When motorcycle daredevil Evel Knievel attempted the longest jump of his career — 141 feet over the fountains at Caesar’s Palace, Las Vegas, on New Year’s Eve 1967 — he did it riding a Triumph. It was a logical choice given Triumph’s reputation for performance and scorching acceleration. The bike’s 650cc twin platform engine set the land speed record — 214.46 mph — as the world’s fastest motorcycle in 1956, a title it held (save for 17 days) for 17 consecutive years.
Today, Triumph is the fastest growing motorcycle brand in the United States. Not only has Triumph North America experienced 29 months of sales growth, a 157% increase in revenue and opened 50 new retail stores, the company has almost doubled the annual volume of new motorcycle sales on the continent. The high-speed growth of Triumph is the result of an aggressive new strategy driven by North American CEO Greg Heichelbech. But, the journey of this century-and-a-quarter-old icon has been far from an easy ride.
Heichelbech detailed the history of the storied Triumph brand and his vision to make it the market leader at the recent Retail and Consumer Goods Growth Summit organized by Knowledge at Wharton, Wharton’s Jay H. Baker Retailing Center and Momentum Event Group.
The company began after Siegfried Bettmann emigrated from Germany to Coventry, England, in 1885, and began selling bicycles as the Triumph Cycle Company. Three years later, the firm manufactured the first Triumph-branded bicycles and by 1902 had added an engine to produce its first motorcycle. World War I was a boon for the company, which provided more than 50,000 “Trusty Triumphs” — the Model H Roadster often cited as the first modern motorbike — to the Allied forces.
“I pulled the staff together in a conference room and spent the day asking, ‘What’s wrong with your department?’ We ended up with 300 large Post-it notes on the board.”
“The Trusty Triumph saved their butts many times,” Heichelbech noted.
Triumph expanded into automobiles with its purchase of Dawson Car Company in 1921, but it split the car business from motorcycles in 1936. Over the next four decades, Triumph would introduce the parallel twin platform engine, set multiple speed records and race victories, and cement itself as an innovator and performance leader. It became popular with the likes of Steve McQueen, Bob Dylan, Elvis Presley and other celebrities, imbuing motorcycling with a sheen of glamour and dominating motorcycle sales worldwide for extended periods.
The glory days of the 1950s and 1960s came to an abrupt halt, however, with the introduction of the Honda by Japan.
Rise and Fall
“Triumph had a quality problem,” including persistent electrical problems, oil leaks and carburetor issues, said Heichelbech. “The BSA Group bought it and then sold it to Norton.”
Union and management turmoil ensued, and in the late 1970s, the government stepped in and the Triumph brand became defunct. Then in the 1980s, real estate developer John Bloor stumbled onto the Coventry factory grounds. When he bought the land, he also got the rights to the Triumph name. Although the lore is that Bloor had never ridden a motorcycle, rather than bulldoze the factory, he decided to retool it, adopt some of the Japanese manufacturing techniques and create new, innovative, world-class products. A fire leveled the factory in 2002, but Bloor rebuilt it. Then in 2008, when the world financial crisis hit, the motorcycle market collapsed.
“Sales of U.S. motorcycles across all brands dropped from 650,000 units to 375,000 units,” said Heichelbech.
Heichelbech grew up riding dirt bikes and racing motocross. Milwaukee-based Harley Davidson was in his backyard. After earning his undergraduate degree in marketing at the University of Wisconsin in 1989 (later adding an MBA from Loyola University), he decided to apply for a job at Harley. Among other things, Heichelbech noted that Harley was known for its fierce loyalty to American manufacturing.
“If you drove a foreign car, the interview was over,” he added. “I drove a Ford at the time and I got the job.” For the next two decades, Heichelbech steeped himself in the industry, traveling the world on Harley’s behalf and working his way up the corporate hierarchy through positions in field operations, marketing and dealer development. A number of his colleagues ended up at Triumph and suggested he come over.
“I looked at the brand, and it was really the best opportunity out there,” he said, adding that the chance to revive a brand that had once been as strong as Harley was a powerful incentive.
“I wanted it to be the dominant import brand,” he noted. Heichelbech became CEO of Triumph Motorcycles North America, the global company’s largest subsidiary, in November 2010 with responsibility for U.S. and Canadian sales, marketing and distribution. At the time, the division employed 50 people, generated $74 million in annual revenue and distributed motorcycles through 165 dealerships. When compared with Honda, Yamaha, Suzuki, Kawasaki, Harley Davidson, BMW and Ducati, Triumph was at the bottom of the heap in North America. The primary culprits were lack of brand awareness, positioning and distribution issues.
