A product that customers love

(~2 minute read)

Now that we’ve established (here) that Tesla isn’t just growing linearly, but actually exponentially, I think the key question to unpack is, “how does Tesla grow so fast? And can they actually sustain that kind of growth?”

I’ve come to realize the answer is VERY FAST and YES and it is because customers love the product SO MUCH that they go out of their way to tell family and friends about it.

Let me explain.

Making a product so good that customers LOVE it

Continuing the example from the last article, during my time as a Product Manager at LoftSmart, I ran a number of experiments to try and help the company find product market fit. My meta-level goal was to figure out how likely college students, who used the service, would recommend it to their friends (ie. fellow college students).

That’s because if they were willing to, it would indicate that we were on the right path to growth. And if not, it would be an opportunity to figure out why.

Unfortunately, most of the time, even though I got feedback that college students liked LoftSmart and got some value from it, I only heard lukewarm responses when I asked, “on a scale of 1-10, how likely are you to recommend LoftSmart to your friends?”.

And as you’d expect, we’d rarely get more than a trickle of referral traffic.

However, along the way, I did uncover one subset of students who not only liked the product, but actually, loved it so much that they went out of their way to tell friends about it!

For context, these were international / study abroad students who faced unique and complex challenges throughout the off-campus application process. So when LoftSmart was able to help them, they went out of their way and organically told friends to try it out too.

Most importantly, anyone who was referred to LoftSmart was significantly more likely to use the service, and to then also tell THEIR friends about it too.

Even with this small inkling of product market fit at LoftSmart, I saw how these kind of loops can create real and sustained growth.

Back to Tesla

Tesla has created a suite of products (and remember, it is much more than just a car company). They have created a loop where more and more customers buy the product(s), use it, love it, and go out of their way to tell their friends and family about it.

This word of mouth is fueling Tesla’s growth. Just look at the high customer satisfaction scores here!

This matters because existing customers are helping Tesla do the heavy lifting. Instead of Tesla having to convince each potential customer to try out their products, new / potential customers are learning about Tesla through their neighbor, co-worker, or family member…in a completely non-salesy way.

You can see this play out when one person on your street gets a Tesla. And then before long, you’ll notice another neighbor gets one too. And then…another. And another…!

Case study: my sister bought a Tesla

My sister, Amy, wasn’t actively looking to buy a car. She was happily driving her Toyota Rav4 that she bought after graduating from university. But after a few conversations together about Tesla, she ordered one too! Mind you, she ordered and took delivery without ever having driven one, or even ridden in one…

And now, predictably, she loves her Tesla too and goes out of her way to recommend it to her friends and co-workers!

How most companies grow

For most companies, a key part of their growth comes from advertising. That means commercials, online ads, billboards, sponsorships, or even paying for the naming rights to a sports stadium.

However, Tesla doesn’t advertise. Yes, you heard that right. Tesla has an annual advertising budget of $0 (source)!

Yet, in spite of not advertising, Tesla is STILL growing like crazy…

Conclusion

It’s very difficult to create a product that customers love. And one that customers love enough to recommend to family and friends.

Tesla has done just that. And they are continuing to do it with new products on the roadmap. And that is why Tesla is growing so fast and sustaining that growth.

Next time

Let’s take a look at how the sausage gets made. Specifically, HOW does Tesla actually create products that customers love? Sneak peek: Tesla products are 10x better.