How Tesla Managed to Alienate Their Most Loyal Customers

[bonnie]

Bonnie. I would prefer not to argue with you, I appreciate your role as a brand ambassador tremendously. Customers have rights but Model X reservation holders have exactly the rights stated on the reservation contract. That right is strictly limited to requesting a full refund up until the point of configuring their vehicle. Period.

I think you may be underestimating how difficult it was to get that Model X (or two?) in your driveway. It is not clear to me from the perspective of operating a business that either the car or the company would exist had they done anything differently. It is very unfortunate that they had to bank on the fact that there was no alternative in the market for Model X reservation holders to choose from but it would have potentially destroyed the business to wash out every step of its laundry in public along the way no matter how much more respected the reservation holders would have felt about that. The business will most definitely overcome the frustration and Model X owners will be delighted. I am sure you agree. It may not have survived having its stock price tanked to $50 mid Model X development and that would have been a much bigger pity for the whole world than enduring the frustration of a handful of millionaires that are more accustomed to being called sir or ma'am every time they drop $5 - $40K.

Taking a more global perspective on this. I truly agree that the value of early adopters has been and still is tremendous. It is however a vital component of 'crossing the chasm' that this business is no longer dependent on appealing to early adopters. This company will have between limited positive to negative impact on getting the world off oil if it fails to treat the mass market as the most important to its success or if it actually fails as a business effectively disproving the viability of EVs. Early adopters feeling special and vital will end and must end somewhere along the road to succeeding in its mission. If no early adopter feels used at some point then they are doing something wrong. As an Apple early adopter, do you think I can get Tim Cook (or could get the late Steve Jobs) to return my calls or give a flying one about what I think about Apple? That is where Tesla ultimately needs to go however sad that may seem.

I don't think I've underestimated one iota how difficult it has been to put an X in my driveway. I have a career of designing, developing, manufacturing, and getting to market some extremely complex software-driven electro mechanical products. And I had money down and watched progress carefully. I've dealt with underperforming or flat out lying vendors. I've dealt with difficult customers and some really great customers. I've told some I'm all out of ... well, fill in the blank (so I get Elon's response to Alsop). I understand difficult design decisions and disappointing customers and delays. And as I've stated, I'm not one of the customers that they've alienated. I've felt like I've had a front row seat witnessing some incredible stuff unfold.

But. Every customer deserves to be treated with respect. Minimizing that misses the issue completely. Respecting your customers takes away nothing from the company mission. Think of it like this: Your customers are some of the puzzle pieces: You need engineers who can design the product. You need to develop vendors you can rely upon. And you need customers who will not only buy your product but act as your sales people for future sales. You can't afford to do without any of those.

Dave is feeling really let down. Do I wish he'd found a different way to express it? Sure. But it sounds like he tried and felt brushed off. And I suspect the breaking point after having been patient and loyal and enthusiastic was he couldn't even get a frickin' first hand look at the X like some brand new reservation holders when the X was in town. I get his frustration. I'm just not out of forgiveness for rookie mistakes yet. And make no mistake, this was not Elon making the mistake, but some kid fresh out of college running the database on who should be invited and the kid dropped the ball. But to all of us, it's 'Tesla' because that's the face we see.

You expect so much of the customers, Julian. Hold the company to the same standard. (Personally, I'm in the space where I cut both some slack. It's pretty comfortable here.)

 

[Julian Cox]

Julian, you can have it both ways. Communication doesn't necessarily entail publicizing exact details.

That is exactly what they did. They said there would be push backs on launch date and they said the end product would be better for it. Both true.

I think until someone has actually sat in the hot seat setting out to challenge two multi $trillion industries (Oil and ICE-auto) and done a better job of it then they should probably reserve judgement.

The last two that tried to challenge just one of these (ICE-auto). One (Tucker) was dragged through fraudulent court hearings by a prosecutor that was later jailed - vindicated but too late to save his business. The other one (Delorean) fell victim to bent FBI agents planting cocaine on him in a hotel room - vindicated too late to save his business too.

For what it's worth, I think Tesla should focus on its customers and would benefit from doing a better job than it does with both PR and IR but to find any example of anyone doing a better job than they are doing in the situation the find themselves in, basically a fight to the death with tremendously evil and tremendously better funded people that have in the past demonstrated a track record of stopping at nothing; finding that example is hard to do because it does not exist.

 

[Zaxxon]

Boy is *that* a revisionist version of events.

 

[Julian Cox]

Bonnie,

I don't think DaveT is a typical customer. I think he is heartbroken that after years of passionate advocacy for Tesla he did not get special treatment or even acceptable treatment. Most customers I expect have simply placed a deposit and waited, contemplated their alternatives, waited, contemplated their alternatives, waited. Some now have their Model X and they are delighted. Some are on record to say it was frustrating but worth the wait. I suspect that will be the typical case.