“The idea is to give demo rides” to get potential customers to experience the thrill of the bikes.
“After 20 years in the industry, I knew what was broken,” Heichelbech said. “I pulled the staff together in a conference room and spent the day asking, ‘What’s wrong with your department?’ We ended up with 300 large Post-it notes on the board. It was very helpful in determining the tactical changes.”
The next stop was the 14-member dealers’ council. “We were in Atlanta in January, and there was a snowstorm, of all things, so a one-day gathering turned into living with these guys for three days,” he recalled “Let me tell you, I learned a lot about what we needed to do and how to go to market.” The company’s business model was broken, Heichelbech added, and until the dealers were convinced it was fixed, they were not willing to invest in Triumph.
Infrastructure was a big issue. Triumph still relied heavily on Excel spreadsheets, according to Heichelbech, which didn’t make the company easy to work with from a dealer’s perspective. The ability to match supply with demand was compromised. “We couldn’t ship anything out of our warehouse due to poor systems, bad layout, the wrong inventory and aging inventory.”
In addition, since most motorcycle dealers carry three to five different lines of bikes, they have to work with 10 or more different information portals or dealer management systems. These systems track and automate various components of running a dealership including finance, sales, parts, inventory and administration. The feedback inspired Heichelbech to ditch his logistics department and use UPS for inventory management, a move that raised his fill rate, i.e., the ability to supply dealers with needed product, from 50% to 99%. He also opened a customer service operation that is available 24/7 365 days a year.
“We were the first in the industry to have one for both dealers and our end customers,” Heichelbech noted. “It funnels all calls to Salesforce.com, which also collects all data from social media.” The service line doesn’t rely on voice mail, he added: Within two rings, a representative answers. The operation fielded some 60,000 phone calls over nine months ending this past March.
“Our average close rate on an inquiry is 22 minutes, but it’s often done in just five minutes,” Heichelbech said.
The other big piece of the puzzle was positioning and awareness. Who was Triumph? Consumers wondered, “Are they still in business?” and “Do they sell cars or motorcycles?” Heichelbech noted. He implemented a strategy based around building an emotional connection with the consumer and added some new approaches to the traditional marketing mix, which historically included attending rallies such as Sturgis Week, now in its 74th year, and Daytona Bike Week.
“The idea is to give demo rides,” to get potential customers to experience the thrill of the bikes, he said. “We’d spend $100,000 and see 5,000 people [at the rallies]. The trouble is, half of them are what we in the business call ‘professional demo riders.'”
“I don’t want incremental growth. I want to be number one.”
If you go to Daytona these days, don’t expect to find Triumph there. Heichelbech has found more fertile ground with social media and a partnership with denim company Lucky Brand.
“The deal with Lucky Brand has been great,” said Heichelbech, while noting he’s been able gain broader visibility for the Triumph brand while spending considerably less money than the cost of being at the rallies. For example, Lucky produced a self-promotional video that included Triumph Motorcycles provided by Heichelbech.
“It cost me just two motorcycles and I got 20 million views on YouTube,” he said, referring to a video that Lucky produced that included Triumph motorcycles contributed by the company. He’s also worked with the clothing label to introduce a line of Triumph-branded clothes that includes T-shirts, sweaters and jackets.
“We sell more Triumph T-shirts at Lucky than we do at our dealers,” he added, but he also found a way to boost clothing sales at the dealerships. “I just put it in their stores: 10 leather jackets, 20 shirts, to make it real to our customers, so customers can feel us,” Heichelbech noted. “I gave the dealers 180-day terms to sell them and if they don’t, they can send them back.” Sales of Triumph-branded clothing have gone from $1 million to $6 million in revenue annually in the last few years.
‘I Want to Be Number One’
Heichelbech has also expanded his media advertising buys beyond traditional industry magazines such as Motorcycle World to lifestyle publications including Men’s Journal and Sports Illustrated. But the appeal of his product has broken the gender barrier.
“About 15% to 20% of our customers are female,” he said, spurred in part by Elena Myers, who won the Dayton 200 in 2012, and rider/racer/builder Sarah Lahalih, who is currently customizing a Triumph Scrambler.
Since Heichelbech took over at Triumph, awareness of the brand and its heritage has grown, the number of dealers has increased to 225, annual revenue has risen to $184 million and profitability has increased by 200%. The company has also surpassed Ducati and BMW in terms of annual sales.
“I don’t want incremental growth,” he noted. “I want to be number one.”