Tesla Motors is the pioneer in the electric car manufacturing industry. It is the most compelling car company in the world at the moment so it doesn't come as a surprise that the Tesla marketing strategy is something out of the ordinary as well.
How has a company founded in 2003 had more engagement than established car brands like Audi, BMW, Cadillac, Porsche, or Toyota? How does Tesla manage to sell cars for over $100,000 with an apparent $0 marketing budget?
In a few words, Tesla turned away from the typical marketing used in the auto industry. They don’t push their product using expensive TV commercials, magazine photoshoots, or billboards.
Instead, Tesla takes full advantage of referrals and word-of-mouth advertising. Tesla encourages customers to indirectly advertise (and sell) for them.
There is a feel-good sensation when reading Tesla’s vision and mission description. They also have a cool CEO.
Most important though, Tesla makes you feel special about owning one of their cars. Customers may need to be patient and jump through some hoops, but it’s worth it.
People at Tesla take extra special care to provide both an amazing product and an outstanding customer experience. They make sure that purchasing and owning a Tesla car feels special.
Tesla has decided to do something out of the ordinary. Continue reading to learn more about the reasoning behind the Tesla marketing strategy.
This article also proffers an opinion about it and discusses why Tesla may have to reconsider it soon.
What Is a $0 Marketing Budget?
Marketing a product 10 years ago was often done via print media such as newspapers or magazines. It may also have involved broadcast media such as radio and television.
Both methods incur a large cost. However, high-speed technology has created new, cheaper ways of marketing products and services.
At little cost, it’s possible to market products and services via the Internet. Social media platforms like Facebook, Instagram, and Twitter are also great tools.
An online presence can prove to be as successful as the traditional methods and it does not cost a dollar.
Tesla Motors is one of the fastest-growing electric car producers in history. To date, nobody has ever seen a billboard, TV commercial, or even a website ad of Tesla.
Yet everyone knows Tesla and Elon Musk.
How did Tesla embed itself in people’s minds without using a conventional marketing strategy? The product and place elements of the marketing mix give the company a competitive advantage.
Tesla's brand represents those who are concerned about environmental issues and the negative impact of carbon footprints. Tesla doesn’t just sell electric vehicles or solar panels; it also sells that special feeling.
The company appeals to emotions. It makes customers feel environmentally responsible, special, and even better than the rest.
Marketing via Customer Experience
Outstanding customer experience is one of the main pillars of Tesla’s success.
At a regular car dealership, customers must deal with shady salesmen. These salesmen are on the lookout for ways to rip people off and increase their commission.
Taking a car for a test drive may be the nicest part of the experience. However, talking numbers, inspecting the fine print, wrangling over add-ons and the final price is time-consuming and far away from a pleasant experience.
Compare that with Tesla. There are no retail dealerships, no sleazy salespeople, and no lengthy in-person purchasing process.
The process of purchasing a new Tesla is simple and done online. The price shown on the website is the final price, with no fine print.
Customers purchase and configure the car and schedule the pick-up online. It’s a seamless experience.
Tesla’s overall customer satisfaction rating is 90%. The company further boasts the highest customer loyalty in the industry.
The initial test drive, the purchasing journey, and the follow-up maintenance are well-organized, time-efficient, and not pushy. It is a unique, amazing buying experience.
The salespeople So there is no conflict of interest between customers and Tesla employees they deal with.
There’s no commission charged when purchasing and customizing a Tesla car online either.
George Blankenship designed the Tesla sales centers. He also designed the Apple retail stores.
He intended to make them “clean, approachable, comfortable, and exciting.” This makes the purchasing process pleasant and improves customer experience by a mile.
Marketing via Referral Program
Word-of-mouth is one of the most effective marketing methods. This is because customers trust people they know.
They tend to accept their recommendations more than other types of advertisement.
Tesla knows how to use this fact to the fullest. Their referral program rewards customers for sharing their experiences with others.
Participating in Tesla’s referral campaign can really pay off. Exclusive benefits include a Model S for kids, sporty alloys, extended warranties, and solar panels.
