The psychology of Alien (Elon) musk behind Tesla's marketing strategy

Today, everyone is aware of the brand Tesla Motors and Elon Musk. Tesla was launched in the year 2003 but started making a profit in 2013. In just a few years, Tesla has made a mark in the automobile sector, and it is considered one of the luxurious car brands. Based in Palo Alto, California, the electric car brand Tesla has made a remarkable presence in the international market with its unique marketing strategy.

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by Shubha

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Marketing lessons to learn from Tesla

Big brands spend up to 6 to 12% of that revenue on marketing, but Tesla follows a $0 marketing strategy. Shocking, isn't it? Tesla motors experienced a growth rate of 157% in the year 2021. Is it possible for a brand to grow without spending a single penny? Well, Tesla did spend money on marketing, but it was comparatively much less than the money spent by its competitors like BMW, Mercedes, and Audi. In 2015, Tesla spent $58.3 million, whereas Audi spent 195 million and BMW 196 million. Elon Musk, CEO of Tesla Motors, visualizes the company as an independent automobile company that aims at providing affordable electric vehicles to its average customers.

A little bit of history

Before learning about the marketing strategy of Tesla Motors, let's know a little about the brand. In 2003, 2 silicon valley engineers, Martin Abohar and Mark Tarpon, sold their ebook business for 187 million and started Tesla to build a green car. Elon Musk joined the company as an early investor taking on financial and investing roles as the chairman of its Board Of Directors.

In 2008, when the company was on the verge of bankruptcy, Elon Musk took the responsibility as the CEO in October and made drastic changes in the company to save it. He fired 25% of the company's staff and formed a strategic partnership with Daimler. He also borrowed $465 million from the US government. In 2010, Tesla launched an IPO, and it was the second American automobile brand after Ford launched its IPO. The company raised 226.1 million with 13.3 million shares priced at $17 per share. In October 2011, Tesla launched its first electric car, Model S Beta, and in 2012, Model X was revealed.

Marketing Strategy

No one outside Tesla knows about the marketing strategy that it follows. If they do not spend a single dollar on their marketing or if they have a limited budget for it. But one thing is sure we can learn a lot from the marketing strategy followed by Tesla, which makes it a luxurious car brand. The company follows organic marketing strategies to market its products. Apart from paid marketing tools, there are many organic ways to sell your products. The company facilitates word-of-mouth marketing by creating referral programs; they have a solid social media influence where they directly engage with their customers. Below are some points that prove how well Tesla has made its marketing strategy strongly impact the customer base.

1) Referral programs:

Tesla offers a referral program to encourage its customers to get the word about their cars, and in exchange, the company provides them with something that the customers want and need. Like in 2015, Tesla offered a $1000 credit, and its reference program when a customer refers to another can be used for a new Tesla service or accessories. People trust the recommendations of their family and friends and always seek suggestions when investing in a car or a property. Tesla took advantage of this to promote the brand via word of mouth, thus saving them money that must be spent on marketing.

2) Customer Experience:

Tesla does not have a dealership with other car dealers. You do not have to deal with salespeople or give extra money for their commission. You can visit the website and order your car online. Tesla has the highest customer loyalty among its competitors, with a satisfaction rating of 90%. Though the company has its service center for the vehicles, its goal is to make the sales utterly digital, so there would be no interaction with salespeople. There is no one pushing you to buy stuff. Tesla understands its customers and does not annoy them with traditional sales practices. The company has simplified the buying process making it seamless and time-efficient.

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3) Marketing through social media:

Tesla is most active on Instagram out of all the other social media platforms, followed by Twitter. The CEO, Elon Musk, is an active user of both platforms. The charisma and audacity of the CEO have made Tesla what it is today. Elon Musk is not hesitant when it comes to social media. He straightforwardly posts about his success and failures and engages with his audience very well. He also considers tweets from Tesla customers and replies to them.

For example, recently, Sheryl Crow, an American Musician, Faced some issues with Tesla. She brought it on Twitter, to which Elon Musk responded to her personally, stating that her feedback has helped the company improve its car. He does not only react to the problems faced by celebrities but also to ordinary people. He takes every complaint and rant into consideration and responds to them personally so that people feel heard, and this helps him market his brand. She also takes suggestions from his customers, making him a CEO that wants to hear from them.

4) Set your mission and vision that aligns with marketing:

Every company has a strong vision statement that helps them move forward and takes strategic decisions to achieve those goals. Tesla also has a vision that is the strongest of all. The idea that makes them so determined is "to create the most compelling car company of the 21st century by driving the world's transition of electric vehicles". And the mission is to make affordable green cards for every average user. Tesla does not only sell cars; they dream big, which gets reflected in the form of a loyal customer base.

5) Transparency:

Customers are the asset of any business, and trust is its essence. When you maintain transparency between your brand and the customers, you win their trust. Tesla does the same. When Tesla Model 3 was launched, many customers were discouraged because of delivery delays due to manufacturing problems. Tesla, instead of hiding the situation from their customers, accepted it. Elon Musk himself responded to the people who posted about the issue on Twitter, giving out honest updates about the situation.

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6) It's okay to be controversial:

You can directly connect with your customers and people who know you on social media, but what about the people who do not know you? Elon Musk creates controversies along with Tesla to expand its audience. Ranting about Twitter on Twitter itself, mocking others along with himself and his brand, and selling flamethrowers for fun smoking marijuana with Joe Rogan are controversies Elon Musk has entertained to grab people's attention.

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Things to learn from Tesla Motors Brand Marketing Strategy

Tesla Motors has proved that you do not need big budgets to market your brand. You can also do it on a limited one by rendering an outstanding customer experience. You can use social media marketing to spread brand awareness, just like Elon Musk did. Make a strategy that focuses on digital marketing along with achieving your mission.

When you make a sale or render a service, your work is done there. You must provide customers with after-sale service if they find some issue with the product. You can be transparent with your customers about your problem. You can try paid marketing but do not entirely rely on it. Remember that paid advertising can yield excellent results for a limited period, whereas organic marketing or SEO takes time but helps you in the long run. If you have both online and offline presence, you need to focus on both. Your local customers can only reach offline stores, but you can sell your products globally with your online presence. Embrace your competitors and their techniques.

This is Tesla Motors' story that made them the fastest-growing brand. You can achieve anything if you are determined and follow the right track.

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