With minimal marketing budget, manufacturer James Kennedy asks this month’s experts how he can best communicate the personality of his custom-built urban cycle brand, Kennedy City Bicycles
In the four years since founding Kennedy City Bicycles, 29-year-old James Kennedy has put together 671 bikes. He knows this because he’s made them all.
“We’re an urban bicycle manufacturer,” he says, from his workshop in Clapton, east London. “I’m keen to emphasise the manufacturing side because although we sell direct and not through shops, I feel the fact we make them is more important than the fact we sell them. I hesitate to use the word ‘brand’, although of course we are, but we make something. It’s not a case of us having them shipped in and pushed out the door.”
The bikes are sleek in appearance with high-quality parts, discreet branding and choices of handlebars and gears. They start at £700 for the entry-level bike, the frames of which are pre-made to set sizes, then brazed. Medium and higher-tier models, at £995 and £1,395, feature traditional lugged frames, custom-made by Kennedy to a buyer’s exact height and leg measurement.
The former market researcher came up with the idea for the business in summer 2012 when his now-wife Florence was unable to find a suitable town-bike offering both function and aesthetic. “I contacted component manufacturers and asked how much certain parts cost if bought in bulk,” says Kennedy. “After further investigation I made optimistic assumptions on costs and price. You don’t start a business because you think it’s a sure thing, you do it because you want to. Positivity and enthusiasm are a huge part of what makes that successful.”
Re-mortgaging his flat to invest £40,000 into the venture – “nearly £30,000 of that went on parts” – Kennedy assembled the first samples on his living-room floor in January 2013. Six months later, the first 150 bikes’ worth of parts arrived. Wisely, he had saved enough from freelance work to forgo a salary for the first year.
“My father drilled into me that the biggest thing anyone should do when starting a business is to relieve the short-term pressure in terms of earnings,” he says. “You can’t be making short-term decisions based purely on money at the very beginning. It’s not sustainable and you make bad short-term decisions instead of good long-term ones.”
While most bicycles sold in Britain are made in the Far East, Kennedy strives to source as many components as possible close to home. Saddles come from the renowned Brooks of Smethwick in the West Midlands, wheels from Huddersfield, and lightweight steel tubing for the frames from Italy, though smaller solid-metal components are still best sourced from Taiwan.
Turnover has hovered close to £100,000 for each of the last three years on decreasing volumes as customers veer towards premium models, with locally made spokes, copper-plated forks and a lead time of between four to eight weeks from order to delivery.
“We sold the most bikes in our first year, but at a lower price and margin,” he says. “That’s headed in the opposite direction each year, especially as we’ve moved much more of the stuff we do closer to home and created more premium models. It’s not a tactic, it’s just a consequence of the way the market has changed. The first year we didn’t charge as much as we should have but got away with it because we did a lot of volume. They were cheaper, with more components coming from the east, but they were the right price at the right time. For the longer term we needed to be more sustainable… We improved the quality of the components, charged a bit more and spent more time on the construction.”
The fall of sterling since the EU referendum has, inevitably, had an impact. “Brexit cost me in one day about £4,000 in outstanding factory orders from Taiwan and Italy. Consumer demand hasn’t changed but the way we buy things is different. We look to do more things closer to home. That’s not a romantic thing, just the reality.”
And Kennedy doesn’t see much hope of a weaker pound boosting exports. “Seventy per cent of our bikes are sold in the London area, a quarter to the rest of the UK and five per cent to Europe. Tax and duties make it difficult to ship anywhere because costs increase enormously when you export outside of the EU.”
Looking ahead, he wants to continue to manufacture the bikes himself – “I have broadly made every bike we’ve put out” – but foresees a time when the two higher-tier ranges dominate sales. “The idea would be to gradually make the frames that we do ourselves our bread and butter,” Kennedy says. “We’ve not been doing that long enough to say definitely, but the signs suggest that’s the direction we are heading in. Customers find the price is good value.
“Our target customers aren’t crazy hard-core cyclists. I’d call them ‘people with bikes’: they ride one, have good taste and like to spend their money on things that are personal and of value, but that doesn’t make them geeky cyclists. Despite being expensive in real terms – although not particularly so – we’re seen as an accessible brand with class that people want to buy into.
