be self-driving cars. Wednesday’s announcement, delayed two days from the original announcement scheduled for Monday October 17th, stated that all of its cars will have the ability to drive themselves, referred to as level 5 autonomy.Tesla announced that all of their cars will
Before the announcement, many experts and industry commentators had little idea what it would be. They knew, however, that while the delay of the big announcement for a couple of days is unusual for such a high-profile, public company, it wouldn’t likely cause any loss of confidence by their long-time fans.
Tesla Breaks Top 20 for Customer Experience
It’s safe to say at this point that Tesla has a loyal following. Tesla was the only carmaker that made the top 20 for Best Customer Experience. In the research mounted by Group XP, Tesla came in number 20. For Customer Experience ranking, the research team used four criteria, which included:
- Impression: Do they have a unique reputation?
- Interaction: Does the company deliver on your needs?
- Responsiveness: What is their online presence and quality of their content?
- Resilience: Do they have a higher brand purpose, meaning a desire to make customers’ lives better?
The team then came up with a point system to rack and stack over 43,000 brands across 36 markets. To give you an idea of the range of brands included in this list, the number one brand for Customer Experience was Pampers. Pampers had 149.9 points vs. Tesla’s 116.79—which, we can all agree shows Pampers was loads (ahem…) better.
Tesla Wears Their Halo Well
While BMW (114.19) and Mercedes (111.98) were right behind them at spot 23 and 28, respectively, the fact remains Tesla came out on top for carmakers. Why? They have a sparkling halo-effect that attracts and retains a loyal fan base.
A halo-effect is a lot like your brand reputation. It is a high level of perception of your brand. It is not a shining circle of light to indicate your divinity—although, in some ways, the halo I’m talking about does just that. The halo-effect represents how people interpret your experience based on their previous experiences with you and your brand. The Halo-effect exists even if a customer has never bought one of your products. It influences people’s perception of your actions, products or services. However, unlike the halos that angels wear, it can be good or bad.
To give you an idea what I mean, let’s consider other car brands. I have never owned a Ferrari (which came in at position 30). But when I hear they have a new car, I know it will be beautiful, fast, and WAY out of my price range. I will be right about all three. However, if I hear that Volkswagen has a new fuel-efficient and low emissions model, I know it will be adequate, affordable, and have a much larger carbon footprint than it says it will. I will be right about all three.
It can also affect people’s interpretation of their experience as negative even when they love your brand, and they have an entirely sufficient experience. For example, let’s say you have always wanted to drive a Tesla Model X because you have heard so much about how exhilarating and life-changing it will be. You finally get your chance. You drive the car, and it is great, but not exhilarating or life-changing. It was okay, just not exceptional. Unfortunately, this experience can translate into a feeling that the brand lets you down, which then reflects poorly on your experience, even if only at a subconscious level.
A Loyal Fan Base Is Forgiving
In recent years, Tesla increased their research and development spend. Their budget in2015 reached just under $718 million, with no signs of slowing down. Unfortunately, their losses are almost equal to that each quarter, which you can see from this graphic:
Numbers like this would be the death knell of most companies. And yet, Tesla retains a halo-effect of being a company to watch, the future of…well, something BIG!
It also seems that not being able to get the product you want from Tesla would also create a negative halo effect. However, with car buyers, the fact that the Tesla Model 3debuted this Spring with delivery not scheduled until the end of 2017—over a year later isn’t a problem. In fact, the orders they already have means that if you reserve the car today, you will get it in mid-2018—over two years later!
Tesla announced that the self-driving car is here. Moreover, Elon Musk and Tesla solidify their reputation for thinking big and backing their claims for being the cars of the future. Apparently, it’s working. They came out on top of all the carmakers in the Customer Experience Index. Despite their heavy losses in R & D, they continue to maintain a reputation for being innovative. Moreover, you can’t even get one of their cars until a little under two years from now. It also shows that their strategy for brand engagement and the halo-effect it creates is anything but on auto pilot.
To learn more about these fascinating and compelling concepts for yourself and business, please register for our 3 part Training Course based on our latest book:The Intuitive Customer: 7 Imperatives for moving your Customer Experience to the next level (Palgrave Macmillan, 2016) for only $59!
If you enjoyed this post, you might be interested in the following blogs:
Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.
Follow Colin Shaw on Twitter @ColinShaw_CX