Does Tesla understand marketing?

Compared with the endless noise of domestic brands, Tesla on the other side of the ocean is almost silent in its marketing - you rarely find any advertising by Tesla, but it still manages to get excellent exposure.

This brings up an interesting question in the marketing industry: Why can Tesla create such a huge amount of user attention without doing almost any advertising?

I know that some people would compare Tesla to Apple. Apple pioneered the entire smartphone industry, while Tesla has greatly promoted the development of the new energy vehicle category. The two do have similarities in their industrial status. Even Musk is often compared to the contemporary "Steve Jobs" - its extremely high social traffic means that it does not need to advertise.

This is obviously a misunderstanding.

In fact, Apple has always been a master of traditional advertising. Its product promotional video "1984" has become a classic in advertising history. Jobs also used a large number of celebrities such as Einstein, Hitchcock, Bob Dylan, Martin Luther King, etc. to produce a "Think Different" brand advertisement, which became a masterpiece of brand building.

Nowadays, Apple’s advertisements can be seen everywhere, and Apple’s investment in social media and marketing in China is obvious to all. Actions such as shooting Chinese New Year short films, opening public accounts/TikTok accounts, and placing advertisements on bus signs have long become standard actions in Apple’s brand marketing.

But these proactive actions are very rare in Tesla's marketing.

Therefore, we can say that the need for advertising may not have a direct correlation with the innovativeness of the brand/product. In fact, we can also see brands that "do not need advertising" in many traditional industries, such as Lao Gan Ma, fast fashion, Starbucks, etc.

Although this topic is not new, we might as well analyze what Tesla relies on for communication and why it has become a fresh breath among new energy vehicle brands?

01

We now believe that all marketing strategies are based on their own business logic. (This is the inspiration a senior gave me in the past two years, and it is also the way we believe can provide a more comprehensive understanding of marketing.) Therefore, the analysis of marketing actions cannot be one-sided, but should be approached from the perspective of the macro development of the entire company or even the industry. Marketing is only one part of business.

To analyze Tesla’s marketing, we must start by analyzing Tesla’s business model, which requires some digressions.

In fact, electric vehicles and traditional gasoline vehicles are two completely different fields, but they both ultimately take the form of vehicles. The reason for saying this is that there are huge differences in the industrial chain and value chain of the two. Oil car experts see electric cars as a new species.

There is a joke that making a car is an engine plus four wheels. The core component of a traditional gasoline car is the engine. The engine is a precision equipment. The scientific principles of manufacturing are not difficult, but the process precision required is extremely high, which is a bit similar to making chips. But in electric vehicles, the core components become the power supply system and the user's intelligent interaction system. If traditional gasoline vehicles are the form of Nokia, then electric vehicles are indeed like an Apple phone that combines software and hardware.

To extend this further, my country's previous policy formulation for joint venture car manufacturing was originally an attempt to quickly acquire advanced technologies from the European and American car manufacturing industries through capital openness and market capacity, and to promote the development of local car brands and industries. But after these decades, domestic automobile brands still have relatively weak brand power, and the domestic automobile industry cannot be said to have met the expectations when policies were formulated many years ago. We can compare South Korea's automobile industry with the domestic aviation industry and discover the embarrassment of the local automobile industry.

New energy vehicles are actually an opportunity for my country's automobile industry to overtake other industries, because new energy vehicles are a digital industry that combines software and hardware. China has extremely rich road condition data and a very developed battery supply chain, so it has more advantages. The development of the electric vehicle industry is also an energy revolution in the long run. It can promote the construction of power energy outlets such as charging piles. Therefore, it is of great significance even from a national strategic perspective. I think this is also one of the main reasons why Xiaomi finally decided to enter the electric vehicle market, just go with the flow.

02

Back to Tesla, the difference in product logic between gasoline vehicles and electric vehicles has given rise to completely different business models. The sale of gasoline vehicles is a one-time sale, so the key link is product delivery, and all brand marketing actions need to be ultimately oriented towards sales. Therefore, automobile manufacturers have gradually built a car sales model with 4S stores as the link. Users need to go to 4S stores for transactions, maintenance, etc. The configuration and management of automobile brand salesmen are also built because of the 4S store model.

