedom. Thousands of veterans have learned to ride as a result of this program; thousands of current Harley-Davidson riders have engaged in sharing it.

an example other than H-D Riding Academy Military that is post-purchase focused?

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Mic Smith/AP Images for Harley-Davidson

Ask For and Reward AdvocacyAnother key reason why post-purchase customer engagement matters so much: people are four times more likely to buy when referred by a friend. And 92% of people trust referrals from people they know. (Nielsen) So the “Flip the Funnel” approach (see page 4) drives unit sales. Furthermore, most customers (83%) are willing to refer after a positive experience with your brand; yet only one in three (29%) actually do. (Texas Tech) To increase your advocacy and referral rates, you need to build a trusting relationship and then ask.

The web and social media can be effective channels in which to ask for reviews and recommendations; however, most of the time, they happen in person.

In person Via social network Via email/text message Other

How exactly did you hear about the product from who you know? (Statista)

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Implement a referral bounty program. Ask us about our experience with the Harley-Davidson V-Twin Win program, through which we incentivized friends of devoted Harley Owners Group members to refer friends who ride competitive bikes. It resulted in 13,000 “hot” competitive rider leads, far beyond goals and expectations.

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Looking for a proven way to fuel customer referrals and convert them to new sales?

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The “typical” points-based loyalty program, like the ones that have been widely implemented in powersports dealerships in recent years, do little to build actual loyalty. The number of these programs in which consumers are enrolled continues to climb and as of 2015 is 13.3 programs per member. Participation, however, is declining, with only about half (6.7) of them actively used. (Bond 2015 Loyalty Report) Only about 25% of loyalty programs actually reward customers for some form of engagement. And younger customers, in particular, express high levels of negative sentiment towards “traditional” loyalty programs. (Cap Gemini)

Still, rewards and loyalty programs do matter to customers. We advise:

Redefine the loyalty program. Remember, it’s all about creating more value and better riding results.

Think bigger. H.O.G. – Harley Owners Group – is so much more than just a “loyalty program.” Genuine customer engagement must go way beyond points to creating experiences that fuel passion for riding and are worth advocating.

Be BRAVE. Use the engagement drivers on the following page to think about how your program can create real emotional connection.

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Build a Customer Engagement Program That Is Emotionally Rewarding

64of consumers say having a brand

loyalty program is important{ 72

of consumers say loyal customers

should be rewarded }% %

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Looking for a proven way to fuel customer referrals and convert them to new sales?

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BBelonging

Providing a genuine sense of connection and

community – Being part of

something bigger than

oneself

RRecognition

Acknowledging and rewarding

participation and accomplishment

AAccess

Delivering exclusive content, experiences, and perks available from no other

source

VVoice

Empowering two-way

dialogue with the brand and

community

EEnrichment

Offering inspiration, tools, and motivation to help owners

get the most out of the products and activities

they love

While there is little doubt as to the power of customer engagement, there is also little understanding as to how brands can engage with owners in deeply satisfying ways. The key is tapping into fundamental human needs and emotional drivers. Our experience shows that truly compelling, effective, inspiring engagement comes from delivering value to owners via these five core engagement drivers.

Inspire, Motivate, and Empower

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How Can GS Help? GS is a customer engagement agency for premium durable brands. We create content, programs, and experiences that fuel passion, loyalty, and profitability. Our clients include top brands in powersports and outdoor activities. For more than 20 years, we’ve worked hand-in-hand with Harley-Davidson and Harley Owners Group (H.O.G.) inspiring riders to fuel their dreams, ride more miles, and enjoy remarkable experiences. The result is a worldwide community of brand ambassadors who spread their devotion, spend more on P&A and apparel, and buy more bikes faster.

We would be pleased to share additional insights on how greater customer engagement can increase loyalty and profitability for your organization.

gsdesign.com

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Chris KrasovichBusiness Development Director414.228.9666 x114chris.krasovich@gsdesign.com

Powering Growth through

Customer Engagement

ATV/UTV INSIGHTS REPORT gsdesign.com