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How Tesla Managed to Alienate Their Most Loyal Customers

Discussion in 'TSLA Investor Discussions' started by DaveT, Feb 18, 2016.

  1. DaveT

    DaveT Searcher of green pastures

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    #1 DaveT, Feb 18, 2016
    Last edited: Feb 18, 2016
    1. Take big deposits for a car you haven’t released.

    2. Delay the car once. Delay the car again.

    3. Hardly communicate with the customers who put down deposits. Make it company policy to tell customers, “we don’t know”.

    4. Keep changing things last minute which you know will cause delays but then tell everyone it’s not going to be delayed.

    5. Hold a big event to launch the car when the car isn’t ready to go into production yet, just so you can say you met the launch deadline. Ironically, start the event ridiculously late and don’t apologize for it. Instead, leave people standing and waiting around for hours. And then have a ridiculously small amount of cars available for test rides so that most people have to wait for hours and don’t get a ride after the event.

    6. If people complain, brush them off. Or just cancel their reservation.

    7. Always have lots of excuses.

    Then wonder why your stock price has been hammered.

    Now this is coming from one of Tesla’s biggest fans (me!), but I’ve got to tell it like it is. Tesla has really botched the Model X reservation and rollout process. I think the main problem is their lack of transparency throughout the process and their lack of high-touch communication with reservation holders. The more delayed the Model X is, the more Tesla needs to communicate with reservation holders and the communication needs to be increasingly “high-touch” (ie., not just a form mass email). I think Tesla doesn’t get this. It feels like Tesla thinks Model X reservation holders are so naively fanatical about Tesla that they’re willing to wait forever without complaining.

    What really scares me is how it appears Tesla hasn’t learned their lesson. I can see Model 3 play out very similarly. Tesla makes a ton of promises and then takes a ton of reservations. Then, throughout the process they do a utterly dismal job of communicating. And then they delay the car and hide all problems with excuses. When people complain, they brush them off.

    I can see people making a reservation for base model Model 3 expecting the car by the end of 2017. But chances are Tesla might barely squeak by several Founders cars by the end of 2017. And it’s likely there won’t be any significant quantities of Model 3 produced until Q2 of 2018 (my guess as they’ll probably face production difficulties). Then, if you’re located on the East Coast if you ordered a base model (w/few options), then you might be getting your car in the first half of 2019. The question is how will Tesla navigate this and how will they communicate with this kind of buyer. If they follow what they did with the Model X, they’ll alienate tens of thousands of more people.

    Here’s how Tesla can correct the ship. First some overall guiding principles:
    1. Be transparent.
    2. Make the reservation waiting process the best ever.
    3. Don’t over-promise on features or dates.

    And here are more specific suggestions.
    1. I think Tesla should be ultra-transparent and share specifics on how many cars they plan to produce and when, and when people (based on their location and model reserved) can expect to receive the car. For example, Tesla can say that they’re going to deliver several Founder cars by end of 2017. 2018 will be roughly 50k cars but with slow ramp in Q1 (i.e, 2000 cars in Q1). People who live in West Coast and who’ve ordered highly optioned cars will be prioritized. If you live in East Coast and have ordered base model, then expect in in first half of 2019.
    2. If the rollout plan changes, then Tesla should be honest and upfront with the challenges they’re facing and the reasons for delay. They shouldn’t hide the problems.
    3. Tesla ought to be in continual communication with Model 3 reservation holders and should be more open on the development of Model 3.
    4. If Model 3 is delayed where the rollout needs to be pushed out further than what was originally planned, then there ought to be consequences within Tesla (ie., heads should roll if Model 3 rollout is delayed by more than few months).

    Overall, what Tesla needs to get is that the reservation waiting period is part of the “product” they’re offering. It’s not just the car itself, but it’s the entire experience that’s important. If you deliver a great car but the experience of waiting and buying the car is terrible then you’re still going to piss off a lot of people.

    Lastly, I love Elon but I hope he changes his mind on Alsop. Alsop clearly crossed the line with some of the language in his blog posts, but the overall backdrop is Tesla’s botched Model X rollout and the frustration and angst that thousands of their best customers have been feeling. I hope Tesla can get in touch with that. In a way, Alsop is just vocalizing his own frustrations (in his imperfect and albeit attacking ways) but it’s not something isolated; rather, it’s something very prevalent and largely Tesla’s responsibility. You can’t take a large deposit, promise a product by a certain date, yet hardly communicate and deliver exceedingly late beyond anyone’s expectations without making a lot of people very upset. I hope Elon will reinstate Alsop’s Model X reservation and make a tweet saying that he’s done so.

    As a shareholder, Model S owner, Model X reservation holder, and one of Tesla’s biggest fans, I sincerely hope that Tesla realizes how bad they screwed up the Model X rollout and I hope they don’t screw up Model 3 in the same way.