But smart electric vehicles are very different. Similar to Apple mobile phones, although hardware sales are important, they are not the only way to make profits. There is still room for profit in the construction of interactive systems and subsequent services. For example, in addition to mobile phone sales, Apple's iCloud space, Apple Music membership, and App Store commissions can all support its commercial profits.

This also leads to a change in the brand's operating philosophy. What is important is not just the moment when the sale is completed. Users are no longer the ones who disappear after the transaction. It is more necessary to provide high-quality ecological services in the long term and to continuously interact and connect with users. In this way, the focus of the company's business has shifted away from the sales process to a certain extent. Against this background, the importance of the 4S store's sales system has been reduced.

Generally speaking, 4S stores are connected to or managed by the sales companies of automobile manufacturers, and many 4S store outlets are established through franchising. Obviously, traditional 4S stores have strong sales attributes and weak service attributes, and electric vehicle services involve the combination of software and hardware, making brand quality control difficult to manage. In addition, the overall electric vehicle market is not yet mature and Tesla has limited funds, so it finally adopted a direct-operated store model.

Even if this choice is a strategic decision, it is the optimal solution under realistic conditions and can be said to be inevitable.

03

The 4S store model needs to balance the interests of the OEM, dealers, and consumers. According to our understanding of automobile brand management, the dealer management section of the automobile OEM is extremely important, and marketing actions are more about empowering dealers, helping dealers to acquire customers more efficiently, and attracting traffic to 4S stores.

Tesla's direct sales model actually breaks down the traditional 4S stores into three parts: the first is the direct sales experience store, which is responsible for pre-sales consultation and test drives; the second is the service center, which is responsible for delivery and after-sales; the third is the official website, which is responsible for sales and order placement. It can be seen that this completely breaks through the traditional marketing model.

In addition, since Tesla combines software and hardware, theoretically the price of the host hardware can continue to drop, so that through future software charges, the direct sales system can be free from the restrictions of the traditional dealer system when reducing prices. But it seems that users are somewhat dissatisfied with the frequent price cuts of products.

It is also worth mentioning that due to its pre-sales consultation nature, Tesla experience stores are mostly opened in shopping malls with high traffic volume, which in itself brings Tesla huge offline traffic exposure. Don't get the cause and effect wrong here. It's not because it's located in a shopping mall that it gets a lot of exposure, but because it needs a lot of exposure that's why it's located in a shopping mall. The two are fundamentally different in strategy. Of course, another point is that shopping malls can enhance the brand's sense of high-endness, which is also a way of shaping the brand image.

Simply put, Tesla's store strategy and operating strategy are integrated with its marketing strategy.

In fact, we can also see many similar phenomena. For example, the same is true for fast fashion brands such as ZARA. With dense offline store layout, each store sign can be regarded as advertising exposure, which boosts the brand's popularity. The same is true for Lao Gan Ma's occupation of display positions on supermarket shelves, but in recent years, Lao Gan Ma has also been focusing on social media promotion.

Moreover, unlike online social media advertising, this type of offline store advertising is more compulsive and is located at a traffic entrance that people cannot avoid. Online advertising users can easily choose to block or jump out, so its efficiency may be lower than that of offline stores.

04

So the question is, it seems simple, why do other brands rarely do it?

In fact, in our somewhat fatalistic view, this has to do with the brand's genes and has a lot to do with organizational management.

In traditional brands, channel expansion is more about selling products, so the channels are often the responsibility of the sales department. However, the sales department’s assessment and management indicators do not take into account dissemination and exposure, which creates a split. Therefore, it would be a very idealistic idea if we think that channel expansion can satisfy both sales and brand needs.

Brands need exposure and dissemination, and sales require efficiency and precision. The two are often difficult to combine in the traditional organizational structure. The key is to see which department takes the lead, whether it is the marketing department or the sales department. The consequences are very different.

The marketing of high-value products such as automobiles and real estate is a relatively closed and independent marketing sector, but from Tesla's practice, we can also see that this traditional marketing model is gradually being broken by digitalization and the Internet.

We are all talking about "brand and effect integration". In fact, the source of solving this problem may lie in the need to integrate brand thinking and sales thinking in the internal organization of the enterprise. This is a digital upgrade in the management system. In fact, Apple has already provided a relatively good example. It is said that employees in Apple stores do not receive sales commissions, but every time Apple releases a new product, offline stores will still line up to buy it.