The rewards match the luxury status of Tesla and its customers. For a while, they were secret rewards available only to those who provided a big number of referrals.
As Tesla is a luxury car brand, their customers are people of considerable means. The rewards are therefore suitable for their luxurious wants and needs.
Offering these rewards benefits Tesla, ensuring the company receives more customers.
Lesson for you:
Actively gain and encourage word-of-mouth recommendations.
The first step is to make sure that the product, sales process, and customer service are the very best they can be. Then, roll out a referral program and a newsletter strategy that encourages customers to share their experiences with family and friends.
Remember, though, that the second step is impossible if the first one is not taken care of.
The "Customer Is King" in the Tesla Marketing Strategy
Tesla earns its customers’ trust by giving them a direct approach to the company. There’s no car dealership hassle in the middle.
Clients can configure and customize the product according to their preferences. Tesla makes the process comfortable and easy.
Tesla genuinely invites feedback from customers and actually uses it to make improvements. This, in turn, increases customer satisfaction which is Tesla’s main focus.
Tesla sticks to its vision of a better, cleaner future. It also maintains its commitments to keeping the customers happy.
It’s almost impossible to find a Tesla car owner who isn’t euphoric about their purchasing and ownership experience.
Exclusiveness of Tesla Vehicles
Tesla products (just like Apple) mean status and are objects of desire and envy. This is due to the company’s clear strategy: manufacture relatively few units and create high demand with limited supply.
Tesla’s first car was the Roadster model, based on the Lotus Elise. Right away, it was in direct competition with the likes of Porsche Boxter S and Porsche 911.
The company ended up producing up to 500 cars per year. This put paid to the myth that it is not feasible to create a high-performance electric vehicle.
The price point of Tesla vehicles, and the fact that each one is made-to-order, make them exclusive cars to buy. Limited production purposefully created a supply and demand conflict.
It also boosts the unobtanium factor, further increasing Tesla’s exclusivity status.
Tesla takes full advantage of the fact that customers can’t actually see the car they’re purchasing, even when making a down payment. This is due to each car being made-to-order, so customers have to wait for a few months or longer.
This generates a lot of anticipation and excitement. Customers feel unique and special when they finally get their hands on their luxury cars.
So, announcements and new releases are highly anticipated by both the customers and the media. This further boosts Tesla’s status.
Superb Post-Purchase Customer Support
Customer experience goes beyond making the purchase. Their engagement with the product after purchase affects their view of the company.
Tesla thinks the way its customers think. It has anticipated and taken care of post-purchase issues that might arise.
Here is one example:
Tesla has created a huge network of supercharging stations across the USA and Europe. So customers do not have to worry about a flat battery when they’re on the go.
Lesson for you:
Businesses that take care of their customers’ post-purchase journey will win down the line.
Tesla also dealt with another potentially damaging issue. This is the trouble of leaving a car at the mechanic’s shop.
Usually, repair shops and car dealerships provide free car rentals or pay for a cab/Uber ride. Tesla, however, provided something even better.
The company created the Tesla Rangers. This is a mobile service team that will meet customers at any time and place.
This includes when they need a repair, if they’re stranded on a roadside, stuck at home, or stranded in a parking lot.
But that’s not all, Tesla took it a step further. Each Model S vehicle can manage and report its data.
Customers can contact a Tesla Technician who accesses their car’s information remotely. They then walk the customer through the repair process.
Elon Musk owns and runs Tesla as well as SpaceX. He creates and uses some unique cross-promotional opportunities.
For instance, in 2018, SpaceX launched a Tesla Roadster with a dummy driver called “Starman” into space. It is Elon Musk’s own Tesla Convertible and it played David Bowie’s “Space Odyssey” while in orbit.
This drew the media’s attention to both brands across the globe. The images of Starman in his Tesla in space kept circulating on TV and social media platforms for days.
Sir Richard Branson, another successful business owner, has also used stunts as a marketing strategy.
Even if criticized, stunts attract attention from customers and the media. This is especially the case if they include flying in space.
