Tesla’s Marketing Strategy, What You Need to Know
If you were one of the lucky ones and invested $1,000 in Tesla in March of 2011 a year after its IPO that initial investment would be worth close to $120,000 by March of 2021. Not a bad return for the cost of a new iPhone. So how did Tesla do it? You aren’t going to be flooded by social media ads from Tesla because unlike other car manufacturers or companies in general Tesla spends virtually nothing on marketing.
How is it possible that a company worth close to a trillion dollars spends nothing on marketing? If you are Tesla you create a product so good it markets itself. There is something to be said about true innovation and exceeding customer wants and needs they never knew they had. And Tesla has done that better than almost any other company. If you want to learn more about how Tesla thinks about marketing in ways others don’t then consider these four elements of its strategy.
1. Create a product that transcends the industry
What’s the best way for a product or service to take off? Create an average product but have amazing marketing or create a product so great you don’t have to worry about marketing? Many people go down the first route. They create a product and even if they know it’s not great they hope they can make up for that by spending millions of dollars in advertising often on platforms like Facebook or Instagram. But Tesla took the second, arguably harder route. It created a really great product. Some argue that Tesla CEO Elon Musk should spend less time tweeting about Bitcoin but the truth is Tesla makes great cars.
As the Washington Post writes: “from the time they hit the mass market nearly a decade ago, Tesla’s vehicles have garnered reputations as ‘iPhones on wheels,’ a revolutionary technological leap that did for cars what Apple’s smartphone did for consumer tech. They offered large touch screens, a vast charging network and ground- breaking performance that delivered on the dream of electrification seemingly without compromise, where competing products failed to stitch all aspects of that formula into one.”
Let’s not forget that Teslas are among the fastest cars in the world. That means that even if you aren’t concerned with protecting the environment Tesla could get you with its ability reach 60 mph in 2.4 seconds. The ability for Teslas to “self-drive” is another feature that has only added to Tesla’s cult following. On top of all of that, Teslas rank among the safest cars in the world.
When you have a great product its easier for it to sell itself. Think about how you first heard of Tesla. Either you saw the sleek car on the road and it caught your attention or you heard about it from a friend who was raving about it. Clearly when Tesla was designing its first vehicle the Roadster which came out in February of 2008 it wasn’t just thinking about function but form as well.
Tesla had the foresight to think about how it would capture the attention of consumers even before its first car came on the market. That’s marketing in its best form. You are thinking about every feature, every detail of your product and how each one might shock and awe consumers before your product even hits the production floor. When you operate in this manner with the end in mind at the beginning you don’t run into some of the problems companies have after their product is launched. How many times has a marketer stayed up late at night trying to think of a way to make a YouTube ad go viral only to realize they don’t have nearly as much to work with as they thought.
Another company that gets that true marketing begins long before the product hits the production floor is Apple. Apple obsesses over every design feature and every detail including creating beautiful packaging. Then when a customer receives a new iPad or Apple Watch they do the marketing for Apple themselves by posting on social media.
Similar to Apple Tesla receives a lot of earned media (also known as free media) from regular consumers who post on social media about every move the company makes. Getting a new Tesla or even just taking a spin in one is a big deal in the life of a social media influencer. A video about the Tesla Model S PLAID by tech YouTuber Marques Brownlee that dropped last month has over 8 million views and that’s just one video where someone else did the work for Tesla.
Word of mouth is one of the most effective forms of marketing because it is directly targeted to the person receiving it. You are not going to bug your best friend to read a book she’s not going to like. But the kind of word of mouth that builds businesses and helps them to succeed over time is almost always built on a great product or service. If it’s not great then why talk about it?
2. Use marketing stunts to grab and hold attention
Think about the last Ford or GM launch party. Still thinking? You can’t remember one can you? But I bet you can remember Tesla’s unveiling party for its Cybertruck in 2019. First there’s the design, its unlike anything you have seen before, the truck looks like it’s from the future. While the design was more than enough to get people talking something else happened at the event to make it go viral. Musk staged a stunt to demonstrate the strength of the truck’s windows which are supposed to be bulletproof. He took a metal ball and threw it at the one of the truck’s windows. The ball shattered the truck’s window. Musk, completely caught by surprise, said “oh my f---ing God.” He even tried throwing the metal ball at a different window but that shattered too.
Instead of the mishap diminishing Tesla’s reputation it inflated it. Even more consumers became aware of the brand. After the event Tesla released footage of tests before the launch where the windows did not shatter. Musk wasn’t trying to create a moment that would garner that kind of attention. But the fact that he tried to do something out of the ordinary by staging a stunt in the first place is what provided the opportunity for the moment to happen. It’s hard to imagine another top CEO in the auto industry even trying something similar. After the spectacle Tesla started selling “Cybertruck bulletproof tees” with a picture of shattered glass on the front of them. It’s like the old saying goes…”all publicity is good publicity.”
