Cover Story: Full Speed Ahead
Thirty years ago, motorcycle parts and accessories marketer J&P Cycles was founded on an aggressive, interactive, customer-centric business model. Today's no different.
The Anamosa, Iowa-based company's approach has since intensified well beyond a liberal returns policy. J&P cultivates customers through superior product knowledge — exhibited by more than 30 experienced motorcycle technicians on staff — its open house/customer appreciation event held each summer — which drew 22,000 people to its headquarters this year, the largest gathering in the event's 30-year history — and a host of other initiatives.
Founded as a mail order cataloger, J&P Cycles has transformed itself over the years into a true multichannel retailer that caters to each customer in the way that customer feels most comfortable. In addition to its catalog, J&P markets via an e-commerce website, which accounts for approximately 29 percent of all sales after growing nearly 4 percent this year. J&P also operates three retail locations, including a temporary store that covers a full city block at the Sturgis Motorcycle Rally in Sturgis, S.D., each August.
"We're not just a mail order company; we're not just an internet company," says John Parham, J&P's founder and president. "We're a well-rounded business that loves motorcycles and supports the sport."
Integration is at the core of all J&P operations. Whether it be putting the digital version of J&P's print catalog on the company's website or blasting an email to customers alerting them to the next event J&P's mobile retail store will be attending, the company realizes the importance of letting customers decide how they interact with the brand.
In many respects, it's natural for J&P Cycles to want to take the utmost care of its customers — Parham and J&P's staffers see themselves in them, all being motorcycle enthusiasts. J&P prides itself on being a leading source of knowledge in the motorcycle industry, offering customers free technical support with experienced motorcycle technicians available on the phone or online.
Mirroring the Customer
"Our employees are the bikers that we sell stuff to," says Rich Brecht, J&P's senior call-center manager. "They have a sense of, 'This is how I want to be treated,' 'This is how I expect to be treated.' That helps us relate to our customer base. The people customers talk to on the phone are riders themselves. Many companies, especially in this tough economy, have abandoned efforts to offer free technical advice. We have hundreds of years of motorcycle experience with our techs, and we offer that up free to our customers. They can pick up a phone and ask, 'How do I install this part?' 'What's the best part for me to buy?' 'What's your opinion on this particular product?' That's a big differentiator for us."
J&P's bond with its customers is evident in the loyalty they reciprocate. Recent surveys the company conducted have revealed that 98 percent of customers say they'll do business with J&P Cycles again. In addition to frequent contact with customers via its call center, email and retail stores, J&P attends more than 50 motorcycle rallies and events each year, bringing along its "mobile showroom semi" truck to interact with its target prospects, and of course to sell its wares to the captive audience.
Making Happy Returns
Consistent with this customer-centric approach, J&P has a liberal return-for-any-reason policy of 120 days — and the company's usually flexible on the day count. "I hate to downplay it," Parham says, "but it's more important than a brand-new order because something has already gone wrong. Something happened that the customer didn't plan on."
After the return process is finished, an internal investigation is triggered at J&P to find the root problem that made the customer return the item. The company's technicians then are tasked with updating the information in the catalog and website with their findings to avoid further returns.
It's the ability of J&P Cycles to be first to market with new products that drives its success, Parham says. But he admits this is becoming harder than it used to be, as more competition has entered the niche, especially online. These companies don't have the infrastructure that J&P Cycles does, making them somewhat more flexible. Couple that with the down economy, and J&P Cycles has been forced to re-evaluate the way it does business.
After averaging close to 10 percent growth over the past five years, this year, like most other companies, J&P has been victimized by the down economy. With "flat" sales — a win for most these days — in an increasingly competitive marketplace, J&P has begun to shift its focus to the web for future growth. While keeping its four catalog titles — Harley-Davidson, Metric Cruiser, SportBike and Vintage — as part of its marketing mix, albeit with reduced circulation, J&P has made significant investments online this year. It's relaunched its website, for instance, and doubled web staff over the past year-plus.
The company's goal is to get its website to account for 40 percent of sales this year, leaving the majority of sales for the catalogs to generate. With a somewhat aging customer demographic in its mid-40s and up, J&P has no immediate plans to abandon print. "The catalog is still the backbone of our business," Parham says. "We're trying to move our sales online more consistently, but reinforce that effort with the catalog and the combination of the two."
Online Spending Up
To that end, the company has increased its spend on search, both natural and paid. It's also in the midst of reworking its affiliate program, paring down its number to the 25-30 top producers from the hundreds it currently has.
"It may be a slow shift, but I think it's one that people will be more comfortable with once they can see the benefit of the website," says Tim Barcz, e-commerce manager at J&P. "We can offer infinitely more SKUs on the website — multiple pictures per SKU, as well as additional information — than we can in our catalogs. If you're looking at a particular helmet, maybe there's a sizing chart specific to the product from the manufacturer that we want to show you. We can do that."
J&P Cycles isn't forgetting about retail. The company is exploring the possibility of opening stores in more locations, including Canada, where it has a strong customer base. Future endeavors also call for a push into the mobile space, as well as continuing efforts to monetize its social media presence — J&P has Facebook and MySpace fan pages and a Twitter account.
While not your typical social media crowd, bikers are slowly adopting the emerging channels. During its recent open house, for example, J&P posted pictures to its Twitter account in real time and drew a steady stream of traffic to the site. Knowing that social media is the wave of the future, J&P wants to make sure it's there when its customers arrive.
"Our demographic is in its mid-40s and up, so that's not your Twitter crowd quite yet," Barcz says. "However, we do know that that generation is the largest growing audience on Facebook. So we're making sure that when our customer base does get to Facebook that we're there already."
J&P is still in an exploratory phase when it comes to mobile marketing. It's currently working with vendors to develop technology that'll allow consumers to use their mobile phones to take pictures of products in its retail stores, then have the information on those products automatically downloaded onto their phones. The company also ensures that every email it sends is formatted to display properly on mobile phones.
As for email, it's long been an effective selling tool for J&P. The company sends several highly promotional emails a week offering the latest sale prices or discounts, as well as its latest product offerings. That's helped the company realize record sales for web-only campaigns this year. Email also works hand in hand with the print catalogs J&P mails, alerting customers when they'll receive them in their mailboxes.
As it continues its push online, J&P Cycles isn't leaving the foundation on which it was built: superior customer service based on personal relationships with its customers, regardless of channel. Whether it be a conversation with a sales rep at a motorcycle rally, a phone call to the company's call center or a live chat online with an experienced motorcycle technician, J&P Cycles remains dedicated to bikers as it rides the bumpy road into the future.