Polaris’ Chief Customer Growth Officer talks with The Current Podcast about how many of the company’s customers are multicultural and have preferred style over performance. Episode TranscriptPlease note, this transcript  may contain minor inconsistencies compared to the episode audio.[00:00:59] Damian: I'm [00:01:00] Damian ​Fowler.[00:01:05] Ilyse: And I'm Ilyse Liffreing. And[00:01:07] Damian: welcome to this edition of The Current Podcast.[00:01:09] Ilyse: This week, we're delighted to talk with Pam Kermisch, the Chief Customer Growth Officer at Polaris. [00:01:15] Damian: Polaris was founded 70 years ago with the invention of the early snowmobile in 1954. Polaris takes its name after the North Star, and it's meant to reflect the location of the company's first headquarters in northern Minnesota. [00:01:34] Ilyse: These days, Polaris is the global industry leader in power sports. Offering everything from Indian motorcycles to its off road racers. And all the accessories that go with them.[00:01:44] Damian: During the pandemic, the brands saw a surge of interest in its vehicles as people embraced outdoor activity. Although it started out as a specialized brand, it continues to build on its popularity through its marketing campaign. Think outside. [00:02:03] Pam: Back in 1954, two brothers and a best friend decided they way, faster to get to their location. And they literally strapped a motor to the back of a sled and created the first snowmobile. It was ingenuity at its best. [00:02:20] And when I think about Polaris today, We have recreational vehicles. We have motorcycles. We have off road vehicles. We have boats. We also have utility vehicles that help people do work smarter. And at the end of the day, it's really about getting people outside and helping to have a better way to do things, whether it's working smarter or on the recreational side, having the most epic experiences with your friends and family.[00:02:47] Ilyse: Very nice. Now in 2019, the brand actually underwent a new rebranding with a new Think Outside campaign. [00:02:56] Ilyse: I read that there is a goal to basically grow the base [00:03:00] by 50 percent by tapping into your existing base and finding new customers as well. What was your strategy around that and how has it played out to this point?[00:03:11] Pam: Yes. So in 2019, We really took a look at talking to our existing customers, talking to potential intenders of our brands and talking to people we thought might be interested in what we offer. And we did some great consumer research. And what we learned is at the heart of it, we tapped into what they really care about.[00:03:35] And what we found is what our current existing owners care about. More people could care about. We just had to find the right people. We had to reach out to them. We had to show them how this could fit into their lives and introduce them to our brand. And it's really been a  huge effort the past few years. To find the right people and show them how this could fit in with what they  already do and make it better. And on top of bringing in more new customers, it's also bringing in new people that look a little different than our core customers.[00:04:11] Damian: Very interesting, because when you think what sell in a way, kind of very specialized, I don't know whether I'd it niche. [00:04:22] Pam: you know, I think when you look at household penetration off road vehicles, for example, household - So you're right. It's not something where it's 70, 80, 90 percent of the market has one of these. But what I will say is if you think about some of the audiences. We do attract people love outdoor recreation. love being outside. They love adventure. They might do camping, they might do hiking, they might do fishing. We also think about the people who do property maintenance They're farmers, they're ranchers, They're hunters. So, when you think about those populations, they are much more likely to buy our products. But if you look at the penetration even within those, We don't have 80 90 percent of hunters, so there's still so much penetration opportunity within people who do the activities where it seems like they would really benefit from something that we could offer them. [00:05:26] Damian: Was there a moment when you realized there was the potential to expand the audience? That's so interesting to me and I wonder how you found that opportunity.[00:05:40] Pam:  So I'm kind of a nerd, self admittedly kind of a nerd. And I really think that CRM and data and analytics played a huge role in this journey because prior to [00:06:00] having that type of capability, we actually didn't know how many customers we had. We had customers for decades, but we actually didn't know how many customers. We knew how many units we had sold, but units does not equal customers because you have people who have owned more than one over time. So going back a handful of years, we were able to Get CRM, take our data in, cleanse the data, de dupe our, people and, understand how many customers we had and set some goals and start measuring how many new customers came in each year.[00:06:35] And when I say new customers, some were brand new to the category. Some had owned competitive vehicles before, but never bought from Polaris.