Another stunt staged by Tesla happened in 2018. Musk, who founded SpaceX, used his original red Tesla Roadster as the payload for SpaceX’s Falcon Heavy rocket. Now that’s a feat not many could pull off. The rocket launched the car into space to the delight of millions of Tesla fans. We are all inundated with digital ads, so much so that we often don’t even notice them anymore. It’s much harder than it used to be to capture someone’s attention and hold it. Tesla understands this and shies away from the tried and true marketing approaches since if everyone else is doing them then why pay attention?
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3. Have a charismatic spokesperson who’s not afraid to say anything
Musk recently changed his title at Tesla to TechnoKing but he might as well also call himself Marketer in Chief. He doesn’t sit on the sidelines and hope his marketing department gets the world out. Instead Musk takes to Twitter to promote Tesla himself, directly to his nearly 60 million followers. He’s confident and widely passionate about his work. Musk’s charisma is similar to that of Steve Jobs who was the face of Apple. Many pundits talk about the risk of a CEO like Musk who tweets about bitcoin or gets SEC fines for tweeting about taking Tesla private when in fact he has not secured funding. But at the end of the day Musk’s approach and style is working. There was a time that perhaps only ardent fans remember when Tesla was the underdog. Tesla was the newcomer on the block trying to make a dent in the auto industry. It didn’t want to have the best product that no one has ever heard of.
Tesla had to be splashy to become a household name. That’s what you do when your competitors are spending billions of dollars in marketing and you don’t have the budget and even if you did you would prefer to use those funds elsewhere. If Tesla tried the same marketing approach used by Ford or GM it could have taken decades to reach the level it’s at today, remember Tesla has only been around since 2003. Ford has existed for over a century. If you are going to do something that very few have done before, like standout in the auto industry, then you are going have to do something others have not done before.
Tesla also shuns traditional media outlets which many also see as a risk but instead what it really does is it allows Tesla to have more control over how people perceive its brand. In a world where perception is often reality Tesla can avoid the negative news stories the media likes to focus on. This was the case when Tesla released its beta version of its “full self-driving” car software last year. Tesla but did not invite the media to review it. Instead among those chosen to test it where Tesla owners, including ones that had posted positive reviews of the company in the past says CNN.
In between controversial tweets Musk also responds directly to tweets from customers. He doesn’t simply forward the tweet to a social media team instead he responds directly himself. That’s a great way of showing existing and potential customers how personally invested he is in the brand.
No one has close to 60 million followers on Twitter for no reason. You can build the best car in the world but if you have nothing to say or are boring no one is going to follow you online. Musk could also call himself Twitterking. He’s witty, engaging and speaks to you like he’s a friend instead of sounding like he works in the PR department. For some senior executives it’s difficult to speak like this because it requires vulnerability and not caring if you make a gaffe. In Musk’s world, gaffes are often a good thing.
4. Don’t be typical
Often when someone is either creating or launching a new product their gut reaction is to take a look at what is already on the market and do something similar. The thought is that is if it’s working for Amazon then it can work for me. But the truth is that you are not Amazon and it’s impossible to beat Amazon at its own game. It would have been easy to create a Prius 2.0 but Musk had a vision of what an electric car could be. It’s rather obvious now that creating an electric car that is fast and looks like a sexy sports car would be a way to convert buyers but that was not the standard at the time.
It takes courage to do something different but it often pays dividends. In Amazon’s 2020 shareholder letter former Amazon CEO Jeff Bezos wrote: “we all know that distinctiveness – originality – is valuable. We are all taught to ‘be yourself.’ What I’m really asking you to do is to embrace and be realistic about how much energy it takes to maintain that distinctiveness. The world wants you to be typical – in a thousand ways, it pulls at you. Don’t let it happen.” “You have to pay a price for your distinctiveness, and it’s worth it. The fairy tale version of “be yourself ” is that all the pain stops as soon as you allow your distinctiveness to shine. That version is misleading. Being yourself is worth it, but don’t expect it to be easy or free. You’ll have to put energy into it continuously.” Those words embody what Musk has done. He took the road less travelled, it was difficult but it paid off.
Tesla’s ability to think differently can also be seen in how Tesla approached its initial product launch. Instead of attempting to create a more affordable car in the beginning and sell it to the masses Musk realized that strategy would not work.“If we could have [mass marketed] our first product, we would have, but that was simply impossible to achieve for a startup company that had never built a car and that had one technology iteration and no economies of scale. Our first product was going to be expensive no matter what it looked like, so we decided to build a sports car, as that seemed like it had the best chance of being competitive with its gasoline alternatives,” says Musk. Once again straying away from what may have seemed like conventional wisdom worked in Tesla’s favour.
Then there’s Tesla’s approach to selling cars. You may remember the first time you went to a mall and saw a Tesla store. It’s a step away from the way cars were traditionally sold and only added to the mystique of the brand. The benefit of selling cars directly to consumers this way is that Tesla does not have to compete with any other car manufacturers the way it would have to if it was selling its vehicles at a local car dealership. This method allows Tesla to own the customer experience.
That’s just a short list of the many ways in which Tesla has strayed off the beaten past straight to success.