Brand awareness plus dealer focus leads to success for Heichelbech
Triumph North America CEO changes culture in quest to make the OEM a bigger player
By Liz Keener
Greg Heichelbech had a busy end of April and early May. In addition to other business trips, the CEO of Triumph North America traveled to New York twice, once for dealer 20 club meetings and another time for a retail summit for the Wharton School of the University of Pennsylvania.
There, the 47-year-old Heichelbech joined executives from Lucky Brand, PepsiCo, Sharpie, Zulily, Walgreens and more in sharing growth and innovation strategies. He was nominated for the panel by GE, likely for the same reasons Powersports Business has chosen Heichelbech as the 2014 Executive of the Year.
Heichelbech, formerly of Harley-Davidson, and his team have brought big changes to Triumph North America, since he took his position at the head of the company in November 2010. Dealer margin has increased; brand awareness has grown; new products have been introduced, and a new e-commerce platform has been built, all within less than four years. And soon Triumph North America will be introducing something no other major OEM has — online sales of motorcycles.
When Heichelbech joined Triumph more than three years ago, the move was akin to crossing enemy lines and picking up the fight from the other side. During his two decades at Harley-Davidson, Heichelbech had studied Triumph closely, as Harley-Davidson, Harley’s Buell and Triumph were often competing for the same customers.
But it was that study of Triumph that drew him to the British brand.
“Harley was great and was great for me and for my career and to me,” he said. “They treated me extremely well, and so to make a change, I had to go to a company that I thought had as deep of heritage, if not deeper, because I’ve got to be emotionally connected to the brand, and so my experience with Triumph as a competitor and understanding their story, understanding their brand and their comeback and fighting and being the little guy, that was really appealing to me.”
Heichelbech started in Harley’s sales department in 1990. Eventually he moved into dealer development before becoming the West Coast regional manager for the high-end Holiday Rambler motorhome brand, which Harley owned at the time. After that, he returned to motorcycles, but this time with the Buell brand, serving in sales and marketing roles.
“Buell was a great fit. It allowed me to explore that and really cut my teeth in a startup company, for a lack of a better word. Erik [Buell] had started it, but it was still pretty much a startup company, with [Harley-Davidson] helping Erik get off the ground, so that was a whole different lane,” Heichelbech explained. “It actually gave me the opportunity to get the experience of work as a startup, but then figure out how to integrate and work within a larger organization and leverage those resources for the startup, so we were constantly going between the two, and they acted and responded differently to different items, or different ways of presenting things, so that was a pretty cool experience.”
During his career at Harley-Davidson, Heichelbech gained a great variety of experience, but he also grew his knowledge by leaning on his peers and supervisors.
“There’s just been great mentors at Harley over the years, whether it be Vaughn Beals or Rich Teerlink. Even though I didn’t get to spend a lot of time with Vaughn Beals, Rich Teerlink was definitely a person who influenced my thinking and how to interact and just be a part of the employee team, the employee base,” he said. “He was a big empowerment individual; he was big into you treat others the way you want to be treated, big into collaboration, and through collaboration, you’re going to get a much better answer, a much better outcome. But ultimately somebody’s got to be in charge, and he was in charge, so he made the tough decisions that had to be done, so he was a great mentor.”
Heichelbech added, “More recently it was guys like Jon Flickinger, who was the vice president of Harley and also president of Buell. He had a long history in Ford and a long history at Harley, and he just brought a tremendous way of looking at the business and researching the business and uncovering hidden value in it and also dealing with people. People would walk through walls for Jon Flickinger, including dealers, so that was another big one.”
As a self-proclaimed performance junkie, Heichelbech also spent many of his Harley years talking shop and riding motocross bikes and snowmobiles with Bill Davidson, Jerry Wilke and Scott Miller.
Though those personalities drove Heichelbech throughout his career in Milwaukee, it was another personality that brought him to Triumph. Heichelbech holds great respect for Triumph owner John Bloor and how he looks at the business, is willing to take risks, considers the long term over the short term and helps employees develop.
“The other thing was just the scope of the work, what I was going to be able to do, how much control and autonomy that they were going to afford me and being able to manage pretty much every aspect of the business, except potentially, manufacturing because it’s done in the U.K. overseas,” Heichelbech said. “That was very, very appealing, and I was just at that point in my life where I had been highly educated by Harley and had lots of experience, and I was just ready for the next step. The opportunity came, and it just happened to be with Triumph, so with all those pieces, I really said, ‘You know what? It’s the right thing for me.’”
