Lessons from Tesla
According to www.customerguage.com, Tesla Motors achieves a Net Promoter Score of 97. You may want to reflect on that for a minute. A score of 97 is almost unbelievable. It means that virtually everyone gave Tesla 9 or 10 out of 10 when asked "how likely are you to recommend Tesla?". It is unheard of to achieve a stratospheric score of this value. An excellent NPS would be 50 and many companies are happy with a score of 30 (out of a maximum of 100).
This raises the question as to how Tesla has achieved this magical rank. We know from all the customer experience surveys we have carried out that the overall NPS is a synthesis of what people think of the many parts of a company’s offer. An offer is made up of tangible elements such as the performance of the car, its reliability, the quality of build, comfort and so on. It also includes services such as the speed with which problems are dealt with, the manner in which Tesla communicates with customers, the frequency with which it does so etc. And then there is the effect of the brand itself on the NPS score. We know that the "augmented product", the intangible feeling that comes from the brand, can have a very big effect. Let's have a look at these factors in a bit more detail.
The physical product has to perform to expectations. In order to achieve a high Net Promoter Score it should exceed expectations. It seems that almost everyone who test drives a Tesla finds some element of its performance that excites them. Jon Richardson recently tested a Tesla 3 in the TV program, Kevin McCloud’s Rough Guide to the Future. He couldn't stop laughing or playing with a feature in the car that made a farting noise. It appealed to his sense of humour and he could see how this would endear it to his young daughter. However, it isn't just these quirky unexpected delights in Tesla that enable it to achieve such a high NPS. Gene Berdichevsky, one of the first people to be hired by Tesla, reckons that all the innovations that have gone into Tesla’s Model 3 give it a 30% performance advantage over Jaguar’s electric I-Pace. We must expect some bias from Berdichevsky but What Car?, Autocar, and almost every other car review tell a similar story. Tesla has a brilliant product.
Software is a big part of the Tesla offer. The software updates are a sort of service. There is no denying the effect of these updates. The owner of a Tesla gets the feeling their car is re-inventing itself. They keep receiving a “new” car. Make no mistake, these software updates are not the easiest thing to do. The mighty Volkswagen is experiencing massive difficulties with the software for its ID.3 electric cars that will be launched in the next few months according to a report by Germany’s Manager Magazin.
An interesting question is how Tesla performs on customer service compared to traditional car companies. On the one hand, customers love the direct contact with Tesla but its amazing success is a poisoned chalice. The wait time for appointments has increased following the growth in customer numbers. Also, the service experience has not been at its best, particularly outside the US. The thing is, a satisfied customer will forgive a few blemishes. They know that the strain on customer service is the result of so many people wanting to partake of the fabulous product.
Let's take a look at a final contributor to the high NPS – the augmented product. The marketing guru, Philip Kotler, describes the “augmented product” as any nonphysical part of the offer. Customer service would be included in this and so is the brand. The brand is one of Tesla's massive assets. It isn't just the name of Tesla that is its strength, it is what it stands for. How many people who buy a General Motors car know the name of its CEO? Indeed, how many people know the CEO of any, motor manufacturer? Except Tesla! Almost everyone who buys a Tesla can tell you that it is run by Elon Musk and he is a legend that they have bought into. Other car companies are following where he leads – at least in electric cars.
There is so much we can learn from the successes and failures of other companies. Tesla's success is bristling in lessons, especially helping us understand how to attain an astonishingly high NPS. Get the product right, get the service right, and make the brand special. Easy enough? Copy that if you can!!