Tesla’s Radical Marketing Strategy

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Editor’s note: Writing in Forbes (September 1, 2013) about how Tesla is achieving unexpected sales in California, outselling Porsche and Jaguar, Siimon Reynolds suggested “Why You Should Copy Tesla’s Way of Marketing.” It’s an interesting idea, and we’re presenting it to you:

Tesla on beachThis week a major milestone was achieved by Tesla, the electric car company.

In California, they became the third biggest selling luxury car, behind only the Mercedes E Class and the BMW 5 Series.

That’s an extraordinary achievement for a brand that didn’t even exist a few years ago.

How did they do it?

Well certainly the car has got highly positive reviews (although not universally so), but few people have noticed the radical marketing technique at the center of Tesla’s sales strategy.

The strangest car showrooms of any car maker in the world.

For starters, they are not located along main roads like every other car dealer, they are in shopping malls – right alongside brands like Zara, Bloomingdale’s and See’s Candies. Secondly the showrooms are only the size of a small shop, often only squeezing in a single vehicle into the space. This radical departure from car marketing norms completely changes the traditional customer math.

Most car dealerships would be lucky to get a hundred potential customers perusing the cars on their lot each day. But because of their location, Tesla gets tens of thousands of people walking right past their car, every single day.

Incredibly, many sales have come from people who had zero interest in buying a car until they saw Tesla’s showroom (they were probably in the mall to buy a dress or see a movie). Impressed by the car’s design they could walk right in and immediately talk to a sales person – rather than have to specifically drive out to a dealership.

It’s been a brilliant move for Tesla, as this week’s sales figures demonstrate, but is it not possible that you could use the same concept to grow your business?

As you can imagine, Tesla has incurred the wrath of traditional dealers. According to the Chicago Tribune, 48 states prohibit or limit the direct sale of automobiles, thanks to long-established laws requiring car purchases to go through a licensed third party. “Local auto dealerships are often among the biggest generators of tax revenue,” writes CNBC’s Philip Lebeau. “For many legislators, the message is clear: protect the local auto dealers, and you protect the economy in your district.”

Despite the opposition, Tesla is committed to selling cars their way. “If everyone who comes into a Tesla store leaves it with a smile, we’ve done our job,” said George Blankenship, Tesla’s VP of Sales and Ownership Experience. “Don’t take this the wrong way, but I don’t care how many of those people actually buy a vehicle after that first experience. Eventually they will come back and buy a Tesla not because it was sold to them, but because they really want to become part of the Tesla community.”

If Tesla can find success reinventing the way cars are marketed and sold, what might the rest of us do?  Would you do it if you had to take on an entrenched political or economic structure? What’s the wildest, most box-busting marketing strategy you’ve ever encountered? Or dreamed about doing?