Remember that awesome Tesla ad a while back? The one with the car? And that woman? Drifting through snow? Cruising the city? No? Oh yeah, my bad… that was any other car brand BUT Tesla.
If you are too lazy to read, scroll to the bottom to see what we believe is key in creating marketing – sometimes even for free!
The $0 Marketing Strategy
What sounds like a YouTube clickbait at first is actually proven science (it’s probably not, but it’s still real and science is cool). Our first story is about a company that does marketing without paying for it: Tesla. Rumor has it that the company’s ad budget is a whooping $0 (obviously all the money is spent more wisely on flamethrowers and hyperspeed tunnels)!
Yet, after a recent surge in stock price the company became the world’s second most valuable carmaker after Toyota. We were wondering, how on earth is this possible?
Checking the facts
Well, before blindly following any wild rumors of some keyboard warriors online, I wanted to get my facts straight:
Does Tesla REALLY not spend on ads/marketing?
I went into keyboard warrior slayer mode and had a look at Tesla’s 2019 annual report to check and see for myself. There it says; “Historically, we have been able to generate significant media coverage of our company and our products, and we believe we will continue to do so. Such media coverage and word of mouth are the current primary drivers of our sales leads and have helped us achieve sales without traditional advertising and at relatively low marketing costs.“
Ok, cool… But how about the numbers? I mean, I tell everyone I don’t spend money on unnecessary things.. Does that mean it’s true? Debatable…
So for Tesla, the marketing budget is parked under “Selling, general and administrative” (or SG&A) which amounted to more than $2 billion (or 11% of revenue) in 2019. Now you might say “That’s a lot!”. And you’re right! But wait till you see what else is parked under SG&A: “stores, marketing, sales, executive, finance, human resources, information technology and legal organizations, as well as fees for professional and contract services and litigation settlements”. So as long as all these things are not outsourced to a secret elf-nation where the currency is empty promises and baby tears, there won’t be much budget for marketing indeed.
So let’s agree that Tesla’s marketing spending is really surprisingly low. Next question: how on earth did they become the second most valuable car maker then? How did they build a car brand that now easily beats traditional companies such as Daimler, Ford or Volkswagen in just under 20 years?
We believe it’s possible due to the following 3 key essentials
- Have a Vision (aka a really dope story)
- Rule Social Media
- Know Thy customer (better than they do)
Create a story aka vision
Tesla wanted “to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars”. I guess they made their point. No need for green fluff – they want to make cool cars that are fun to drive. I know what I am getting.
Rule Social Media
In 2019, Adam Koszary has been put in charge of Tesla’s Social Media. You might think, “so what? Our Marketing guy is called Adam as well. So is our Janitor…” The flabbergasting (I love this word since primary school) thing about this whole story is that Elon Musk found Adam online through a Twitter post of a sheep. Yes, a post of a sheep put Adam on Elon’s map and later as the Social Media guy in the company.
Moreover, Elon Musk himself is very active on Social Media. And it’s not your typical (boring) CEO kind of post written by an aspiring intern. Instead he shares a lot of witty one-liners, geeky and admittedly quite hilarious stuff. An account that’s fun to follow – it’s entertaining.
Know what your customer WILL want
Have you ever thought that you need a flame thrower? No? Well Elon Musk thinks you do. And now you do. Congratulations.
So when you were researching how to save the planet, you decided to look for an environmentally-friendly, sustainable family-friendly sedan. Fair enough. But did you ever consider that you needed a “Ludicrous Mode” to drive your kids to school? A mode of the Tesla Model S that catapults you and your motion sick 3 year old son straight into the future (i.e. 0 – 100kmh in 2.3 seconds, i.e. have fun cleaning the windshield). Only a car like the Porsche 918 Spyder can beat this. But that’s a Porsche – I expect that kind of insanity.
If you don’t want to spend on Marketing to boost your brand, product or service you need to have a solid story in place, rule your Social Media and know your customer 130%! No idea where to start? We can help!
If you realize that there’s probably no way around spending some money on marketing because you are, let’s say, selling potatoes, don’t worry, we can still help you. Reach out!