What comes to your mind when I mention Elon Musk? Probably Tesla or SpaceX or PayPal or some other seemingly crazy idea which he has proposed. What’s interesting is that these ideas seem crazy only till the time he hasn’t proposed them. Why is it that once he is ready to put his weight behind these ideas, the whole world, including the investors, seem to easily follow suit? While there has been more than enough discussions on Elon’s genius, his intense focus and commitment to his work and a madman like a relentless pursuit to his goals where he is ready to bet everything he has, what gets usually left out is his marketing genius.
Elon is a genius at picking up your typical B-school marketing frameworks and utilizing them in his own style. Each of his companies has attempted to take on a ground-breaking & untested approach. With such revolutionary ideas, it becomes crucial to understand what the customer wants, what your product is and how can you connect the two?
Segmentation, Targeting & Positioning:
Tesla wasn’t the first to introduce electric cars. They have been in the market for quite some time. But before Tesla, the image we had of fully electric cars was a box-shaped, low power, limited usability vehicle with an overall unimpressive design. And then there were the hybrids which relied more on their normal functionality to woo the customers offering the “green option” as an add on. All this changed with Tesla.
Tesla’s cars represent the highest quality in design, performance and comfort. Leveraging technology, Tesla produced cars which could not only compete with but outperform the best performers in the market. The positioning was not to own an environment-friendly vehicle but to participate in the next generation of quality & performance standards which technology can produce while minimising your carbon footprint at the same time. This changed the electric mobility industry on its head and positioned Tesla as at par with the top car manufacturers like Volkswagen, Toyota, Mercedes etc.
This was crucial to achieving another end as well. Being a new company with limited capital and production capacity, Tesla segmented the market and focused on producing high-end models first targeted at the high paying customers. This not only helped it in raising capital and building its reputation but also enabled it to use its capacity limitations to its advantage. This was followed by launching multiple “people’s car” models to enter into the wide-based mid-range segment building on the brand image and the capital raises through their original positioning.
Thus, understanding what the customers will buy, their needs, their wants is crucial to identifying the right product and the right marketing strategy for it. Equally important is to communicate your value proposition to not only initiate but also support the customers in the buying process. An effective branding campaign can also help you educate the customers’ wants to support the development of a continuous product pipeline. Elon has mastered this, again in his own unique style.
Elon Musk: The Celebrity CEO
When Steve Jobs came out in front of a crowd of cheering fans on January 9, 2007, he changed history. Not only was it the introduction of the very first iPhone, but it also launched the world into a new era of marketing. Firms have typically relied on expensive ads placed at the most eye-catching slots to launch and promote their products. Jobs changed that. You take an eccentric & passionate CEO, a best-in-class product and build a ravishing fan base and you got the recipe for success. Over time, marketers all over have tried to adopt this but ironically the one most successful is in an industry which till date relies heavily on huge ad placements on TV, banners etc. and other traditional marketing approaches for their customer outreach programs.
Elon has not only brilliantly picked up the Jobs marketing style but added his own elements to it. His product launches are just as curiously awaited as Jobs. He is one of the most followed CEOs on Twitter (~40M followers) and has been vigorously active in keeping up to date with his followers. From openly discussing new concepts to keeping his followers updated on everything they are doing at Tesla / SpaceX, Musk has always tried to maintain a direct channel with his followers. He is an expert in using social media for product promotions, sourcing innovative ideas as well as utilizing it for direct customer feedback. The culture of authenticity and transparency which Musk has tried to maintain at Tesla has resulted in building a strong reputation for quality and trust in the company.
Musk enjoys nothing short of celebrity status. Unlike a lot of his contemporaries, he is highly accessible to the media constantly appearing on TV. All his public appearances and his media engagements have portrayed him as a focused, hard-working and passionate entrepreneur which has helped build a ravishing fan base for his products which becomes crucial to selling a top-quality product at a premium price as has been well demonstrated by Apple over the years.
Re-define the sales process
Buying a new car has always been a very complex and confusing process. You go to the dealership with a selected model or budget in mind and approach a salesman with it. But once he starts with the multitude of alternatives as well as add-on features you need, you start feeling a bit confused. You can feel it going out of your budget already but now you are hooked on to try it out once and you select a model for a test drive. You come back and start negotiating the price. After much hassle, you either realise it’s beyond your budget putting you right back where you started or you end up getting oversold. This entire process has been a major impediment for the auto industry.
What Tesla seems to have done is circumvent the entire process. Avoid putting confusing products before your customers. Keep them thoroughly informed of your product line. The key is to make the customers as comfortable with the buying process as possible. This means shifting the locus of control to the customers. Tesla avoids opening retail outlets (unless mandated by the law to do so) and instead uses a simple web interface to make their sales where customers can navigate through the process at their own pace. This coupled with a strong product launch and promotion strategy enables the customers to comfortably execute the entire process while at the same time enabling Tesla to boost their profits by eliminating the middleman.
Aligning oneself with a higher purpose has been one of the most successful promotional strategies. Be it politics, consumer goods or even religion, every field has tactfully employed this strategy to gain followers. Being an electric mobility company, Tesla offers a green and sustainable solution for the future leveraging the best in class technology. Musk has even opened the company’s patents to expedite EV adoption by others in the industry. All this is building an image of a company with the sole focus of creating a sustainable future for the planet which also provides a strong positive press for it. What Musk has brilliantly implemented is that big ideas and visions sell perfectly in a world where people are actively looking for a better, cleaner world.
Marketing boardrooms nowadays are bustling with conversations of how a company with $0 advertising budget is able to go head to head with its competitors pumping in billions of dollars on TV ads, billboards, digital banners and more. This they have done by modifying the entire approach to product launches and customer outreach programs utilising modern marketing tools and techniques. Simply observing Musk’s activities will give an entrepreneur a crash course on modern marketing. He might just be the greatest marketer of our generation. Following his examples can help a lot of entrepreneurs to revolutionise their entire sales process and build a strong base of customers (or as synonymical for Tesla, followers).