    - - - Updated - - -

    Part 2:

    Here’s what I think happened behind the scenes. Obviously Tesla didn’t intentionally try to alienate their best customers. But it was a result of a different intention. I think Tesla was scared to cannibalize Model S sales, so they tried to keep quiet on the Model X and all the new features it had. I also think they intentionally tried to keep quiet on the Model X throughout it’s development as to not divert focus and attention from their current product, the Model S. They didn’t want people to not buy the Model S because the Model X might be so much better. Also, with the Model X people might realize that the Model S would get a refresh/upgrade with some of the new features of the Model X and that might discourage some people from purchasing the Model S now.

    I think the result of Tesla keeping quiet on the Model X is that they put communication with Model X reservation holders as very low. In other words, they didn’t have a team focused on making the Model X reservation experience awesome. Rather, it was just a job to send mass form emails once in a while but their goals/expectations were very low on the type of experience they wanted to give to reservation holders.

    Tesla is also a company where lots of things are going on. They’ve got lots of products (Model S, Model X, Gigafactory, Superchargers, Tesla Energy, etc). So, unless something is prioritized then it can get overlooked. I think communication with Model X reservation holders wasn’t prioritized, and thus it got overlooked.

    The Model S was a different story/experience. Tesla didn’t have a product to cannibalize (Roadster was already done/finished) so they were able to be more transparent in the development of the Model S. They showed off the car and it’s features and were fairly transparent with the overall development and production process. This is in stark contrast to the tight-lipped approach of the Model X that even rivaled the tight-lipped approach of Apple with their new products.

    Overall, I think it was a big mistake. Actually, let me rephrase that. I think it became a big mistake because of the delays they faced with Model X. If they didn’t face any delayed and rolled out production quickly then I think their plan (of keeping quiet during the Model X development time) would have been okay. However, with each delay Tesla really ought to have taken more action to communicate and include it’s customers. But instead of doing that, they decided to remain quiet. This only served to isolate and alienate their own customers. When Tesla started to face delays I think they should have tossed out their “keep quiet” plan with the Model X, and they should have resorted to a super high-touch and super transparent communication approach. They should have know the delays would test their relationships with their customers and that they could/should/would need to keep ties with their customers through an increased priority in communication. However, by sticking with their original plan to keep quiet and not adjusting because of the delays, the end result was they alienated a lot of their biggest fans/customers.

    So, the title of my post really ought to be “Tesla's Model X Master Plan that Alienated Their Most Loyal Customers”. In other words it wasn’t their intent to alienate but rather a result.

    Update: Changed the title from "
    Tesla’s master plan to alienate their most loyal customers" to "How Tesla Managed to Alienate Their Most Loyal Customers".
     
  2. Mark Z

    Mark Z Active Member

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  3. strider

    strider Active Member

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    #3 strider, Feb 18, 2016
    Last edited: Feb 18, 2016
    What you wrote has applied to every car Tesla has released and I don't see it changing any time soon.

    Bottom line is that Tesla currently has zero competition. They can screw up repeatedly and what choice do you have? It's like an ICE where a BMW, Audi, and MB are essentially indistinguishable from a price/performance standpoint and you can cross-shop and go with the one that treat you the best.

    Someday I hope Tesla does have competition. At that point these things will be fixed or they'll go bankrupt.
     
  4. CTemp222

    CTemp222 Member

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    OP be spittin' straight fire! :eek:
     
  5. Canuck

    Canuck Active Member

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  6. DaveT

    DaveT Searcher of green pastures

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    Yes, I've listened to the earnings call. It highlights a few things for me. First, Elon cares more to communicate with analysts than he does care to communicate with Model X reservation holders. Why isn't he telling Model X reservation holders directly what's the reasons for the delays? Also, some of the reasons for current delays (chrome finish, seals, etc) just highlight how Tesla procrastinated too much with the Model X. They should have figured out all these issues two years ago.
     
  7. LargeHamCollider

    LargeHamCollider Battery cells != scalable

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    I've greatly enjoyed DaveT's posts and weekly newsletters but this post's title is unnecessarily provocative and the tone is unnecessarily confrontational... Dave is pissed:mad:, perhaps rightly so.
     
  8. DaveT

    DaveT Searcher of green pastures

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    The reason why I posted in the investor section is because Tesla's ability to execute and hold the loyalty of their best customers impacts Tesla's projected growth and people's investment thesis in TSLA.

    I agree on the lack of competition right now. I just hope Tesla's able to fix some of these things before credible competition appears because it's possible it could be too late then.

    - - - Updated - - -

    I'm only saying that Tesla's lack of ability to execute with the Model X is one of the reasons for the hit in stock price, not the only one.

    - - - Updated - - -

    Yeah, I'm frustrated. I've brought up these concerns with several Tesla employees/managers and I've always been brushed off.

    - - - Updated - - -

    Quant, just a pointer. Focus on the content and not on personal attacks. It's a lot more productive for everyone. Also, please read my past megaposts on Tesla and you'll see the potential I see in Tesla. I'm only sharing this post because I'm a believer in Tesla and that they can do better.
     
  9. green1

    green1 Active Member

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    This is exactly it. I love my Model S, but Tesla has many things I can't stand. If they had actual competition right now, it is highly unlikely I would have gone with them. Once that competition arrives I feel they will either have to shape up, or face some very hard times. And I believe they WILL have competition, the only real question is when.
     
