Would you be prepared to help a car company sell its latest new model to your friends – in return for a £1000 discount for your friend and another £1000 reward for you, after every successful sale?
It’s a question Tesla is posing, after the American maker of electric cars introduced a new sales incentive scheme that it hopes will prove more effective than traditional online advertising and digital marketing.
The innovative tactic suggests that the pioneering company believes nothing beats the power of word of mouth. And it brings to mind the saying, “If you like it, tell your friends. And if you don’t, tell us.”
The scheme is designed to encourage existing British Tesla Model S owners to get their friends to buy a new Model S. In return, each party gets a £1,000 discount and £1,000 credit respectively.
It doesn’t end there, though. The more friends an owner refers to Tesla, the more discounts and credits they get, up to a limit of £10,000. And the first owner in Europe to refer 10 friends – who must go on to buy a Tesla – will be given a new Tesla Model X, an electrically-powered family SUV that is available to order now.
However, in the grand scheme of things, the discount is far from generous when weighed up against the car’s cost. The most affordable Model S, the 70D, costs from £55,380. What’s more, existing owners only have until the end of October to convince friends, family and colleagues to take part in the referral offer.
Tesla is run by Elon Musk, the multimillionaire techpreneur who was a founder of PayPal, the online payment company. Musk says that the decision is influenced by the past performance of similar sales incentives at PayPal, and believes that if successful, it could save the company from the expense of opening more showrooms.
Tesla is one of the few car companies to exclusively own its dealerships. It follows the model used by Apple, with glossy-looking stores situated in prime high street locations. Traditionally, the car makers franchise out their sales stores to independent groups, and these favour industrial locations where car parking and floor space is prioritised over footfall and catching receptive consumers as they’re shopping.
The sales incentive is a 90 day trial and only applies to new Teslas. However, Elon Musk said that if it proves successful, not only could the incentive become a permanent sales tactic used by Tesla, but it could also be extended to used car sales.
Whether or not the incentive works remains to be seen. However, the rest of the British car industry are likely to watch closely to see if the approach can win over conservative Brits who don’t like to bother friends at the best of times, let alone when trying to sell them a car. Most prefer to use sites like Carwow, Autoebid or Drivethedeal to secure substantial savings on new cars for themselves, without needing to trouble friends and family.