Building brand awareness
When Heichelbech took the helm of Triumph North America, he made it clear that one of his goals was to grow brand awareness. Though he says the company still has a lot of work to do in that category, much progress has been made since 2010.
The company’s annual impressions have grown from 28 million to nearly 2 billion, and the Triumph Motorcycles Facebook page for North America has increased likes from about 35,000 to more than 705,000.
Though those numbers are impressive, Heichelbech aspires for the brand to be even more prominent until he says he has “the ability to unaided ask someone about motorcycling, and they say Triumph instead of Harley-Davidson or Honda.”
“Certainly, we’ve made progress, but nowhere where we need to be to take us out of that niche-feeling brand. I’m not going to be a household brand; I’m not trying to be a household brand, but I don’t want to be a small niche brand, either. I do need to be, my opinion, Number 2, Number 3 at the worse,” he said. “We’ve still got a lot of work to do, but the heritage is so steep in stories, and we’re making new stories every day that, man, I’ve got a great palette to pull from and use those to create awareness, and that’s what we’re doing.”
One of the means to increasing brand awareness is entering more markets. Triumph introduced is first adventure bike the same month Heichelbech started at the company, and that segment has performed well since then, with the Tiger Explorer and Explorer XC joining the original Tiger 800 and Tiger 800 XC.
“Getting into adventure was a natural, I think, and it just opened up a whole new set of customer for us, and the Tiger 800 was met with great success; it’s been one of our best-selling motorcycles; it still is today. In fact, it was up just looking this March, it was up like 100-some percent for us in the month of March, and the Explorer was up over 70 percent, so those two products have been great in expanding our reach but also still staying true to our heritage,” Heichelbech reported.
More recently, Triumph has made headwinds into the cruiser segment, with the announcement of the Thunderbird LT and Thunderbird Commander in the fall. Though the Commanders were just hitting showrooms in early May, the Thunderbird LT models are already moving well.
“We showed [the Thunderbird LT] early on at our dealer conference in October, and they weren’t skeptical, but they were hesitant, only because we’ve not been a big player in the cruiser market. They want to be; they see the importance of it, but typically that’s just not been our thing, so they were very optimistic. But what has happened is as the bikes have been shipped to them, the LTs are going out as fast as they’re landing,” Heichelbech said. Dealers are selling out of their orders so quickly that some have been selling their regional managers’ demo bikes during the RMs’ visits, he added.
Though Heichelbech gets a say in which models come to the U.S. — like his decision a couple years ago to only bring in ABS-equipped units — he also occasionally contributes to the production of new bikes. Through his many trips to Triumph headquarters in the United Kingdom, he has developed relationships with builders, so he and his team can share ideas for fresh vehicles or updates. The LT is one such model that the North American team worked closely on beginning two years ago.
“We said the Thunderbird was a great success; Cycle World said it was the best cruiser two years in a row, however the cruiser customer in the U.S., though, demands a windscreen, and he demands nice bags that are of good size, and he needs floorboards, and that seat has to be able to take you on a journey for eight hours without feeling like you just got beat to hell, and you’ve got to have a plugin for your cell phone,” he said. “So all those things were put into the LT. The seat was lowered an inch, and that was another big one. It’s like, ‘Hey, the consumer over here is like standard size 5’8”, we’ve got to lower the seat,’ so they lowered the seat an inch, so they’re listening to us, definitely, and they see the North American market as highly important to their global growth now and in the future.”
For that model, Triumph builders did their research, coming to the U.S. to talk to dealers and attending rallies to gather consumer input.
“They really tried to understand the American consumer. They came to Sturgis; they came to Daytona; they talked to dealers; they talked to customers,” Heichelbech said. “They asked them what probably a lot of the cruiser customers at the time thought were silly questions. ‘What’s this silly Brit asking me these questions for? Doesn’t he get this, how this bike should be?’ But it’s all part of the learning process, and they jumped in.”
So far, it seems, the brand awareness has paid off in terms of sales. Heichelbech reported to Powersports Business earlier this year that sales were up 60 percent over the past three years, and the OEM has beaten the industry’s sales performance for 27 consecutive months.
E-commerce and customer service
Though building bikes specifically for the North American market has been one way Triumph has responded to customers, it has also grown its PG&A e-commerce presence in order to add convenience to buying from the OEM and its dealers.