[00:06:45] Pam: some may have owned a used Polaris vehicle, but had never bought new from us. So It's not a flash in the pan sort of thing. This is a strategy that we really need to go after. And so it became very intentional to, of course, as the global leader, it's in our best interest to get existing customers and come back to buy again because we have the largest number of existing customers. But we also need to focus on bringing in new people and we've proven we can do it. So let's do it. [00:07:17] Ilyse: And that first party data is huge to any brand. How is Polaris is actually getting your first-party data from customers? Can you explain that shopper journey a little bit? And may how that journey may be different from a traditional auto dealer.[00:07:31] Pam: And Absolutely. So if you buy a car. It has to be warranty registered. So that manufacturer will know that you bought a car from them. So if anything should go wrong with warranty, that they are able to contact you. Very similar, when someone buys one of our vehicles and it gets warranty registered, we receive the customer information.[00:07:54] And we certainly can use third party data to append that, but we know who owns that vehicle. [00:08:00] We also do have people who visit our website. In our dealerships, the majority of them, we call them multi line dealerships. So, they do sell Polaris, but they also may sell Honda, Yamaha, Kawasaki, Can Am. And so, you think of it very to being grocery store being in a cereal aisle, where you have all the competitors right there in the same you may think you're going to the cereal aisle to buy Frosted Flakes and Flip and buy multigrain cheerios. [00:08:32] Pam: A customer can come to our dealership thinking they're going to buy a Polaris Ranger and that salesperson can flip to a Can Am Defender. And so when you think about it, it is in our best interest with marketing to try to get that customer as committed to which brand and which product they want as early in the journey as possible to make sure that they can't get flipped at the last minute at the dealership. [00:08:59] Ilyse: You know, when it comes to digital marketing, because it's such a niche product, are there specific digital channels you've found to have more potential to reach the type of consumers you're trying to reach? [00:09:20] Pam: You know, I would say it's less about it being one particular channel because at the end of the day, our, our customers are, they're all over the place [00:09:31] in terms of their habits, their consumption habits, and whatnot. They're [00:09:34] regular people. But what's more important to us is understanding the people who buy our products. So we do have our owners. We know who our owners are. [00:09:44] And we can do third party data appending, we can do look alike modeling to understand. We can't afford to go after maybe everyone who loves the outdoors. That wouldn't make financial sense. We may not be able to afford to go after everyone who owns one or two or [00:10:00] five acres of property or more around the country or the world. But what we can do is do look alike modeling and use that data with our media partners to try to get more narrowed in on: Who are the right hunters that we should be going after? Who are the right type of landowners? And part of it is not only being able to find the right people but understanding which populations which segments came to our ones ended up buying, and using that info to continually optimize. But also, lot of really, smart things these days where using our current inventory and using that our media to be able to reach out to the right show them this sportsman that you looked at recently is available right now at this dealer down the block and trying to [00:11:00] drive urgency there or using other types of data that we might have.[00:11:04] whether they think they're shopping or not at that moment in time. [00:11:08] Damian: I wonder how you're connecting this because adventure tourism is a big deal right. And that's a growig market. Is that something you're growing into? [00:11:18] Pam: I, I Yes. So, several years ago we started something called Polaris Adventures. So certainly places rented off road vehicles in the past, but oftentimes they were the old ones kind of broken down and it was really important to us from a brand perspective. We're talking about if you're gonna do something from a brand perspective, build your brand. We wanted to make sure people were in the current vehicles, the most modern ones and the ones that we knew were going to give them the best experience. So we created something called Polaris Adventures. And you can go online and you can find Polaris Adventures and you can go to one of 270 locations. [00:12:00] 268 of them are in the United States.