Of course, we don’t know much about the corporate organization and management level, and we also believe that different organizations require different management models that best suit them, and we cannot generalize. This also requires each brand to do more exploration and experimentation on its own, and not to be afraid of change. A company as large as Alibaba adjusts its organizational structure almost every year, but all Internet observers we have met agree that Alibaba's organizational management capabilities are extremely strong.

In summary, we believe that the adaptation of organizational form will determine the overall marketing efficiency of the enterprise, and this is a lesson that many traditional enterprises need to learn.

05

With the disappearance of the mobile Internet demographic dividend, the efficiency of online delivery in the social media era is actually slowly declining overall. In social media, users’ autonomy has been amplified unprecedentedly, and users have even become the voice and fermentation nodes of marketing.

Therefore, from the perspective of communication, the most effective marketing method is not to spend a large budget on hard advertising, but to get users to forward and discuss. This has also spawned a set of digital marketing strategies that are different from the past.

I wonder if you have noticed this interesting phenomenon: in the past, the heads of marketing departments of traditional brands often came from branding and marketing campaigns, and were very good at user research and brand positioning; but now, a large number of brand marketing heads come from public relations backgrounds. This phenomenon is especially common in Internet companies, because Internet products do not have a high demand for brands, as the product is the brand, and public relations people are often better at topics, public opinion, events, and media relations.

This interesting difference also reflects the change in the current brand communication focus.

For example, women's topics and feminist content have always been controversial, but brands that touch on such topics have the opportunity to gain significant exposure and discussion. We even suspect that many brands gain social popularity by maliciously touching on such controversial topics. Of course, this approach will cause great damage to brand favorability and brand building, but it can indeed quickly spark discussions across the entire network. In an age of information overload, it is quite common for many brands to have the idea that “they are not afraid of being infamous, but are afraid of not being famous”. This is actually a typical public relations thinking (but it may not be worth learning).

It can be seen that the purpose of advertising marketing has changed from outputting brand positioning, expressing brand stories, and occupying the minds of users to a form of event marketing and topic discussion. This is the biggest difference between current marketing and traditional marketing - all marketing methods are event marketing.

06

Now let’s look back at Tesla. The popularity of Tesla is supported by two aspects. The first is product communication marked by product launch conferences, and the second is the IP communication of entrepreneurs represented by Musk. This also constitutes the main voice point in his social network. If we look at the communication layout, the product launch conference is a concentrated detonation, while Musk's Twitter speeches fill the gaps in daily communication.

Tesla's products are indeed quite revolutionary and have become a benchmark in the electric vehicle industry. Therefore, Tesla's every move is widely watched by the industry, which also brings Tesla a lot of natural media exposure. Whenever Tesla holds a press conference, technology media, automotive media, and financial media all pay attention and comment and analyze it.

Elon Musk’s character IP has been successfully shaped, and his growth experience is also legendary. Behaviors such as being under the PayPal mafia, live-streaming marijuana smoking, the Mars immigration plan, and advocating Bitcoin have all sparked public discussion. It is precisely because of this unique personal charm that Tesla has attracted a lot of attention. Of course, Musk himself has many labels, and there are many rumors about him. He even made clubhouse and Dogecoin popular by himself...

In fact, we have reason to believe that the reason why Musk frequently speaks out on Twitter is because of the lack of marketing expenses (just as Luo Yonghao later admitted, the reason why he made trouble on Weibo was because of the lack of marketing budget for the Hammer phone). But don't get me wrong, what I think is that Musk probably thinks that the marketing expenses themselves are not cost-effective, not "smart money", and cannot get more returns, so they may always lack this money when they are CEO... This is a difference in thinking.

It can be said that Tesla and Musk are typical examples of anti-traditional marketing. Based on the digital communication environment, they have found a marketing method that is more likely to stimulate topics, and this marketing method is naturally combined with the entrepreneurial personality.

07

The former chairman of Coca-Cola once said, "If my factory is destroyed by fire, if I encounter a global financial crisis, as long as I have the Coca-Cola brand, I will stand up again the next day." Later, many people regarded this sentence as the best interpretation of brand value, but it was a pity that they did not go deeper.

