Until recently, several underlying factors have held back large-scale market adoption of the electric car; consumer unfamiliarity, a high price tag and limited choice, are often the reasons cited.
Then came along the Model 3. On March 31st, Tesla Motors unveiled its first electric vehicle for the mass market. In less than a day, and even before the car was publicly shown, there were over 115,000 reservations placed worldwide, each paired with a notable one thousand dollar deposit. Within three days, reservations soared to over 276,000; representing $10 billion in potential sales. Not too shabby for a 2003 underdog startup.
““Not too shabby for a 2003 underdog startup.””
That said, let's take a moment to put these numbers into perspective. In 2015, there were approximately 565,000 electric (plug-in) cars sold worldwide (majority in China and Europe). Comparing this to Tesla, even if only a fraction of those reservations translate into sales (as the company's success has created some challenges to overcome), the 'Silicon Valley Wonder' has clearly taught us a thing or two about 'winning the customer.'
Give the customer what they want.
Before emergence of the Model 3, many would say that the reputation of an affordable electric car was defined in terms of utility rather than an expression of speed, performance and design. As a result, several consumers found themselves still not ready to give up their spot at the pump just yet; leaving quite the opportunity within this emerging category. Granted hindsight is 20/20, but it seems as though this was an open call for any automaker to take advantage.
Tesla was the first out of the gate to listen and give the masses exactly what they were hoping - a reasonably priced, sporty, compact sedan that can move. Or in the words of Audi executive, Stefan Niemand, "Tesla did everything right."
Challenge The Status Quo when it comes to the customer experience.
Without thinking too hard, I bet you can list several friends, family members or colleagues that have purchased a vehicle from the dealership only to later question whether they negotiated the best price.
Tesla challenged the status quo by replacing the traditional purchasing experience with a direct-to-consumer sales model (also known as vertically integrating). Rather than using third-party dealerships, the company funnels buyers through its online sales channel and self-owned / commission free retail network. This means that customers pay the manufacturer’s list price with no additional mark-up and thus, no negotiation required.
What's the lesson? When you design the purchasing experience with consumers in mind, they’ll likely return the favour (i.e. buy your product and refer others).
Anchor your reputation on transparency, truthfulness and customer commitment.
Elon Musk, co-founder and CEO of Tesla Motors, appears to be quite transparent when it comes to making customer commitments. Take the Model 3 unveil event for example. Immediately following the CEO's remark related to making on-time deliveries, Musk didn't skip a beat to poke fun at previous missteps on the topic. At first glance, it might seem counterintuitive to the practice of under promising to later over deliver. But when taking a closer look, it very well may suggest transparency and the ability to learn from previous experience.
This was also implied when the CEO publicly tweeted having to ‘rethink production planning' given the unanticipated market response.
If the core of your brand is transparent, truthful and committed to the customer, everything else falls in line.
The best endorsements come from the customer.
It’s no secret that Tesla relies significantly less on traditional advertising than other automakers. But with that said, the company seems to have quite the grassroots following. Customers are often delighted to go online and share in the excitement. Whether chat forums, blogs, tweets, or videos, there’s plenty of content out there just waiting to be discovered (behind the scenes coverage of the Model 3 test drive being no exception).
Indeed, traditional advertising has its place. However, clicking online and watching customers react to Insane / Ludicrous mode for the first time, brings a certain authenticity even the best advertising just can't replicate.