  10. ecarfan

    ecarfan Well-Known Member

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    Dave, I am sorry you feel the way you do. I do not agree with your level of criticism of Tesla though certainly Tesla can do better, as can every business enterprise. I remain long TSLA, confident about a bright future for the company, and very happy with my cars. I think it will be many years before the competition catches up, maybe decades. I think Tesla is well on its way to achieving its mission statement, and I think Tesla Energy is going to double Tesla's revenue within 10 years.
     
  11. Mark Z

    Mark Z Active Member

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    The buyers have invested in the car. The investor's earnings call answers some of the questions. I'll listen to the answers anyway I can get them.

    In regard to figuring it all out in advance, I'd like to get my Toto toilets to flush properly without holding the handle down. That takes time, testing and trying different parts and configurations. My Model X will most likely get foldable rear seats before I find a revised flapper that works perfectly!
     
  12. Canuck

    Canuck Active Member

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    I think a lot people invested in the stock market are pissed right now. Maybe that also contributed to his concerns? I know it bothers me every time I think about it, to the point where I've stop looking daily and tell myself I'm in it for the long run. The only upside for us Canucks, is a lot of us bought when our dollar was at par, so our gains haven't shrunk as much, or our losses are less.
     
  13. DaveT

    DaveT Searcher of green pastures

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    Actually, I ought to clarify as my post doesn't express my overall feelings/thoughts for Tesla. I love my Model S. I'm very long TSLA. I think the Model X will be a hit. I think Tesla Energy will be a big success. I'm a big believer in the potential that Tesla has. I think they do have a lot of great people working there.

    But recently I think Tesla has made some mistakes, and a major one has been how they rolled out the X.
     
  14. CHG-ON

    CHG-ON Still in love after all these miles

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    I have had NONE of your experiences.

    None. Everything has been flawless, including free pickup and delivery even after they changed their policy. I simply could not be happier and I am one F***ing picky person. And I do mean picky.

    Tesla has provided me the absolute best buying and service experience I have ever had.

    Period.
     
  15. DaveT

    DaveT Searcher of green pastures

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    Most Model X reservation holders aren't going to be as proactive as you (ie., listening to earnings calls for answers), and they shouldn't have to be. There really is a ton of things Tesla could have done to communicate better with reservation holders. Elon couldn't have made blog posts explaining the delays in detail. They could have had a Model X reservation holders conference call to field questions. They could have held test drives earlier and had more of them. They could have given calls to each reservation holder. They could have sent out physical letters/brochures. They could have sent out a token of appreciation (ie., keychain or something) and apologize for delays. My point is that if communicating with Model X reservation holders was a priority for Tesla then they would have done a much better job than they did.

    - - - Updated - - -

    I've actually had these concerns for quite a while (ie., past year), and I've been very careful/cautious about sharing them publicly. But I reached the point recently where I think it's better to have it out in the open and to have a discussion about it. Maybe I'm off. Maybe I'm not.

    - - - Updated - - -

    Do you have a Model X?
     
  16. MikeL

    MikeL some guy

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    And to think I was going to be the first reply an hour ago - I'm with DaveT on this one. I didn't read anything provocative or unduly harsh or untrue into his assessment. That, and I have known for years now he's die hard pro-Tesla all the way, right? During those exact same years, the introduction/release date of the car I ordered has been blithely pushed and pushed from September to January to "Spring" to July to "late 201x" to "Spring" again to November to "Early 201x+1" to on and on. Now it's mid Feb and there are a few hundred, maybe not a thousand (?) of them out among us when they "should be" cranking out that many per week. There is some issue and we don't know what it is. That is Dave's point with which I agree. All of this has occurred with very nearly ZERO information/communication from them to us (me). The Xmas card, and the two emails in 3 years were very nice. To say the situation, especially of late, is trying my patience would be ... True:rolleyes: - from your fellow die hard TM fan, ML
     
  17. Chris TX

    Chris TX Active Member

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    Careful now. Elon might be calling you to end the relationship. ;)
     
  18. bonnie

    bonnie Oil is for sissies.

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    Oh pffffyt. Stop that. :) Plenty of criticism over the years and that hasn't happened. It was the sanctimonious finger waggling and whatever else happened on that phone call.
     
  19. DaveT

    DaveT Searcher of green pastures

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    #19 DaveT, Feb 18, 2016
    Last edited: Feb 18, 2016
    Tesla’s master plan to alienate their most loyal customers

    Mike, you said it better than me. Delay upon delay + utter lack of communication = lots of frustrated folks.

    I'm still a die-hard Tesla fan. It's just that this whole process has been trying and I don't want people to go through it again with Model 3.
     
  20. DaveT

    DaveT Searcher of green pastures

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    The Alsop incident deeply troubled me. I don't think Elon should have cancelled his order. I don't want to defend Alsop because I think his blog post crossed the line and I don't know what happened in the phone, but in some ways he represented a group of frustrated X reservation holders (however large or small they might be). And Elon cancelling his reservation comes across as Elon being clueless as to the frustration many X reservation holders are feeling.
     

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