In late 2012, the company announced the creation of a new e-commerce site in partnership with Bridgeline Digital, Inc., and UPS. Bridgeline launched Triumph’s e-commerce storefront using its eCommerce Fulfilled platform, while UPS manages the warehousing and shipping of the PG&A.
When creating the e-commerce system, Heichelbech was careful to assure that dealers get their fair piece of the pie. As he explains it, he’s in the wholesale business, not the retail business, and Triumph relies on its dealers, so it has no plans to cut them out of the transactions.
When customers order from Triumph’s e-commerce site, the site is branded with their preferred dealership. The dealership’s name then appears on each box and invoice mailed by Triumph. The OEM then gives dealers all of the margin on each item, minus a small service fee charged by UPS.
“What they get is the customer sees it coming from their store; the customer sees it as a 24-hour, 7-day-a-week platform. What the customer sees is excellent, excellent customer service and delivery, so that’s what I want the customer to think about when they think about Triumph dealers, and we can do that on a mass scale and leverage it versus each individual dealer trying to do it all themselves,” Heichelbech said.
Because Triumph now offers 24/7 sales online, the OEM has pushed itself to offer better customer service to its retail customers and dealers. In January, Triumph announced its new 24/7 customer service support, in which representatives at Triumph’s Atlanta headquarters are available via phone or live online chat at all times.
“What [e-commerce] allowed us really to do was first, up our customer service game. It’s kind of weird hearing that about e-commerce, but if you’re going to be in e-commerce, then you better have really good customer service because if you don’t, you’re going to get slaughtered,” Heichelbech said.
The customer service team, which has grown to about 15 people since the 24/7 service was launched, answers 60,000-75,000 inquiries annually. Representatives are required to answer each phone call by the second ring and respond to live chats within a few seconds. It’s a policy that Heichelbech checks frequently, even shooting a live chat to his staff at 10 p.m. on Easter night.
“The team is great. They literally get off on and are motivated by helping customers, and every time they do that, it makes them that much better, and I constantly am congratulating them,” he said.
With that dedication and the new offerings, Triumph has pushed its e-commerce business from nothing to an expected $1.5 million in sales in 2014.
“In the scheme of things, is it a ton of money? No, but that’s not what it’s for; it’s for consumer convenience and the way they want to buy and allowing the dealer to provide that service and allow that dealer to be that shining beacon for Triumph,” Heichelbech said.
Selling motorcycles online
Next on Triumph’s e-commerce docket are motorcycle sales, which are coming within the next 90 days, Heichelbech revealed to Powersports Business on May 1. Though the move comes just three years after Triumph banned dealer sales of motorcycles on auction sites such as eBay, Heichelbech says the sale of bikes from Triumph’s site will be different in that customers will pay full MSRP, freight, setup and any other fees.
“We are going to be the high-cost provider,” he said.
Triumph worked with its dealers to develop an e-commerce system for motorcycles that works for the wholesaler, retailer and customer. Though all dealers will earn retail margin and sales credit for the bikes sold online and delivered in their territory, individual dealerships can choose how involved they would like to be in the process.
“In some cases, the dealer will select that we do a lot of the heavy lifting, and in other cases the dealer is going to select that they want to do some of the heavy lifting,” Heichelbech explained. “What’s the heavy lifting? Heavy lifting is, ‘Hey, I want it out of my inventory, and I want to deliver the bike to the consumer,’ versus, ‘Ship it from your warehouse, and you provide a service for me to deliver to the consumer.’ So we’re trying to offer a range of services that any dealer can benefit from because not everybody’s at the scale where they have their own delivery trucks, or can take care of the customer a certain way, so we need to scale it so all dealers can participate and be successful at it.”
Triumph decided to move forward with online sales as a convenience to the customer, as well as a way for dealers with wide territories to reach those customers on the outskirts who may not be willing to make such a long drive for their final purchase.
“The Internet is just the way it is; it’s revolutionized everything, and we as an industry, we as a brand, we just need to adopt it, and so motorcycles is the next thing. Yeah, it’s a big purchase, but people want to buy and are demonstrating they want to buy when they want to buy at their convenient time, and they do that through the use of e-commerce,” Heichelbech said. “It’s not a play about bypassing the dealer; it’s not a play about taking margin or reducing margin or selling things cheap on the Internet; it’s purely about listening to the consumer and purely about trying to provide them the easiest way to interact with our brand; that’s it. Because if you’re complicated and you’re challenging, there’s too many other brands they can go to, which aren’t even in the motorcycling world that will be happy to take their discretionary dollars, and we need to remember that.”
