Tesla sales magic works without advertising or a dealer network

Article by Anita Panait, on June 10, 2013

Despite having no advertising, ad agency, chief marketing officer or dealer network, Tesla Motors Inc. still managed to gain a reputation that keeps customers coming and its stock price rising. Tesla, which is co-founded by billionaire Elon Musk, is shying away from conventions of automotive marketing.

The carmaker has been selling its vehicles through stores located in upscale shopping malls and the Internet, instead of selling them via dealers.

Tesla currently operates 35 stores across the United States, Europe and Asia, and is planning to add 15 more in the next few years, according to the company’s filing with the US Securities and Exchange Commission. Model S owner Connie Charney related to Advertising Age that at a Tesla store in The Mall at Short Hills in New Jersey, people lean out their car windows -- including two men in a Bentley -- to take pictures of the vehicle.

He then remarked that that is “how cool” the Model S is. He noted that with Tesla Model S, one will feel like he is “part of something bigger, a new age of motor vehicles,” adding that Musk is his “hero.” Musk, who is behind SpaceX and PayPal, has been employing the art of customer persuasion to build a brand which reputation has already reached a new level.

Tesla spokeswoman Alexis Georgeson remarked to Advertising Age that the carmaker’s high-tech stores provide a setting for customers to ask questions without high-pressure sales tactics.

She added that Tesla does not intend to hire agencies or run ads in the near future. Tesla’s in-house marketing team only employs seven staffers, and an internal team operates its Web site, where orders can be placed directly. In contrast, Nissan Motor Co. spent $25 million to advertise its Leaf EV in 2012, according to Kantar Media.

Topics: tesla, advertising

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