Whether Elon Musk and his businesses will pull off another stunt at such a high level is not certain. But for sure other cool stunts will come along soon since they benefit all brands involved.
Tesla promotes its brand on its social media platforms and the website. But they also do more than that.
The company has partnered with a number of colleges to offer its START program.
START is a 12-week long training course. It teaches students the skills they need to work on electric cars in the future.
Lesson for you:
Take full advantage of public relations opportunities. Use them to spread awareness of and promote your brand.
The Use of the CEO’s Social Media Influence
Elon Musk’s charisma is unquestionable. He uses it well and engages with his followers regularly.
He often converts his thoughts into tweets. This gives followers the feeling of having insight into the company in real-time.
Oftentimes, he shares his fresh ideas while driving home. He gets personal and talks about things he cares about and has an interest in.
Elon Musk is not bothered about upsetting people. He also doesn’t mind having his opinions and thoughts labeled as controversial.
Tesla's CEO is honest and open about what’s going on, including the failures.
The way Tesla and its CEO use social media is huge for the company’s success. It does not spend money on any other form of advertising to increase brand awareness.
For that reason, Musk is also present on YouTube.
The closeness he’s created with his followers brings huge marketing benefits. Every time there is a new tweet or live stream, Elon knows that his followers will further popularize it.
They can do this by retweets, social media shares, creating memes, blog posts, and more. That’s all free marketing right there.
All because Elon Musk built a powerful brand and strong bond with his followers. It’s a phenomenon that people are proud to be a part of.
Tesla’s CEO doesn’t only speak to its followers. He also listens to them.
Here’s an example:
A Tesla customer tweeted at Elon Musk requesting that the car move the seat back and raise the steering wheel once in parking mode. This would keep the driver from hitting the steering wheel each time he gets in and out of his vehicle.
Musk replied to the tweet within 30 minutes. Further, he added the requested feature to Tesla cars via a new software release.
Another smart move on Musk’s part is his use of retronyms. For years now, he has been calling regular cars, not “cars” but “gasoline cars.”
It makes the new sound like the standard and the current sound primitive and obsolete.
Lesson for you:
Make your brand look more human by providing a personal, inside view of it on social media. People want to know what’s behind the brand’s name and logo.
It’s not all about the product. It’s about the people who make it.
Like Elon Musk, share your casual thoughts and ideas, peculiarities and failures with your followers.
A Vision in a Millennial World
Tesla captures the imagination. Consumers buy into the company and its CEO’s vision of the future.
Clean energy electric cars, smart batteries, solar panels, private space trips, even talking about aliens. It is intriguing and people want to know more.
So they follow closely and make sure not to miss a word that comes out of Elon’s mouth.
Both the company and the CEO have a strong social media presence. So Tesla Motors gets linked to topics like electric cars or driverless vehicles more than any other car manufacturer.
This in spite of the fact that other car brands invest in the industry even more than Tesla.
Tesla has derived its success from creating something that people want to be part of. Then they make them feel like they are.
The company has created a vision that matters to (or at least somehow affects) everyone. The future of the planet and future generations.
The change is inevitable and Tesla is helping the world to transition to clean energy faster. Who wouldn’t want to be a part of it?
Do not underestimate the importance of honesty and transparency in your dealings with customers.
Don’t try to hide an issue that may disappoint customers especially if you are working on fixing it. Instead, be open about it.
Your customers will appreciate the honesty.
Consider this example:
Many customers had pre-ordered the Tesla Model 3. All were dissuaded from delaying their delivery dates due to a manufacturing problem.
Soon there were backlogs of Tesla Model 3s just sitting at manufacturing plants. Customers were likewise puzzled about why they were still waiting for their vehicles.
Tesla did not try to sweep the issue under the rug. Instead, the company was honest about the situation.
Many customers received personal replies to their tweets from Elon Musk.
Customers had to wait for their delivery either way. But they were more disposed to bear with the situation because they understood what was going on.
What’s more, they appreciated the company’s being candid.