Forget not that no other company, given two years of opportunity did anything to alleviate that frustration by providing these customers with a better option. That is where the blame belongs. Mercedes? What did you do to satisfy 20-30,000 people waving $100K in the air for an EV-SUV for years? Too busy selling gas guzzlers to care? I think so.

 

[Stretch2727]

In my option the only thing different that Tesla does different than other car companies is an early unveiling and directly taking a refundable deposit very early in the process. Most car companies don't even announce their cars until a few months from launch. The early deposits and unveiling create a huge anticipation of delivery.

Having worked in the past as an automotive engineer in manufacturing I can tell you all automotive companies have these delays and issues. It is just not as visible and they don't have 20-30k people with deposits waiting. The volume ramps are long and slow. There are issues that cause cars to be parked outside the plants waiting for fixes. None of this information is published to customers or investors.

Tesla with only 2 models in its line up needs to be even more careful with this information because of the potential effect on investors and customers.

When we do have issues in manufacturing sometimes the only answer we have on timing is "We don't know". The analogy I would use would be like asking a police detective when a murder case will be solved. It takes time to find the root cause, find a fix and test it. Yes sometimes the fix fails and you go back to step #1.

I think Elon was pretty clear the amount of vehicles produced last year and this quarter could vary wildly based on solving these issues. I think he was right on the earning call to avoid the question completely about exactly how many they are producing now. Cars are incredibly complex and unless you have been involved in the design and manufacturing process of them it is hard to appreciate these complexities.

That said I am putting down a deposit for a model 3 with the assumption the delivery window could be very wide (possibly years.) If I was able to do this for any other manufactures 2018 offering the delivery window would be the same. The communication would be even less as I would not even know about the vehicle until a few months before launch.

 

[bonnie]

Bonnie,

I don't think DaveT is a typical customer. I think he is heartbroken that after years of passionate advocacy for Tesla he did not get special treatment or even acceptable treatment. Most customers I expect have simply placed a deposit and waited, contemplated their alternatives, waited, contemplated their alternatives, waited. Some now have their Model X and they are delighted. Some are on record to say it was frustrating but worth the wait. I suspect that will be the typical case.

Forget not that no other company, given two years of opportunity did anything to alleviate that frustration by providing these customers with a better option. That is where the blame belongs. Mercedes? What did you do to satisfy 20-30,000 people waving $100K in the air for an EV-SUV for years? Too busy selling gas guzzlers to care? I think so.

Well, progress. At least you're now acknowledging the possibility it might not have been acceptable treatment.

As for the rest of your argument, I'll tell you what I told my son growing up: I don't care what the other kids do. Be better than that.

I love the company. I think we've all been witnessing history being made. I see the current problems as growing pains. I know there are many caring people there who are very concerned about communication issues and working on the same. I believe there will continue to be improvements with time. I also believe there will never be a completely satisfied customer base.

And I'll leave it there and move on.

 

[Julian Cox]

Well, progress. At least you're now acknowledging the possibility it might not have been acceptable treatment.

As for the rest of your argument, I'll tell you what I told my son growing up: I don't care what the other kids do. Be better than that.

I love the company. I think we've all been witnessing history being made. I see the current problems as growing pains. I know there are many caring people there who are very concerned about communication issues and working on the same. I believe there will continue to be improvements with time. I also believe there will never be a completely satisfied customer base.

And I'll leave it there and move on.

I have never at any time received any special or acceptable treatment from Tesla. If anyone from Tesla feels like correcting that, I would be only too delighted to receive a PM by return.

 

[bonnie]

I have never at any time received any special or acceptable treatment from Tesla. If anyone from Tesla feels like correcting that, I would be only too delighted to receive a PM by return.

I don't think anyone said you did.

 

[Krugerrand]

Julian, you can have it both ways. Communication doesn't necessarily entail publicizing exact details.

You're absolutely right, except if we're being honest here there is but a handful of people who would have accepted additional communication such as the following without question: "Just dropping you a note to let you know we're pushing back the delivery of the Model X again. Thank you for your patience, we appreciate you."

We'd still have people here complaining that the communication wasn't enough. And every single person here knows that. So while I'm in the camp that more communication along the way would have been appropriate, and would have perhaps satisfied the OP, there isn't a chance in hell it would have stopped the criticism of 'Tesla's communication sucks!'. Julian is absolutely correct that giving reservationists any sort of specific business/supplier/engineering/etc... information would have seen Tesla crucified in the media, but also here - if we're being honest.

Reasonable people not wrapped up in themselves will accept a sincere apology and a note of acknowledgement. Unfortunately, we've got a lot of unreasonable people wrapped up in themselves in this world and they aren't afraid to show themselves off. (If you aren't part of the latter group, then don't get bent out of shape. If you are, then know that sometimes the truth hurts.)

 

[Zaxxon]

I know, right? There's totally no middle ground possible.

