The differences that Tesla represents to the auto market fascinate me. The firm is run more like a cutting-edge Apple than a typical car company such as Jaguar and, in fact, exceeds Apple in the application of advanced technologies such as analytics. This is largely how Tesla has succeeded where most new car companies, including Fisker, have failed.
Tesla's customer care exceeds what every other car company provides, which more than overcomes the near-impossibility of living off a single car design and an electric platform that lags far behind the gas-based system currently in place. Tesla is the best example of what applied analytics can do with respect to competitiveness. Without it, Tesla likely would have failed.A A
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If a gas car company such as Jaguar applied this same level of technology and customer focus, it could take massive market share and significantly reduce customer acquisition and customer churn costs.A A
Above All, Tesla Drivers Are Happy
I focus on these two companies because, a little over a year ago, I narrowed my choice of cars to a Tesla Model-S P85 and a Jaguar F-Type V8S roadster. This may seem unusual, but no other cars attracted my interest as much as these two very different models did. I wanted something that would be fun to drive, fast and a showcase of technology and design. (I chose the Jaguar because it was more fun and because of the lack of electric infrastructure, but I believe the choice would have gone differently if Tesla had a sports car option and a bit more range.)
Looking back over the last year, one thing stands out. Even though Tesla has had problems more so than the Jaguar, the Tesla customer is far happier. (Tesla customers are younger and richer, too.) While most Tesla car owners are likely to buy another Tesla, many Jaguar buyers, even those I've spoken with who have been with the brand for decades, won't be coming back after their F-Type experience. One forum member says succinctly that Jaguar treats customers like an annoyance.
In talking to customers of both firms, though, the real difference, which has made Tesla a success, isn't the car. It's the analytics Tesla wraps the car behind, which leads to a far better customer experience.
Applied Analytics Makes Tesla Different
Unlike any other car company, Tesla fully instruments its cars by default, connecting them wirelessly to their corporate offices for analysis. EMC uses analytics aggressively as well. In both cases, the result is a far higher customer satisfaction score and better targeting of resources to customer satisfaction. This not only connects Tesla to the customer; it helps Tesla better anticipate and correct problems before they damage the firm.A A
Far from being an annoyance, customers are a critical part of Tesla's decision-making process. In addition, with no dealer network, Tesla interacts with customers directly and not through proxy. (In Jaguar's case, most of the complaints I see aren't being sourced at the dealer but at the Jaguar corporate office, which, in North America at least, appears poorly run.) Since the Jaguar F-Type is a highly marketed halo car designed to change people's minds about Jaguar for the better, the fact that so many loyal Jaguar customers are now expressing disloyalty suggests that Jaguar management is either incompetent or uninformed. (I'd guess the latter.)A A
Tesla's use of sensor data, customer contact and analytics appears to scale even better than Apple's. Loyalty at Apple appears to be dropping as the company's human ambassadors, its Genus Bar employees, cycle to other jobs and are replaced by folks who are increasingly less passionate about Apple's ever-more-common products and less tolerant of hearing the same stupid questions over and over again. Machines actually like the same question over and over again and deal with them better than people do.
What really showcases the benefits of applied analytics at Tesla is that the company exists at all. The electric charging infrastructure is pathetic compared to gas, the fully loaded car exceeds $100,000 and it represents a massive risk to anyone who buys it. Rather than go under, though, Tesla has grown faster than the rest of the market, its customer loyalty is far higher, and its car has been rated the best in the world ahead of cars and firms that have been in the car business for more than a century.
Tesla itself runs the most active forums on its own car, which gives it a running sense of what excites and annoys customers and, in turn, gives Tesla a massive advantage over firms that don't host or monitor forums on their cars. I frankly wonder if most auto firms have discovered the Internet.
This suggests that a traditional car company such as Jaguar that adopted and integrated key Tesla practices could become the most successful car company in the world; it wouldn't have to overcome the massive drag that being the only electric car company at scale is to Tesla. Put a different way: This is like watching a bunch of professional hill-climbing experts get passed in an uphill race by an amateur who also happens to be pushing a boulder. You can't help but wonder how fast he'd be if he wasn't pushing the damned boulder.
Data Analytics Is Useless If It Isn't Actionable (and Actually Used)
Analytics can make a massive difference. To assure the customer experience, though, executives must be behind the effort and use the data. Otherwise, the analytics are a waste of money.
Two things differentiate Tesla from Jaguar in terms of customer care: Tesla captures more real-time information about its customers, and it does more with that information at an executive level. Critically, these things must work together. If Jaguar captured the data but still treated it as a waste of time and not a strategic advantage, then the time and money spent capturing and analyzing the data would be worthless and, in the case of a class action law suit, represent a liability and not an asset, as that data would then be used against the firm.
Data analytics that's timely, actionable and accurate is an asset that foolish executives can turn it into a liability. Next time you talk to a Tesla driver, don't ask about the car, ask about the customer experience. You'll be amazed. Wouldn't it be great if your customers felt the same way about your company and products?
One final thought. If you're building something as revolutionary as the Tesla electric car, good product and customer analytics may be the only real insurance against failure. You're pushing a boulder uphill and this technology is the equivalent of a rocket booster.
I can think of no better way to showcase the real power of applied analytics to a company. Makes you wonder who supplied Tesla with its data analytics solution, doesn't it?
This story, "Why Analytics Makes Tesla Better Than Jaguar" was originally published by CIO.