The Lesson from Tesla

Last week something amazing happened in the automobile industry. People lined up to pre-order the new Tesla Model 3, the first mass market electric vehicle from Elon Musk’s revolutionary car company.

Tesla has no dealerships, so they weren’t lining up for a test drive. If you pre-ordered today, you would not get a car until 2018. But lines at the Pasadena Tesla store stretched around the block by 6:30 AM Thursday morning for a car that wouldn’t be revealed until 8:30 PM. People handed over $1000 deposits for a car they’ve neither seen nor tried.

This seems to go against the entire marketing model of the auto industry. What’s more, electric cars aren’t new. Prius, Nissan Leaf, Chevy Volt — there are several models.

But Elon Musk is the Steve Jobs of the car industry. There were smartphones before the iPhone, too, but people gladly stand in line to order their new iPhones. Only passion for the product would drive people to stand in line for a car. And Tesla has created almost a cult-like following. Why?  It’s not about the car, really.  It’s about the ownership experience.

Like Apple, Tesla has redefined the industry by re-creating the user experience.

For example, service. There are no Tesla stores in Michigan, so Tesla owners buy their cars online, or in Ohio or Indiana. If a car needs service, Tesla sends a service person to your house, replaces the car with another Tesla to drive during the repair process, and then returns the car to you at work.

This kind of service, so unlike the conventional car service experience in the mass market, helps the owner to fall in love with the product. People actually recount their service experiences on Facebook, fueling future sales. They act as unpaid product evangelists.

We asked a friend who drives a Tesla how he felt about its OTA (over the air) software updates. To push out those updates, the car must constantly be in touch with Tesla. We asked, “did you have to sign a consent to get OTA updates? Were you concerned about your privacy?”

His response: “I really didn’t care because I know they are constantly reading the data from my car to make a better product. They were able to push a major update to the car over the air that made it capable of driving itself. If I’m getting that kind of experience, I really don’t mind letting my data be read.”

It’s what we all know: consumers will trade their privacy for a compelling user experience.

To compete with affordable Teslas, the rest of the industry is going to have to change both its sales experience and its ownership experience.

Until now, Tesla has been a luxury product. But all that changes with the Model 3. At $35,000 with a $7500 tax credit, consumers are looking a sub $30,000 car with an incredible reputation. As he said he would, Musk has brought the price point down to where Tesla can really compete with the Chevy Bolts of the world.

With the connected car technology that exists today, we can enhance the ownership experience for other OEMs, beginning at the dealership. We can remove that sticker in the corner of the windshield that reminds you when your next service is due, and enable the car to tell you that your car’s oil life is going to end in a few weeks. In fact, the car could also check the dealership for available service appointments, look at your calendar, and make you an appointment.

 

So, are you ready to create a better user experience?

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