Tesla’s Powerful Marketing Strategy & Its Potential Downfall
Tesla is a major marketing success story. It’s a company whose mission extends past selling electric cars — Tesla exists “to accelerate the world’s transition to sustainable energy.” A lofty goal to say the least. It has a $0 paid media budget. (Note: this is a widely accepted number, but I could not find a definitive source. If indeed there is a Tesla marketing budget, it is tiny compared to businesses of the same size.) *see comments for an addendum to this! As Advertising Age noted, “Tesla Motors has no advertising, no ad agency, no CMO, no dealer network. And that’s no problem.”
All of Tesla’s marketing is through earned or owned media. Tesla fans and owners are content curators, having created online forums, blogs, sub-reddits (shout out to Daria) and websites dedicated to all things Tesla. In terms of driving sales, the company bypasses the traditional dealership model and sells cars directly on its website. A prospective buyer never has to speak to a person in order to purchase a Tesla, a huge departure from the long sales cycle usually associated with major purchasing decisions.
The man, the myth, Musk
Co-founder and CEO Elon Musk is a dynamic personality that is part of the Tesla brand. As noted in the Scott textbook, he is the company’s “salesperson-in-chief.” However, counter to the book’s advice of a great corporate bio page, tesla.com does not have a bio on him, simply mentioning ONE time on the “About” page. It’s not often you find a company’s owned media saying little to nothing about the CEO. Tesla’s high profile allows it to almost blithely assume that you already know about Musk through earned media.
However, not all of the earned media on Musk is positive. Most recently, Musk has received heavy criticism for being on the President’s business advisory forum. In addition to CEOs from traditional consumer goods companies such as PepsiCo, GM and Walmart, Musk joined this advisory council ostensibly to help advise the President on economic matters. It’s important to note that Musk has said is he is optimistic about Trump’s promise to invest in American manufacturing (Tesla cars are mostly made in the US and are projected to be the “most-American made car” later this year) and Tesla factories receive billions of dollars in tax subsidies.
In interviews and on Twitter Musk has repeatedly emphasized that his presence on the council doesn’t mean he endorses Trump’s policies and that it gives him a seat at the table as a politically moderate influence. This strategy did not work well for Uber’s CEO Travis Kalanick, who last week dropped out of Trump’s council due to negative earned media.
Earned media you’d rather not earn
The day after the Trump’s immigration executive order was announced, Kalanick made social media waves when he tweeted that surge pricing did not apply during the NYC taxi driver work stoppage at JFK airport (held to protest the executive order). Intended or not, this tweet was interpreted to be a non-participation in the work stoppage and an implicit approval of the travel ban. A viral boycott campaign ensued, making #DeleteUber a trending hashtag on Facebook and Twitter for days. Uber lost over 200,000 customers and competitor Lyft’s app was one of the most downloaded that week! Talk about unwanted earned media.
Musk’s ‘attendance doesn’t equal agreement’ in Trump’s advisory council argument hasn’t swayed everyone. His and Tesla’s earned media in the past week wasn’t stellar. The stories of people who had made reservations for the Tesla Model 3 cancelling their orders were widely circulated on social media and traditional media outlets. Though there is only a known handful of these cancellations, this and the Uber example give us an idea of how ‘earned’ media in the political arena can affect a business.
So far there’s been no official statement from Tesla or Musk on the Model 3 cancellations and it remains to be seen if the backlash will grow. Would some form of owned media (such as a statement) just fan the flames of ire or extinguish them? In a situation like this, a more traditional company might create a paid media campaign on social media to help the brand’s image. In Tesla’s case, however, “if it ain’t broke, don’t fix it” — the company has wildly succeeded without relying on paid media, so why venture there now?
