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How challenger brand Tesla is Disrupting the Market

10 April 2014 BY

141 Flares Twitter 75 Facebook 11 Google+ 29 LinkedIn 17 Buffer 9 Email -- StumbleUpon 0 Pin It Share 0 Filament.io 141 Flares ×

Tesla-image

Tesla, the Californian electric car maker, is using its position as a challenger brand to disrupt the marketplace. But is its aggressive approach to PR having an impact both on and offline?

Despite largely being a Californian phenomenon, Tesla is making waves globally as the first brand to launch and establish a successful electric car offering in the United States.

A mixture of PR, digital savvy and old school marketing has been central to its accomplishments. In this article we take a look at some of the key milestones in how it’s achieved success.

While renowned automotive brands, such as BMW and Mitsubishi, have launched their own offerings, it is probably a bitter pill to swallow to see a home grown American brand  looking most likely to succeed in the lucrative US market.

At time of writing, Tesla was the third best selling luxury car in California behind Mercedes and BMW.

They’ve achieved this success by tearing up the rule book, and probably making a few powerful enemies along the way too.

Tesla doesn’t have dealership networks and its showrooms are in retail malls. Naturally, the US dealer networks aren’t best pleased and are lobbying hard against Tesla. Just look at the Dupont- General Motors anti-trust case as evidence, which saw the car dealship network in New Jersey challenge the company’s ability to sell cars there based on the fact that there was no dealer network to support sales and maintenance.

It’s entirely plausible that the petroleum lobby aren’t too happy either.

And then there is the damaging criticism which Tesla seems immune to at present. Is Tesla really green when in reality it is powered by the national grid which is roughly “40 percent coal, 25 percent natural gas, 20 percent nuclear power, and about 10 percent renewable sources, led by hydroelectricity”? Do they really have a 300 mile range because certain journalists have broken down on long journeys? Oh, and apparently its finance programme sucks, according to some other motoring journalists.

Elon MuskCentral to this narrative is the company’s chief executive Elon Musk. He’s accused of being mouthy, aggressive and overly combative and is trying to destroy the automotive industry from within. He’s criticised the media and their false reviews, called reporters douchebags, dissed the Toyota Prius for not being a true hybrid and said he’d like to run Detroit.

In fact, he is a PR polymath.  For every negative story he’s made a proactive and confident rebuttal, winning further headlines.  He’s even gone on the attack and taken on much bigger automotive brands, again winning more editorial and plaudits along the way.  He’s trashed the automotive dealer industry and many younger and female customers have fallen into his arms

It’s no surprise that he also Silicon Valley’s golden boy.

So will Tesla fail?

Despite its chief executive stating that he thought that they would more than likely fail, the business has been going from strength to strength. Tesla has adopted the classic marketing position of challenger brand. The challenger brand is a David versus Goliath concept, except that is where the biblical reference ends.

It ends because the challenger brand is a gobby, aggressive turk, shouty and often first to cast a stone. They’ll stop at very little to ensure they are always in the headlines. They’ll spin and they’ll attack their competitors, knowing that an established market leader will probably not want to retaliate for fear of upsetting the status quo or being accused of a bullying.

In short, they use every ounce of equity from their underdog status to disrupt and usurp the market leaders.

They also have an amazing product, which helps enormously.

This success has led to widespread acclaim that people should copy their approach to marketing. Alas, this advice is misguided, because not every company can be challenger brand. This title can only be bestowed upon a small proportion of plucky innovators.

How successful is Tesla?

Firstly let’s look at the bottom line, or rather shareholder value. Its share price has risen 450% in the last year.

Fig 1. Tesla’s share price keeps on increasing

Tesla Share Price

Share price is very sensitive to a company’s reputation and this increase is impressive by anyone’s standards.

Although not the most accurate data, Google Trends shows the steady increase of interest in their brand (see fig 2)

The increase in share price mirrors the increase in online search around the business.  For me this is a sign that the brand awareness is increasing and that the PR campaign is having some sort of positive impact.

 

Fig 2. Interest over time for the Tesla brand

Tesla brand

While Tesla is sold in a multi channel world, its digital offering is very important given its lack of dealer network.

All the attention that their chief executive attracts because of his loud mouthed commentary and aggressive tactics secures press coverage. A cursory search using Majestic showed over 900 national and international news articles on the business see fig 2.1

Each article sent branded search traffic, referral visitors and of course those articles, with links in, improved the search engine visibility of the Tesla site for non-branded search traffic.

Fig 2.1 see link acquisition to the Tesla website and large spikes around key scandals and statements about Tesla

Tesla Majestic SEO

Although it is difficult to see from this diagram, after downloading the link profile of Tesla, the large spikes in links are around the time of a number of media storms and controversies all of which Tesla and their CEO tackled head on.  Classic challenger brand Telsa, the Californian electric car maker, is using its position as a challenger brand to disrupt the marketplace. But is its aggressive approach to PR having an impact both on and offline?.

Fig 2.2. links have seen increased search engine visibility for Tesla in Searchmetrics

Tesla Search Metrics

This Search Metrics chart shows that in search at least the PR effort is working and is increasing visibility of the Tesla website.  The Search Metrics graph mirrors the increase seen via Google trends and suggests that the PR campaign is workng to drive brand awareness (and probably revenue) both on and offline.

But how far has Tesla got to go until it is a market leader?

Fig 3: a graph to show interest in Tesla compared to Mercedes and BMW.

Tesla brand comparison

When will the big automotive companies really start to sit up and take note? Tesla has a long way to go yet. Although not completely conclusive, this graph (fig 3) shows interest in Mercedes, BMW and Tesla. While interest in Tesla has increased over time, it is still a minnow. Tesla will remain a challenger brand for some time yet.

The takeaway for any digital marketing or  PR professional here  is that being a genuine challenger brand gives you permission to  be aggressive ,quirky and comment on issues that many businesses would normally shy away from.

With the right CEO who is willing to be the vocal mouth piece and face of PR,  a challenger brand can build a reputation and generate significant revenues.

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AUTHORED BY:
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James Crawford is an award winning B2B and consumer PR practitioner and has worked with at some of the biggest PR agencies in the UK. He focuses on using reputation and ecommerce metrics to track the ROI of PR.
  • groovegenerator

    Tesla’s real break will come when people realise that it never really needs routine servicing – all the car’s systems can be remotely monitored and the car can be ‘warned’ when it needs something dealing with, such as brakes or tyres. It’s a real disrupter that breaks the distribution chain rather than the manufacturing chain. Heady days. Big manufacturers will follow suit and that’ll be the end of the dealer networks.

    • http://www.pragencyone.co.uk James Crawford

      Can I just say now that I want one? Just in case their PR people could offer me a test drive… :-)

      • http://www.redmudmedia.com/ Ralph du Plessis

        I think we all knew that, James :-)

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