“Our typical customer has started cycling relatively recently with something a bit simpler, enjoyed it and wants to make it their primary mode of transport. They like the personal service and the emotion of having something so tangible and functional that didn’t exist before they bought it.”
This brings Kennedy to his question for this month’s panel of experts. “I want to know how best to convey that it’s a great product with great value and personality. Our customers value the glamour, individuality and pride, because you think very few other people you know will have one. I want to maintain that as we branch out. It is a classic small-business problem. We don’t have money for marketing and advertising but the business has character. We are lucky that people do get in touch, but I want to make sure the design is something people recognise.”
Over to this month’s panel…
How do we tell our story and really establish our personality as a business while making the most of our tiny marketing budget?
Phil Jones Managing director, Brother UK
Experiencing similar issues when advising a bike start-up – a brilliant product with a small budget – the trick we found was to really activate your fans as ambassadors and amplifiers. Scanning your social channels, if you’ve sold 671 bikes, you have 671 fans totally bought into what you do, yet only 23 product reviews on Facebook. Be sure to ask every new customer to assist you in your endeavours and go back and ask current customers to post and share their reviews.
Communicate regularly with them too, binding them into a community of advocates, particularly those with a strong social media footprint. Get a photo of every new customer with their bike, maybe on their first ride, to add to your social content. Using the right imagery – as you’re doing on Instagram – is key to really conveying your eye for detail and design. A good photographer is a wise investment. Similarly, product reviews are an effective way to gain profile. Journalists are keen to highlight stories of entrepreneurs, particularly in manufacturing, and yours is a great story to tell – this piece being a great example.
Phil Jones is a fellow of IoD North West
Stephen Robertson Founder, Metis Partners
People often see a brand’s power in its ability to establish an emotional connection with customers, and it sounds like you want to build on that. Achieving this on a small budget requires creativity and consistency to make it easily replicable. Let’s focus on two stages in the customer experience: first, the bike build; and second, delivery and the bike experience.
After a customer has placed an order, stage one, you could send them emails each week telling them how their ‘baby’ is coming along and what’s currently happening in the build process. Maybe send some quirky pictures to provide an insight into the care you are taking with their bike. This would help build anticipation ahead of the bike’s arrival, and the whole process could be based on standardised emails with minimal tailoring.
Keep customer data and weekly progress in a communication plan, and gather customer feedback in a simple database or spreadsheet as this could be of great value in the future. During stage two, focus on the customer experience – do a survey, get their feedback, ask for quotes and put them on your website etc. Creating a community that buyers can feel part of on social media will allow customers to develop your brand experience for you via their own creative and critical input – just be sure to keep an eye out for the occasional unhappy customer who will need managing. metispartners.com
Stephen Robertson is a member of IoD Scotland
Paul Gosling Commercial director, Bugler Smith
Your bikes sound fantastic, there’s no question you know your market. Reading the Kennedy City Bicycles story just screams “community building” to me. You need to build your tribe and retain them – they are clearly ready to be engaged! You need to set up as many tracking points as possible to collect data from current and potential customers, eg analytics, mailing lists, surveys, face-to-face questionnaires (especially if you’re building the bikes yourself – everyone wants to meet the maker) and respond to their wants and desires.
The ultimate goal in my eyes would be to let the Kennedy City Bicycles customers dictate what they want. This being an age of on-demand instant interaction, you should be thinking about easy, low-cost ways for you to build a relationship with your customers, eg you could hold meet-up rides in London for everyone who’s bought one of your bikes.
And if the buying cycle is four to eight weeks, involve the customer all the way through the journey; send them pictures, blogs, videos etc. It’s important to remember that you aren’t just investing in a Kennedy City Bicycle financially, but as part of a family too. Paul-Gosling.com
Paul Gosling is a member of IoD 99
James Kennedy’s response… Thanks so much to the panel for the advice. I think you’re all right in that there’s plenty of room for proactivity without spending money, and that it’ll be a case of making sure I maintain a connection with the customers after they leave with their bicycle. I think a lot of the time they are keen to send over pictures and that sort of thing but probably think I don’t want to see them. Almost everything we sell is by recommendation so it’s certainly something we benefit from at the moment, but bearing in mind that this all happens without us actively pushing it, this is definitely an area where we still have room for improvement.
What would you suggest to James? To join our virtual board or to seek its advice, email us
Kennedy City Bicycles