What he wants dealers to know as this new e-commerce option is added is, just as the OEM did with PG&A, it’s going to continue to work through dealers as the only means of selling vehicles to customers.
“I’ve made the statement very, very clear, and John Bloor and [Triumph Motorcycles Ltd CEO] Nick Bloor have made the statement very, very clear that the dealer is the center of our business and will always be the center of our business. Period. It’s only through them that we are successful. We’re just a customer service provider is the way I’m looking at it,” Heichelbech said.
Throughout Heichelbech’s first few years as the leader of Triumph North America, he has had a keen focus on helping dealers succeed.
Since the he started at Triumph, he has pushed value over discounts and sought many ways to help dealers make more money. At the most recent dealer meeting at Barber Motorsports Park in Birmingham, Alabama, Heichelbech announced a 1 percent margin increase, bringing margin to about 23.5 percent on motorcycles, second only to Harley-Davidson.
Triumph’s goal with that move is for dealers to be able to afford more staff, so they can better serve each customer. Triumph has also encouraged its dealers to share stories about the brand, their own dealerships and Triumph riders, to draw customers in on an emotional basis, rather than spouting specs and features, which a customer can get anywhere.
“Of course, the performance of the motorcycle and the right motorcycle for the consumer is all important, but this is a product that people are buying on emotion, and they’re buying it to say something about who they are or what they stand for or to stand out from the crowd, So they’re not buying it because I’ve got 2 more horsepower than the guy down the road necessarily,” Heichelbech said.
In addition to increasing the margin and sharing Triumph stories with its dealers, the OEM is also offering training online, with regional managers and at the annual dealer conference.
Triumph also has launched monthly mystery shopping at each store, so dealers can benchmark themselves against the national average and even their competitors, which Triumph also secret shops at. Through this system, dealers are paid for performance, as Heichelbech says that’s the best way to get the principal involved.
“What we really want to know, and what the dealer really wants to know is every time a guy walks into my dealership, are my sales guys doing what they’re supposed to be doing, and are they doing it well? And well is talking to every customer, talking to them right away, giving them the story of not only the dealership but of the brand and putting them on the right bike and asking them to be a customer,” Heichelbech said.
With all the changes that Triumph North America has undergone under Heichelbech’s leadership, one of the biggest things he believes he is delivering is a cultural change from the OEM staff down to the dealers.
“I want all of my employees, I want all of my dealers to dream big, and what I mean by that is don’t think about incremental progress. Incremental progress will not get us where we want to be as a brand, as a profitable business, and so many times we get stuck in the idea of, ‘Boy, if we improve 10 percent, we’re really doing good compared to everybody else.’ I don’t care about everybody else; I care about us. And I don’t want 10 percent; I want 100 percent; I want 1,000 percent, and when we think that way, or when we dream like that, we think completely different, and that’s the sauce that you want, the secret sauce,” he said. “But it’s really hard to get them to dream. …
“So then there’s the belief, and the belief is, ‘OK, if I do this big dream, do I believe I can accomplish it, or is it just a bunch of fluff?’ But belief is hope, and everybody needs to have hope, otherwise life sucks if you don’t have hope. And that’s where they known comes in, and known means you’ve got to give them little events, little wins along the way. And so when you do that, then the three start to work together in a circular formation, or a circular equation, and they start believing it and dreaming bigger because the known or event just happened.”
When Heichelbech joined Triumph, he noticed a lack of positivity and a lack of dreaming, so one of his goals has been to create actions that lead to a cultural shift.
“That was the biggest challenge for me because there wasn’t a lot of dreaming big and belief, and there weren’t really any knowns coming in besides, ‘Man, our business is in the tank, and we’re losing money, and we’re discounting constantly.’ So that was a very demoralizing business model at the time,” he said.
Heichelech’s team has grasped on to his new philosophy, and he says it’s the people he works with every day who have really helped lead the OEM to where it is today.
“The thing that I guess I’m the most proud of is the staff that we have and how the staff cares so much about the Triumph brand and so much about the customers, and I mean both the dealer and the retail customer. Without them and what they’ve been doing the last three years, we wouldn’t be where we’re at, and so I think that transformation in the staff is probably my proudest accomplishment,” he said. “It wasn’t just me. I’ve got others, the management team, Don Carleo, my CFO, and Matt Sheahan, my COO, I mean all these guys have helped me with this; it’s not a one-man band.”