 

[The Blue Owl]

You're absolutely right, except if we're being honest here there is but a handful of people who would have accepted additional communication such as the following without question: "Just dropping you a note to let you know we're pushing back the delivery of the Model X again. Thank you for your patience, we appreciate you."

We'd still have people here complaining that the communication wasn't enough. And every single person here knows that. So while I'm in the camp that more communication along the way would have been appropriate, and would have perhaps satisfied the OP, there isn't a chance in hell it would have stopped the criticism of 'Tesla's communication sucks!'. Julian is absolutely correct that giving reservationists any sort of specific business/supplier/engineering/etc... information would have seen Tesla crucified in the media, but also here - if we're being honest.

Agreed.

Reasonable people not wrapped up in themselves will accept a sincere apology and a note of acknowledgement. Unfortunately, we've got a lot of unreasonable people wrapped up in themselves in this world and they aren't afraid to show themselves off.

Also true. At the same time, the sincere apology and note of acknowledgement (which would have separated the professional whiners from the legitimately aggrieved) haven't happened either.

I'm sure they're not unaware of it, though. They'll get better at this.

 

[Krugerrand]

I know, right? There's totally no middle ground possible.

For some people, no. Evidence of that is all over this forum.

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At the same time, the sincere apology and note of acknowledgement (which would have separated the professional whiners from the legitimately aggrieved) haven't happened either.

You're right, didn't happen. And since it's a past event now, won't happen since that would be construed as hollow. So rehashing the chain of events serves what purpose? It's not like Tesla doesn't know what happened.

 

[Zaxxon]

Krugerrand, clearly Tesla can't satisfy everyone. That doesn't mean they can't or shouldn't try to do better. I can't speak for Dave or others, but that's all I'm pushing them to do.

 

[Zaxxon]

As far as Tesla not knowing what happened, I've seen no evidence that communication is improving in my 3+ years following the company. So I'd argue it's not clear that they're aware without folks speaking up.

 

[Krugerrand]

Krugerrand, clearly Tesla can't satisfy everyone. That doesn't mean they can't or shouldn't try to do better. I can't speak for Dave or others, but that's all I'm pushing them to do.

Are you suggesting that they aren't trying to do better?

 

[Zaxxon]

I'm suggesting that it's not clear from the outside.

 

[AlMc]

Are you suggesting that they aren't trying to do better?

I have not seen improvement. I admit I may have missed something. Do you have information that suggests they have implemented a plan of action to improve communication? It would be good if you could share that..Thanks.

 

[ecarfan]

I have never at any time received any special or acceptable treatment from Tesla. If anyone from Tesla feels like correcting that, I would be only too delighted to receive a PM by return.

Who said you received special treatment from Tesla?

 

[Julian Cox]

Allow me to explain a harsh truism.

Musk is a nice guy, but. First and foremost he's a lethal strategist worth every penny of his $billions in net worth. If you are a competitor and you don't like it very much, what in the hell are you supposed to do about it?

Same goes for a disgruntled customer. What are you going to do? Storm off and take your business elsewhere? Where exactly? Check out Alsop sobbing about the fact he's stuck with a BMW he cannot stand.

Then you might say, well one day when there is a choice of competing products I'll definitely not stand for it and I'll definitely exercise my negotiating power as a consumer to storm off elsewhere.

Well guess what. When that day comes there won't be anything to storm off about. Check Mate Musk, Again.

Background. Tech adoption has distinct phases where different things matter to competitive dynamics. Phase 1 is all about product features and performance. Features and performance that simply cannot be obtained from competing sources. It is a much later phase in tech adoption where all competitors are offering similar performance and features and the key metrics of competition have moved on to service, convenience and finally full commotdiization - i.e. pure price competition for something that can be purchased equally conveniently with practically the same features and performance from anywhere. The latter is the state of the ICE auto industry, Phase 1 is where Tesla is at right now. The fact that they are nice too nine times out of ten is icing on the cake, not to be confused with customer leverage forcing them to be nice at all times or else. That leverage does not exist and anyone (like Alsop) that mistakenly imagines Tesla owes him the world for $100K is in for a rude awakening (as Alsop discovered to his cost and to the benefit of resevation holder 30,000 that just moved up to position 29,999).

- - - Updated - - -

Who said you received special treatment from Tesla?

Nobody. I am just pointing out that I haven't. Like DaveT I have also been keen to defend the philosophical goals of this business on my own time and dollar. I have not received any thanks for it either. That said I did not feel that I was entitled to be thanked for it. I am actually very grateful that they are out there trying their hearts out to do something that I think is absolutely imperative that it gets done.

 

[Lump]

I have never at any time received any special or acceptable treatment from Tesla. If anyone from Tesla feels like correcting that, I would be only too delighted to receive a PM by return.

Tesla doesn't have to communicate with you or give you special treatment, do you own a Tesla, have you made a deposit for an X or just simply a Tesla defender on TMC?