This sentence actually points out an insight - fans are the brand's biggest moat. So what excellent brands need to do is to turn users into fans.

In the previous business model, the only contact point between the brand and users, apart from pre-sales promotion, was the product. However, the product is stable and homogeneous. After long-term use, it is difficult to surprise users or highlight the advantages by comparison. Therefore, users will become fans of the brand only after long-term repeated purchases.

However, in today's digital age, products will continue to be renewed with the iteration of software and services, so they have the ability to constantly surprise users, making it easier for users to become fans. Of course, this is also due to changes in user consumption preferences. For example, the increase in user personalization and circle demands also prompted the formation of users into fans.

Compared with the sophisticated fan operations of domestic new energy vehicle brands such as NIO, Tesla's success seems to be more of an accident. However, since electric vehicles themselves are smart devices that can serve users for a long time, they also have the inherent advantage of fan-based operations.

According to media reports, Tesla did not have many marketing methods in the early days, and relevant new car information was limited to a limited range, so Tesla's product users had nowhere to participate in discussions. A senior user founded the "Tesla Drivers and Friends" (Tesla Fahrer und Freunde, abbreviated as TFF) forum, allowing all Tesla owners and followers to get to know and communicate with each other in the forum, which later became a major platform for Tesla's communication.

As long as you pay a little attention to social networks, you can find that there are also a large number of Tesla owner clubs/communities spontaneously formed by the public in China. The members are all fans of the Tesla brand. Through the links of the community, the users' communication energy is collectively amplified.

It is worth noting that Tesla’s fan community was not officially established by Tesla, but by its enthusiasts. Of course, behind this is the foundation of Tesla's product strength and brand appeal. If you are a brand owner, you might as well ask yourself, can you let users spontaneously build a fan community for your brand? What efforts do you need to make?

In fact, NIO’s example deserves our attention, even though we only know the basics. It is said that when the stock price plummeted in the past two years, many NIO owners spontaneously attracted customers and promoted NIO. This can no longer be defined simply as users, they have become super fans of the brand.

Let me say a little more here. Communities (especially high-end communities) need to pay great attention to service during operation. They cannot be operated with the mentality of attracting traffic or building a fish pond. Otherwise, members of the brand community can only be called community users, and not brand fans.

Several friends have asked me the same question: “How to operate a brand community well?” I have only one answer: “Treat community members as friends first.” Of course, this answer may only be suitable for core communities, but the idea is the same in other situations: treat community members as people and users, not just traffic.

08

It can be seen that if we look at it from a traditional marketing perspective, Tesla’s brand communication is almost unqualified, but if we look at it from a new digital perspective, Tesla is one of the best brands that "understands marketing."

It is still necessary to emphasize here that we believe that Tesla is first and foremost an innovation in the automotive business model, which in turn brings about innovation in organizational management, and then in marketing models. The root of innovation in business models actually lies in the innovation of product form and product logic.

Therefore, the product is the root. No matter how much we emphasize the product, it is not excessive. Other external manifestations are by-products.

We have actually observed many marketing cases, but every time we trace back and ask why, we can find some answers in the products. The reason for making such a product is that various organizational, industrial and marketing supporting actions have been derived. Of course, the origin of the product can be traced back to user demand, which we don’t need to say more.

Finally, let me share some inspirational words. Since we are engaged in marketing self-media, we have also met many “smart people”. When talking about Tesla, they all think that success cannot be replicated. Tesla was born out of the right time, right place and right people. Even its marketing communication relies on the Twitter updates of the universe big V Musk. Ordinary companies are far behind and have no reference value.

We naturally don’t think so. The so-called marketing methodology has never been successful by mechanical imitation. All successful marketing cases are the result of the combined effect of time, place and people. But it does not mean that they are meaningless to other brands. Many of the ideas and strategies are worthy of reference for brands.

So, stop saying “You can’t learn Tesla” and think about whether you have tried hard to learn it. Being too arrogant is not conducive to your growth. Of course, we have never worked in the automotive industry, but have only been exposed to some car brand marketing, so our understanding of Tesla and the automotive industry is relatively superficial. The above are just some of our own observations and thoughts.

Author: Spread Gymnastics

Source: Spread Gymnastics