Lesson for you:
Transparency should be an integral part of marketing and customer service strategies. The business will reap the benefits of being honest in the long run, that’s for sure.
Marketing Sustainability: Make Your Mission Your Marketing Strategy
Customers’ loyalty is not a result of the eccentric personality of the CEO. Brand loyalty relates to the company’s mission “to accelerate the world’s transition to sustainable energy.”
It’s not only empty words. Tesla focuses on achieving that in all ways possible.
Reversing or slowing down humanity’s negative impact on the environment is urgent. The goal of Tesla’s products is to build a sustainable energy ecosystem.
Products include solar panels, solar roof systems, zero-emission electric vehicles.
With an ecological doomsday on the horizon, Tesla’s mission and its commitment to it is like a breath of fresh air. The company wins brownie points from the anxious public.
Tesla’s well-defined vision helps to steer it in the right direction. It complements its marketing strategy in a significant way.
Tesla’s mission provides a basis for the development of technology by the company. It also lines up well with its target market.
The company targets people who care about the planet. These are people concerned about pollution, global warming, and climate change.
However, this is not done directly.
Tesla’s customers like that the company sells more than electric vehicles. It sells its vision to those who identify themselves with it.
No other company can come close to Tesla’s level of ambition. But it is possible to learn from its powerful use of its mission and vision statements.
Lesson for you:
Imitate Tesla’s way of using the mission statement to appeal to the audience. Build a loyal following who support you and your vision.
Believe in what the company sells and have a clear vision that customers can identify with. Use these factors when creating a marketing strategy.
The mission statement needs to be strong and confident. It’s vital to communicate it to the target audience on a frequent basis.
Welcome the Competition
Since June 2014, Elon Musk has been supporting the open-source movement. He had previously believed in patenting all innovations.
He came to realize, though, that patents only slow down progress meant for the greater good of society. Patenting new technology does not help to accomplish the company’s mission.
Therefore, all Tesla’s patents are open-source. Elon Musk has even been praising competitors for making progress in electric car manufacturing.
Sticking to its mission, Tesla welcomes competitors. It allows them to use Tesla concepts since doing so helps to make that desired change happen.
At Tesla Motors headquarters in Palo Alto, CA, the wall of patents has been removed.
Elon Musk views competition as a healthy way of accelerating innovation. He also sees it as a way to provide a wider choice for customers.
He recognizes other company’s accomplishments, backs positive initiatives, and works together with competitors to create the best practices in the industry. At the same time, he still sets his sights on being the best.
Lesson for you:
Instead of losing sleep over competitor’s achievements, home in on the mission. Become the best at what you do.
By doing this, people will choose your brand over others.
Lessons Retailers Can Learn from Tesla
It is inevitable that Tesla will come across some issues with production and sales in the future. Yet it is evident that the company has mastered the “$0 marketing strategy.”
What can retailers learn from Tesla's marketing strategy and its unquestionable success?
Create Something That People Care About
It may be difficult but it is also the very core of marketing. To be successful, create something valuable to a significant segment of the market.
Also, zero in on providing an unforgettable customer experience.
Tell a Story That Resonates with Your Audience
It’s not necessary to be a master storyteller like the legendary Steve Jobs.
In fact, Elon Musk tends to be awkward and stumbles over words. Nevertheless, he still emanates confidence and is known to be an expert in his field.
Sometimes it’s not about the way you tell the story. It’s about the story itself and putting your heart into it - something no-one can fake.
Take Advantage of Word of Mouth
Accelerate word-of-mouth marketing by creating irresistible referral programs. Do not think that paid advertising campaigns are the only way to go.
Use the social media status and influence of the company’s leadership to good advantage. Establish yourself as an authentic brand, but don’t forget a measure of humor.
Communicate Your Mission and Vision
Create and believe in your strong mission statement. Include it in digital marketing and promotional efforts.
Observe and learn from other brands and their winning marketing strategies. This will provide an elevated view and a broader perspective.
It will also help you to build your very own successful marketing strategy.
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