[00:12:01] One is in Mexico. One's in New Zealand. And you can rent a Polaris Side by Side Razor. You can rent a Polaris Slingshot, which is a three wheel roadster. Think of a Batmobile. It looks like a Batmobile. it rides on road. You can rent an Indian motorcycle if you ride motorcycles. And so you can do that in all of these different markets. And I'll tell you, even though I work at the company, I have used Polaris Adventures. I've ridden in the dunes in Oregon. I've ridden in the desert in Arizona and Mexico. I've ridden in the mud trails of West Virginia, and all, all kinds of other markets. In each one of those is a different experience because the terrain is very different. [00:12:42] Rock crawling in is completely different being in the and is completely different than being different than dunes in a [00:12:59] Pam: It's an [00:13:00] amazing way to people experience it. And you know what? Not all go buy one some will never buy one. Some may buy maybe at a time in life when it fits them better. And others may just put it in their Instagram feed. And guess what? I promise this. If you were to do this activity and you were to put it, in your Instagram feed, it is the best FOMO ever. All of your friends are, you know, texting. Where are you? What are you doing? and they want a piece of that. So I think it's highly relevant in today's world. And I think we're just playing a part of this growing travel market. [00:13:36] Ilyse: So, much fun. have fOMO right now. just even talking about and you know, it's [00:13:48] Ilyse: You described your family not as the stereotypical sports kind of family, and I would imagine there's a bunch of Polaris customers that wouldn't qualify as the stereotypical power sports types of people. Are there any types of segments that you wouldn't expect that are interested in power sports vehicles?[00:14:00][00:14:08] Pam: So it's interesting if you think about maybe what you would expect to think about from traditional power sports customers. You know, you might think older white male and historically, maybe that's how the category had been, particularly with ATVs and whatnot. Like I said, half of our customers now are younger women multicultural. So let's blow that up right now. But what I will say is going back a number of years ago, We created a product called the slingshot Polaris slingshot.[00:14:40] And like I said, it's a three wheeled vehicle. It rides on road. it's 5. 5 inches from the ground, open air cockpit. and it's very auto like, right? So now you can actually, get one that is automatic or manual. And, When we started with this vehicle, we assumed it was gonna be about performance because that's what a lot of power sports customers like.[00:14:59] [00:15:00] And if you look at it, it kind of looks aggressive, so it looks like it's gonna go super fast. We marketed it. We even did demos on racetracks because it was all about performance. And it was doing okay, not phenomenal. And we actually looked at the data, and the data showed we had a much higher percentage of multicultural customers who own this vehicle, and that was really not typical of the industry.[00:15:25] So we did consumer insights research to understand what brought them to Slingshot, why did they love it, and what we found was they weren't coming in because of performance. It was the style that really appealed to them and they loved that when they drove around in this slingshot heads turned.[00:15:42] And when we said there's something to this, let's start marketing that way. First of all, I think the brand is 40 plus percent multicultural customers today. But on top of that, the white customers that are buying this love style, [00:16:00] The personalization. They love the same what's interesting is when you go slingshot meetups, a lot local groups, clubs that have organized and they all get together. [00:16:10] When you at [00:16:13] Damian: has [00:16:14] Pam: diverse group of people you've ever seen. You multicultural, old, young, it might not be a group of people you ever would have imagined congregating, but they are loving each other and checking out each other's slingshots and talking about getting together and how much they love it.[00:16:32] And it's this common community that has brought these people together. And so I think we've learned some great lessons about. Sometimes you think you know, and one of the number one rules of marketing is, you know, you don't know, don't make assumptions. You need to actually listen to customers, learn from them and be willing to adapt. And that's been an awesome learning and really opened our eyes to opportunity within power sports. [00:16:57] Ilyse: that's a [00:16:57] good [00:16:58] Pam: the [00:17:00] things and to these there's of that look [00:17:11] Damian: vehicles. And then that goes out on social [00:17:13] Pam: is [00:17:13] Damian: that a whole [00:17:16] Pam: know, white Absolutely. You know what? You know what? Here's what I will tell you. Going back, I joined Polaris in 2015 and we had done some research on the Indian motorcycle brand and the path to purchase and[00:17:32] back then, the number one way that people came in on the brand was word of mouth. And that's been probably for centuries and for decades, it's word of mouth. [00:17:43] Pam: And in motorcycles, it might been, know, yes, your friends and family, but go to a truck stop and someone else there and you're checking out their bike you're asking they ask you how you like it. The beautiful thing today that definitely still happens a lot. But with digital[00:18:00][00:18:00] Ilyse: kind [00:18:00] Pam: learn from and share with. People they don't even know. And so you see people when they're shopping for a vehicle, they will ask, how do you like yours? What do you like? What don't you like? And it's authentic word of mouth. And so from a brand perspective, if you create something wonderful and people love it and you make them feel valued and appreciated as customers, then hopefully they're the ones out there selling for you. [00:18:28] Ilyse: You know, you mentioned social media, and typically, at least, the younger generation are on social media. Is it more difficult to inspire those younger generations. They're known for being tied to their technology, I know the pandemic at least many people looked to go outside more. Now that it's more safe, is it harder to inspire those generations to think outside?