Why has Tesla’s brand proposition succeeded with $0 advertising spend?

Reinventing the experience

 

Approaching brand positioning in a non-traditional way can be a massive risk for businesses, but taking that risk and tactically establishing how to communicate your business in other ways can lead to incredible success. Take Tesla for example. Have you ever seen a TV advertisement, billboard or social media ad showing off Tesla’s latest model? No? Well you’re not the only one and that’s because Tesla’s advertising spend is £0

Similar to how Netflix and Uber have built their brands through reinventing traditional experiences and using the network effect to promote their businesses on the back of exceptional experiences, Tesla have reinvented the driving experience. Through the combination of this new experience and continued investment in product development Tesla has created enough ‘buzz’ via PR and Musk’s own profile to build a highly valuable brand.

Instead of traditional advertising, Elon Musk favours utilising his Twitter account consisting of 62 million followers and instead of funnelling cash into advertising, Musk believes leaders and entrepreneurs should put their money into continuous product improvement instead.

 

Musk is Tesla’s advertisment

 

Musk understands his audience inside-out. He’s not anti-advertising, he’s anti-traditional advertising in our non-traditional, 24/7, digital, app-laden world. Tesla does advertise, just not on TV or via print media. Elon Musk himself is a walking advertisement for Tesla. He’s extremely adept at using PR and social media to help form and gauge opinions and attitudes about the Tesla brand proposition.

The importance of establishing brand differentiation and communicating it in the right ways should not be dismissed. It creates powerful effects amongst a market and audience. Decades of data highlight that advertising and effective brand positioning has a significant role to play in brand building. Advertising improves top level brand awareness and inevitably increases the probability that the brand will be selected by consumers. However, advertising is not, in isolation, a cause of audience actions but rather a mediating factor in customer perception and influences.

Product development

 

Being ‘aware’ of a business is fine, but it doesn’t mean that you are going to buy their products or services. Advertising only works effectively with those people who already know or already use the brand. The difference with Tesla’s brand proposition is that they are fully focused on product development. They have channelled all their efforts and budgets into making a better product and consistently developing and improving it to improve the experience of the brand via the product itself. They are also disrupting the existing car sales market. They’ve shunned the franchise dealership experience and delivered next-generation technology, providing non-stop software updates and building an extensive Supercharge network. As a result of these disruptive actions, Tesla has been able to create an abundance of excitement around the brand.

Moreover, Tesla places a strong emphasis on values that are becoming universal within the automotive industry such as sustainability and renewable energy. Their mission is to accelerate the world to a sustainable future and unsurprisingly, they are getting the right attention because of this approach. Customer experience is also a key player in their brand proposition. As a company, Tesla has been given one of the highest consumer satisfaction ratings within the automotive industry due to them being able to create a customer experience unique to any other car manufacturer. From selling direct to consumers rather than via licensing to EV customisation options based on the specific needs of the buyer, the ‘Tesla experience’ allows customers to base their car purchasing habits and routine completely around their own preferences.

 

Rejection of tradition

 

Tesla’s recent deal with Hertz also highlights why Tesla doesn’t need to spend money on advertising. Hertz’s deal to buy 100,000 Tesla Model 3 saloons for its rental fleet ensures that the average person can experience Tesla for themselves, without the need for a formal showroom test drive. Another subsequent deal has seen Tesla provide 50,000 of those cars to Uber drivers, which in turn will show even more people what it is like to ride in a Tesla. This style of ‘try it yourself’ marketing is a tried and tested method within the automotive industry and its shown to be incredibly crucial for getting customers to switch from petrol and diesel cars to the newer, electric vehicles. Rejecting the stereotypical methods of advertising in favour of more organic, word-of-mouth and ‘word-of-tweet’ experience focussed marketing remains a very successful strategy for Tesla, highlighted by the fact that they are selling vehicles as quickly as they can produce them, with wait times on certain models up to a year.

Tesla only needs Twitter

 

How many other automotive company CEO’s do you know by name and follow on Twitter? Using Twitter as his main communication channel, Musk promotes Tesla on a daily basis in a variety of meaningful and insightful ways for EVERYONE to engage with. He is a natural at making sure that everyone can read or hear about Tesla regardless of media or device. Although it is incredible what Tesla has achieved through utilising social media platforms such as Twitter with no additional advertising cost, it may also simply be a case of being in the right place at the right time. One reason why the brand has thrived as well as it has, might be because the world has been in need of a company like Tesla for a long time.