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Tesla arrives in Australia

Ad buster: The first Australian Tesla dealership has opened in the Sydney suburb of St Leonards and while you won’t see any TV ads about the cars, the EV-maker hopes word of mouth will make you swing by.

Advertising doesn’t work says Tesla as first Australian dealership opens

9 Dec 2014

TESLA has arrived in Australia with its first dealership opening in Sydney this week, but don’t be concerned if you didn’t know because the American electric car-maker has not done any advertising, nor will it ever, according to the company’s local marketing boss.

It’s a concept as radical as the products themselves, the first of which is the Model S four-door large sedan that has finally landed in the country years after the first buyers put down their initial payment.

Speaking at the Australian launch of the brand at the new dealership in the Sydney suburb of St Lenonards, Tesla marketing and communications manager Heath Walker would not reveal how many cars were on order, but said the strategy for selling more will not involve advertising.

“No ads on TV – believe it or not we’re not doing TV,” he said.

“We do not do any print ads either and we do not even pay for the promotion of social media. We do social media but it’s all earnt and owned and I’m a strong advocate for that.

“The only ad that we’ve ever done is in your publication – GoAuto – for recruitment. That is the only paid advertising we have done.”

Mr Walker also did not divulge sales projections, but said the product itself and word of mouth will be enough to sell the cars in volumes they will only just be able to keep up with.

“If you go back to the traditional four Ps of marketing – and they’ve changed multiple times: the first P is product – ours speaks for itself Price – we have the best conversion rates going around in terms of what it costs in the US to here Place – you’re in it [the dealership] and the last one is promotion.

You get these first three right and the last one happens by itself.

“You drove the car today, you’ll go and tell five friends, a couple of those will come and test drive it and they’ll tell five friends. We can’t keep up with that method in itself so there’s no need for us to spend on advertising.

“The other benefit to that is if we’re spending less on advertising, more goes into the infrastructure which enables us to provide what we need to for our owners – they’ll be more superchargers and building more store locations.”

Founded by tech billionaire Elon Musk, Tesla has a policy of not engaging in paid advertising. Instead high-end retail stores in shopping centres, test drive days for the fans and public, social networking and word of mouth are the awareness techniques relied on for giving the brand exposure.

Mr Walker said the no paid advertising mantra attracted him to the job at Tesla.

“It’s one of the reasons I came to the company and I’m a marketer.”

Asked if he thought the unorthodox approach to brand awareness would be successful Mr Walker said the results so far – although he wouldn’t give figures – showed that it already was.

“We’re seeing it working. The reaction in Australia, getting people into cars, it’s working. We’re getting the demand.

“I think consumers are smarter than they’ve ever been because of the disposable knowledge that’s available through the internet for them to be able to source information and then come in knowing about the product and the price.

“To have a one-way conversation these days is becoming an art that doesn’t work as well as it did 10 to 15 years ago so we need to embrace that two-way conversation and put the consumer at the front and centre of everything we do which is why we do direct sales and why we don’t advertise.”

Mr Walker said an important part of Tesla’s customer service is collecting data on prospective buyers when they visit a dealership. This information can then be accessed to tailor-make a person’s interaction at other Tesla locations.

“There’s a lot of marketing material around single-customer view which in essence is knowing what the customer wants and providing it to them,” he said.

“I’m not sure it requires a strategy, I think it requires giving them a produce they want and treating them how they want to be treated. That’s the strategy.”

The media will find monitoring Tesla’s success quantitatively difficult with Mr Walker revealing the company will not be signing on as a member of the Federal Chamber of Automotive Industries (FCAI). This will mean the company’s monthly sales results will not be published in the official VFACTS report.

The Model S is currently the only car on sale in Australia by Tesla, but it has ambitious plans with the Model X SUV to arrive next year followed by the Model III in 2016, which will rival the BMW 3 Series small sedan.

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