[00:19:03] Pam: I don't think so. what I will say is getting outside with friends and family and sharing experiences. is something people, especially our younger people love to do. I think a lot of our younger customers will tell you that if they're new to the workforce or if they're in school, you know, they feel handcuffed to their responsibilities. [00:19:26] Sometimes when you get outside, you put the phone in the glove box and you go out for a ride and you just you turn the tunes on. You have a great time. You'll get back to the phone later. No question. And you're going to stop and capture a lot of content and share with your friends on on Snapchat and whatnot.[00:19:42] But it is 100 percent about sharing experiences, and they love that. But I will tell you, going back in time, Innovation has always fueled our category. That's just the new news. People always want the newest, latest thing. And for a long time, it was power, horsepower. Is it more [00:20:00] CCs? Is it, you know, bigger, better, stronger, faster? I will tell you, technology is playing a very large role now in what people are choosing to shop for. [00:20:10] So, a couple proof are, we have something called Ride Command. So, I want you to think about it. If you were off roading or going on a snowmobile ride, you're not on roads. And a lot of times you lose cell service out there. One of the biggest fears people have is getting lost. You're out there in the middle of the woods and you get lost. You're out there in the middle of the desert dunes, you get lost. We have ride command technology that the maps will work even when your cell phone service doesn't work. And that's super helpful. It also has a, capability ride. So say I out with different,[00:20:46] Ilyse: probably [00:20:48] Pam: we want to ride together, but I don't want to ride so close that I'm inhaling your dust or your exhaust. So we out, but you might come to a fork in the road and take a left and I go to the right. Now we lose each other. [00:21:00] That's not fun either. The ride command has a group ride function where I can see all the other razors in my group. So we can ride together. I'm doing air quotes, but we can separate. And then I still know where everyone is. So technology, it's not technology for technology's sake. It's actually making the ride experience better. And I think that is extremely relevant to our younger customers.[00:21:29] called group go five [00:21:32] Ilyse: sales climb. as, as more [00:21:43] Pam: want to spread for sure. You know, well, at my house, you know, at least in the beginning, I was Clorox wiping the groceries. So I think we all kind of have vague memories of those days and. Life wasn't very fun because you were trapped inside unless you could go outside on a walk or do something. And we saw our [00:22:00] business really sore because on one hand, from a recreational standpoint, it was something that you could do safely outside and actually think about off road riding. You could be riding with a bunch of friends and you could each be in your own vehicle. So you were safe. You're wearing a helmet. I spent that first summer of 2020. A lot of weekends out on our boat and out there, the world felt normal. So for sure we saw sales surge. [00:22:27] And we were concerned, though, thinking, Okay, this is great. But when people have other options to spend their money on, are they gonna just trade in all these vehicles and flood the market? And suddenly we're not gonna have a sustainable, you know, healthy business that we've been having. It's not the case.[00:22:47] We actually look very much at our repurchase rates, and we look at short term one year. We look at three year. We look at five year. We look at 10 year. When you look at the one and three year repurchase rates, they are [00:23:00] very healthy and the five year repurchase rate is very, very strong, which tells you that the customers we brought in in 2020, 2021, they aren't just abandoning.[00:23:12] They actually have found something that really works for them and they're continuing to come back and buy again. [00:23:18] And by the way, they're going to tell their friends and family. So we believe that, It's a, good example of I always say never waste a crisis. pandemic was tough for a lot of reasons, but it certainly gave our business a boost and brought in a lot of new customers. And it seems like it's a very healthy population we in.[00:24:36] Damian: That's it for this edition of The Current Podcast. We'll be back next week, so stay tuned. [00:24:42] Ilyse: The current Podcast theme is by Love and Caliber. The current team includes Kat Fessy and Sydney Cairns.[00:24:48] Damian: And remember,[00:24:49] Pam: find the right show them how this could fit in with what they already do and make it better.[00:24:56] Damian: I'm Damian. And[00:24:57] Ilyse: And I'm Ilyse. And[00:24:58] Damian: we'll see you next time. And [00:25:00] if you like what you hear, please subscribe and leave us a review. Also, tune in to our other podcast, The Current Report.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.