Elon’s Unique Strategy

When was the last time you remember seeing a car commercial for Ford? Toyota? Honda? We can’t forget about Shaq’s Buick commercial:

 

Now try to remember the last time you saw a Tesla commercial. Go ahead, take your time.

Absolutely nothing comes to mind. So how exactly did Tesla become the best selling luxury sedan in America in February? Let’s even scratch the models I talked about earlier and focus solely on luxury brands – Audi, Mercedes, Lexus? We can all recall some sort of commercial. But not Tesla.

Elon Musk, CEO of Tesla, has taken a unique approach to advertising with social media. An active Tweeter, Musk has done a great job of being Tesla’s voice to the public. Unlike companies like Apple, who wait till large events to unveil what they have in store, Musk likes to give people a heads up of what’s to come. That’s not to say he’ll give everything away – just a little something to get people excited. On July 20, Musk unveiled Tesla’s Master Plan, Part 2. This wasn’t by surprise though.

screen-shot-2016-10-09-at-6-33-10-pm

Musk’s first public statement regarding a Masterplan Pt. 2

screen-shot-2016-10-09-at-6-33-24-pm

Musk’s single Tweet boosted Tesla shares up 4% on July 11. Even after Tesla’s shared dropped significantly after Tesla decided to acquire SolarCity (which was not long before this Tweet on July 10), investors still believed in Musk’s future plan. This isn’t the only case. In March 2015, Musk Tweeted about a major new product line that would be unveiled in April. Result? Another increase of around 4%, increasing Tesla’s market cap by over $1 billion. The two tweets above were retweeted a combined 17,000 times. Now, that might not seem like a very large number. But, when you look at the fact that Musk (and Tesla) paid a grand total of $0 for it and got an increase of $1 billion in market cap, 17,000 retweets doesn’t look too shabby anymore.

Although many investors believe that Tesla’s shares are overvalued (mainly because it’s still not even a profitable company), these Tweets have done a great job to make investors excited about what’s to come. And because Musk was able to have pretty good success with Master Plan 1, which he wrote in 2006 and may have been ludicrous at the time, you really can’t count him out for any future innovation.

Compare Elon Musk to other innovators in the space – Tim Cook, CEO of Apple, has a huge 5.5 million followers but less than 300 tweets to his name. Lots of followers, few Tweets. Marc Benioff, CEO of Salesforce, has a grand 13,000 tweets but less than 300,000 followers. Lots of Tweets, few followers. Sundar Pichai, CEO of Google, has a bit over 800 tweets but less than 600,000 followers. A decent following, but still pretty low on Tweets. Compare that to Musk. A whopping 5.5 million followers with over 2,000 Tweets – all related to Tesla or SpaceX. He has been a voice that has made Tesla so much more transparent as a firm overall.

screen-shot-2016-10-09-at-7-11-41-pm

Not only is he being transparent, but he’s also proving everyone wrong. A lot was said about the unfortunate Autopilot accident that occurred this past summer – read up about it here if you don’t know. Consumer Reports wanted Musk to change the name from Autopilot to something else and remove some of the autosteer features. Musk has not been afraid to Tweet about automobile accidents:

screen-shot-2016-10-09-at-7-10-37-pmscreen-shot-2016-10-09-at-7-10-51-pm

Back to back Tweets, Musk is definitely letting the public know that the Autopilot feature is still safer than if a human is driving – the data is right there. One fatality every 222 million miles or one every 88 million miles. You pick. Musk is just giving out the data. Another driver was killed on the road while in a self-driving Tesla car this summer, and people were quick to blame that the Autopilot feature was the reason why he died. After deeper investigation, Musk responds:

screen-shot-2016-10-09-at-7-22-13-pm

Musk has championed what it means to use social media to not only improve the brand and image of a company (and he’s running two) but also shows how CEOs can use such transparency to alert the public about what’s to come. This transparency can give the public a better view of your overall product and give financial investors more confidence about where you’re headed. It’s not that simple, though. Musk has had to be extremely careful to not reveal any information that would go against the SEC, especially one main rule regarding disclosure of select corporate news. However, Musk is just a great example for executives to learn how to use advertising that isn’t just a 30 second television commercial that probably cost thousands of dollars. Elon does it better – and does it for free.

7 comments

  1. emmaharney21 · ·

    Great post! You have a great argument with interesting and relevant images. This post makes me appreciate the roll that social media is truly playing in advertising and public relations for companies. Elon Musk makes me think of Steve Jobs in that they are both leaders that represent the company as a whole. Both of them have this ability to speak for the entire company because they represent it’s brand. For an individual like this their personal twitter activity is essential. This post highlights a really important example of leadership and social media.

  2. Nice post! I know for me I only know about Telsa because of my brother. He always gets excited about Tesla, and when we were on a family trip to Seattle and Vancouver over the summer, he pointed out every Tesla that he saw (and there were a good amount out there). I guess Tesla also has word of mouth to thanks for its popularity. I think the transparency of Elon Musk is refreshing and something that consumers like to see. It probably makes people feel like they’re more involved with Tesla, and thus can connect more with the brand.

  3. gabcandelieri · ·

    Awesome post! I completely agree that Musk’s simplistic, transparent tactics are genius. You would think that using Twitter in this way would be more intuitive; however it seems like this simple rationale is what sets Musk apart. In terms of crisis management, CEO visibility and transparency are absolutely crucial to the survival of a brand’s image and although its shares have decreased, Tesla has this tactic to thank for its corporate endurance. I personally think product teasers are more effective than waiting for the product to be revealed at a large event. This definitely gives the company more leeway if the new concept is a flop. It seems like Musk has a good handle on the future of his companies through his own digital strategy.

  4. Nice post. It’s been interesting to watch Tesla’s emergence as an automaker. They have certainly tried to push the envelope in many ways, and regulation has held them back in some ways. Will be interesting to see how it plays out over time. Is it the real deal, or just a fad that will never come to be? Time will tell.

  5. You make a good argument for the value of social media in implementation of a marketing plan and stock price support plan. Some of the intrigue around the desire to have a large social media following as an indicator of popularity or success leads to the the large following growing larger with momentum.
    I think his following is largely due to the fact that he has proven he can solve unique, challenging problems that the planet shares, make profits, be ecologically sound, while producing a quality product with a good reputation. The engineering and scientific people read him: when you have a limited amount of time, you may want to spend it reading the words of smart people who are doing unique things. The business people read him: people make money in the markets often by predicting which company will succeed, and Musk makes predictions that come true.

  6. skuchma215 · ·

    It’s really interesting to think about how one man’s speculative announcement can increase a market cap by a billion dollars. Musk really does have one of the most powerful online presences, which I think can also be seen in the fact that his twitter followers for his own personal account outnumber both Tesla’s and SpaceX’s followers by the millions. I didn’t know Musk was crafting his tweets to comply with the SEC, I guess I had never really thought about the implications. I hope you’re right and more executives follow in Elon’s footsteps by increasing their presence on social media with tweets that are actually interesting and engaging.

  7. adawsisys · ·

    Great post. I agree with your opinion that Elon Musk uses social media as a great marketing tool for Tesla. Elon Musk definitely understands the power that social media has in today’s age. He appears to make an extra effort to produce press releases and discuss his plans on social media and on Television. He is aware of the importance of his own personal brand in the digital age. His goal seems to be to promote his personal brand as an innovator and as a visionary of the future. With that being said it is strange that he revealed that he thinks there is a very high chance that we are living in a simulation. What does his personal brand have to gain from this statement other than maybe gaining more public exposure?

%d bloggers like this: