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Tesla: Cult Psychology

Tesla is approaching a playground that previously only Apple played in.

Key points

  • Tesla is the new iPhone, positioning itself in the same way Apple did in the past.
  • Tesla does not run a campaign. It has no ads, PR, or test drives. Therefore, it creates an elite and closed community of customers.
  • While it gets great product reviews, Tesla is mostly an experience.

Tesla is approaching a playground that previously only Apple played in. Take a look at Apple's products. The functionality is no better than competitors' products. Yet the company has managed to brand them as status symbols. Customers are perceived as sophisticated, technological, and elitist. Purchasing an Apple product means belonging to this high-end group.

Apple has created a situation where a person can be assigned desirable character traits, based only on the fact they have a product with the famous Apple symbol. iPhones have now become a popular and even standard commodity.

Tesla is the new iPhone. In this case, the group also includes people who cannot buy a Tesla, but who would sacrifice just so they can ride this vehicle and associate themselves with the features that accompany it.

Building Customer Loyalty Through a Common Enemy

One thing that helped set Apple apart from other computer brands was its ability to create an enemy in the minds of consumers. Renowned psychologist Henri Tajfel discovered that by establishing minor distinctions between two groups of people he could artificially create loyalty within the groups. Apple achieved this by targeting Microsoft as the foe, while also distinguishing Apple products as the anti-PC solution.

Tesla's enemies are vehicles with internal combustion engines and big automakers. Many EV drivers today derive an emotional attachment from driving something that isn't your typical gas-powered car. Another advantage for Tesla is the fact that it offers customers something different: new tech from a new company. This is similar to Apple of days past, which offered a different tech platform than PCs and a small user base which identified with being "different."

The second group of Tesla buyers includes affluent men who want to feel young. The mid-life crisis has become a code name for jokes about men buying a Mercedes with an open roof or looking for a young woman. The Tesla makes it possible to get through the mid-life crisis in style.

The third, and smallest, group is made up of people who fell in love with the story Tesla tells, in the vision of Elon Musk. Tesla has a great story, perhaps the best on the market. A story about investing in sustainability, green energy, and a sustainable future where transportation is electric and energy is renewable.

Joining an Exclusive Club

Tesla's strategy is different from that of other car importers. It produces covetousness through the fact that it does not run a campaign. In addition, it has no PR, no test rides for those interested in purchasing it, and no advertisements. If you wish to buy Tesla, you will have to order the vehicle online. This strategy causes Tesla consumers to actually belong to an exclusive group of people, a kind of closed and elitist community. I recently heard a woman laughing, saying that riding with her husband was a nightmare: Whenever he saw a Tesla passing by, he shouted – here’s another Tesla!

In the age of abundance, where we suffer from information overload, it is much easier to produce desire and interest when a product brands itself as exclusive. This was Gmail's strategy in the beginning when it allowed people to join its mail service only through a friend's invite. Today, Clubhouse has adopted this strategy, which requires an invite from an existing user to use it.

Although you do not need an invitation to buy a Tesla, if you want a test drive, you need to know someone who has a Tesla. All the buzz around Tesla has led to the rapid and spontaneous development of a community addicted to the brand — which includes drivers and fans on social media, Telegram, and WhatsApp — who are interested in expanding the discourse regarding Tesla. They are the best marketers there are.

Reminder: You're Selling Experiences, Not Products

Consumer culture in the West has changed in recent years. It's shifted from the purchase of products and services to the consumption of experiences. This trend will only get stronger after the pandemic. The period of crisis and social distancing led to a reassessment of consumption habits.

An extensive survey by the research firm Global Web Index, in which consumers were asked what they would prefer to purchase in the near future among product categories, found 27% would prefer the purchase of experiences over the purchase of products. Despite the expected global recession, and even though people will purchase fewer material products, there seems to be no harm in the consumption of experiences.

If in the past the functional benefit from the product was the main consideration in the purchase, today the consumption of experiences is a way of life, a way of self-realization and a way of fulfilling fantasies. The restaurant does not sell nutritious food, but a gastronomic experience. Nike does not sell running shoes, but the magic formula to achieve anything you want in life ("Just do it.").

An experience doesn't occur in the physical world; it occurs in the mental world. This is why the value of the experiences is completely detached from the product itself. Our fantasy world has enormous buying power, even though it has very little to do with objective reality.

The rules of competition have changed. Companies that do not understand this will be out of the game forever. Successful companies trade in our experiences, but not only that. The more successful a company is, the smaller the connection between what it provides and the emotional experience it evokes. Although the reviews praise Tesla in terms of instrumentation, ease of use, and performance, Tesla is mostly an experience. The marketers there knew how to sell us a great story.

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