In January 2020, Tesla officially became the most valuable U.S. automaker in history. The company, which was founded in 2003, suppressed its 114-year-old competitor Ford Motors when shares reached around $469. A month later, they hit a record price of $900 and made Tesla the world’s second most valuable auto company (behind Japan’s Toyota).

But Tesla is disrupting more than the automotive industry. It’s disrupting advertising.

A report from BrandTotal revealed the company spends $0 on advertising. Instead, it focuses exclusively on organic social engagement (user-generated content) and word-of-mouth. This unusual strategy has resulted in communities of Tesla owners worldwide and unprecedented social engagement.

Let’s look at the numbers:

In 2015, 14.2 Instagram photos mentioned Tesla for every car it sold that year. Ford, in comparison, achieved a mere ratio of 1.6
In 2017, pre-orders for the Tesla Model 3 reached 253,000 within 36 hours of its announcement. That’s roughly $10 billion in total.
In 2018, Tesla’s community members submitted fan-made advertisements for the Project LoveDay contest. The winning video received over 1.2 million views on YouTube, which referred to over 300 customers to the brand. Consumer Reports has also founded Tesla has the most loyal customers of any car company.

Why Tesla has the most loyal customers

Multiple studies throughout the years demonstrate that Tesla has forged a strong bond with its customers. Last year, AutoTrader named Tesla the most-loved auto brand for 2019 (using feedback from a survey of over 60,000 car owners). Tesla has also been crowned as the most-loved auto brand for three consecutive years, achieving an overall satisfaction rating of 90%.

These high levels of satisfaction are translating into exceptionally high rates of customer loyalty as well. More than 4 in 5 Tesla customers — which is 80.5 percent — buy or lease another Tesla when they return to the market.

For a company, less than 20 years old, that’s quite an achievement. How did it do that?

Telsa Model S. Over 253,000 orders were made within 36 hours of its announcement

Establish an emotional connection

All of the most beloved brands have one thing in common: they have an emotional connection with their customers. Tesla, Patagonia, and Apple have developed a cult-like following which acts as their ambassador; telling friends, their family member, and internet strangers why their brand is superior.

A study by Accenture revealed that 63% of consumers favor purchasing from purpose-driven brands that share their values and beliefs.

What separates most companies today from Tesla and Patagonia isn’t their great products or their CEOs — it’s their commitment to a mission that unites their brand, their customer, and their employees. That’s where emotional connections flourish.

People don’t buy what you do; they buy why you do it.
Simon Sinek, author of ‘Start With Why’

Tesla’s mission statement reads, “Tesla’s mission is to accelerate the world’s transition to sustainable energy. Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric — that electric vehicles can be better, quicker, and more fun to drive than gasoline cars.”

Although Tesla is a car manufacturer, its main interest isn’t just automobile sales — it’s promoting sustainable energy. The company also manufactures solar panels and integrated renewable energy solutions as part of an entire sustainable energy ecosystem.

Having a consistent mission fosters a loyal community, which translates into bottom-line results and companies that stand posited to withstand the test of time. It’s what gets people to root for you.

Foster a loyal community

Last year, AutoTrader conducted a survey of over 60,000 car owners, and ultimately named Tesla as the most-loved auto brand for the year. Respondents highlighted the car’s tech features — including the semi-autonomous Autopilot system — and the community formed by electric-vehicle owners.

These communities are known as the Tesla Owner Club, where members help advocate for Tesla by supporting legislative efforts, volunteering at shows, educating new and prospective owners, hosting social events, and passionately referring friends and family to explore Tesla ownership for themselves.

Vivianna Van Deerlin, president of the Tesla Owners Club in Delaware Valley, says “Tesla is more than a car company, it is a community of owners with many things in common, including a concern for the environment and a love of their Tesla vehicles.”

Tesla’s communities are one of the company’s most valuable assets. They provide valuable customer insights, increase CLTV (customer lifetime value), and help form a powerful emotional bond between the consumer and the brand.

In 2018, Tesla’s community members submitted fan-made advertisements for Project LoveDay contest. The eventual winner produced a video with over 1.2 million views on YouTube, and he alone has referred over 300 customers to the brand.

Tesla Owner Club logos from around the world

Build trust through authenticity

Trust and transparency are crucial components for a steady brand-consumer relationship.

While most car companies leverage Facebook and YouTube as their main audience engagement platform, Tesla is one of few to focus primarily on Twitter — not as an advertising platform — but as an open, direct communication channel with customers.

In 2014, for example, Tesla drivers submitted an open letter to Musk asking to make a few changes to the Tesla Model S. Musk personally respond via Twitter, and ultimately implement some of the suggested changes.

Ad taken out in Palo Alto Daily by two Model S owners is right. Many of the suggestions will be implemented soon. pic.twitter.com/cF43PvJDgQ
— Elon Musk (@elonmusk) August 23, 2014

It’s one thing to allow customers to provide feedback. It’s entirely another to listen and respond by taking action. Incorporating customer dialogue into the company’s operation helped Tesla develop an open, customer-centric culture and boost their loyalty to the brand.

Although Musk had his fair share of controversy on Twitter, his authentic use of the platform and good taste in memes has crowned him the Internet’s favorite “Memelord.”

Sometimes creating genuine, authentic connections requires putting the relationship ahead of conversions. Building trust and establishing a positive reputation don’t happen in a vacuum. They take time — but in a world where the average company lifespan is under 20 years, most companies tend to shy away from long-term planning in favor of short-term results.

It takes 20 years to build a reputation and 5 minutes to ruin it.
Warren Buffett, American business magnate

For example, a purpose-led approach must extend beyond one-off campaigns and statements to read as authentic, and brands must embrace causes that make sense for the company rather than choosing a purpose that is trending at the moment. Remember Pepsi’s “Black Lives Matter” ad?

Summary

Today’s consumers have endless options and are empowered to change their minds and switch brands faster than ever. Advertisements and sales pitches surround us everywhere we go, and companies like Tesla who are able to break through the noise and genuinely connect with their community have a strategic advantage over those who don’t.

Tesla managed to out-marketed every other auto brand (with a $0 advertising budget) because it realized that marketing is more than just telling and selling. It’s about forming deep, steady relationships with consumers.

At the end of the day, conversions are a by-product of great relationships. Nourishing these relationships takes time. It requires working for a well-defined mission, having a community that’s rooting for your success, and maintaining authentic and transparent communication.

Tesla has done that better than any other car company. That’s why it has the highest customer loyalty of car brands, and that’s why it’s the most valuable car company in US history.