Can Tesla Continue to Grow Without Mass Marketing?

Kendall Smith

A wise person once said, “Success breeds more work,” and Tesla’s remarkable achievements will magnify further if the brand commits to mass marketing. Competition in the electric vehicle space is about to intensify.

Dear Tesla,

Congratulations on the recent press surrounding Tesla’s new Model S Plaid model, which Dan Neil of the Wall Street Journal described as a “technical tour de force.” Zero-to-60 in two seconds? A 187-mile charge in 15 minutes? These represent engineering feats that no company has ever achieved—that’s admirable.

There is, however, a tremble in the force. If Tesla is to become a global stakeholder in the automotive industry, there’s one notable gap in Tesla’s armor. The company’s rivals will launch more than 60+ electric-vehicle (EV) models over the next three years. That will introduce significant competition to Tesla’s line of just five models. So it would be wise for Tesla to consider how the EV battlefield will change in 2022 and beyond.

Consider brands like BMW, Toyota, and Mercedes-Benz—the images and taglines from these brands resonate with consumers on a regular basis. Think “The ultimate driving machine” and “Let’s go places.” These taglines are well known among consumers as a result of years of brand building and awareness campaigns. The level of familiarity within the minds of hundreds of millions of consumers doesn’t happen overnight. It stems from the massive investments that car manufacturers make in marketing and advertising. In good economic times or bad, their marketing represents a constant.

Tesla has never advertised to the point where it has established a brand identity. In fact, Tesla reiterated how it shuns traditional advertising in its most recent annual regulatory filing:

“Media coverage and word of mouth are the current primary drivers of our sales leads and have helped achieve sales without traditional advertising…”

Yes, consumers are familiar with the technological wonder of Tesla cars. Enthusiasts are passionate about the Tesla driving experience and the advancements the company has made. They gaze in wonder toward the skies to see what Elon Musk’s SpaceX will achieve in space travel.

What they don’t have is a clear answer about why Tesla does what it does. This represents one of the core tenets of marketing, and it’s something Simon Sinek’s Golden Circle presentation articulated brilliantly: “Consumers don’t care what you do. They care why you do it.”

Apple addressed this head-on with the spot it ran during the 1984 Super Bowl, appropriately titled “1984,” and thematically it touched on George Orwell’s famous novel. The message, which ran one time on broadcast TV, espoused Apple’s brand identity. It laid the foundation for the company’s “challenger” identity and it solidified Mr. Lee Clow of Chiat Day as one of advertising’s creative rock stars.

This provides perspective because the field of battle is about to change radically. Tesla’s competitors are large in number; they have been planning a counterattack for quite some time; and they represent some of the most brilliant marketing minds in the world. They have the marketing machinery in place and know how to make an indelible impression in the minds of car buyers.

If you need further proof, consider where Tesla sits on the totem pole of U.S. car sales. For calendar-year 2020, Tesla’s sales position is No. 13, just ahead of Jaguar/Land Rover, yet behind Mazda, and they did it with zero mass-marketing investments.

The automotive industry, according to Nielsen Ad Intel data, spent more than $11 billion in advertising in 2019. It also spent $7.3 billion last year—when the world came to grips with the onset of a global pandemic. Given the industry’s collective electric vehicle pipelines, it’s safe to assume that manufacturers will earmark a large swathe of their future media investments squarely at stealing share from Tesla. 

What can a brilliant engineering company like Tesla do to extend its global footprint? Here are several humble suggestions:

  1. Task your CMO to invest in MarTech: Multi-touch attribution, for example, identifies impression-to-conversion insights and reveals which advertising mediums have a bigger impact on results. Invest in a DMP and activate first party data in tandem with third-party to broaden reach and impact. Identify your best target audiences through ROI analytics that uncover what consumers bought, what they traded in, and what ultimately drives Tesla car sales.
  2. Create an Advertising-Impact Event: Launch a two-minute branded video within a venue that is befitting for a brand like Tesla. The Super Bowl could work, but perhaps there’s a better way to espouse Tesla’s core values. This touches on Simon Sinek’s “why” ethos noted previously. Schedule a primetime broadcast on Earth Day in 2022—celebrate man’s relationship with the planet, surround your message with performances by music artists and provide a venue to showcase earth’s guardians (i.e., experts who promote green innovations). If you produce it, you can demand that no other car manufacturers can advertise within the event. Alternatively, run the event on Netflix and lay claim to running the only advertisement that has ever appeared on their platform.
  3. Develop Consistent Messaging: After Tesla’s “advertising-impact event,” begin the rollout of your brand identity, stick with it, and measure it using brand resonance KPIs. There’s a reason why people have been drinking sugared water for over 100 years, and not batted an eye while doing so: Coca-Cola’s advertising has been forever consistent.

Reciprocally, traditional car manufacturers will benefit by magnifying their brand equity. This will drive loyalty, which is far more economical in comparison to the costs of acquiring new customers. Organic retention will help sustain a company’s share of market. Furthermore, when new EV models launch, ensure messaging cites the technological advancements your company has made in new models. Spotlight awards and recognitions from the likes of JD Power, and if necessary, sacrifice short-term profits by investing in new EV innovations that will anchor your company as an industry leader.It is rare to find a scenario where the original disruptor to an industry (e.g., Tesla) may find itself on the defensive after making impressive market share gains. But we know that companies that commit to higher-funnel marketing tactics will net out ahead of those that don’t.

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