Unraveling the Reality: Has Tesla's Focus on Range Overshadowed Customer Satisfaction?

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The advertised range of a Tesla Model S is 373 miles, but a recent investigation by Reuters reveals that the actual range achieved by the car is often lower than what the brochure claims.

The company's CEO, Elon Musk, who you may be familiar with, previously instructed his team to display optimistic range projections in all of Tesla's marketing materials. According to a source from Reuters, "Elon wanted to showcase impressive range numbers when the vehicles were fully charged. Seeing a range of 350 or 400 miles on a car right off the lot creates a positive impression."

However, when subjected to objective testing or driven in more typical conditions, Tesla's vehicles consistently fall short. US authorities requested that Tesla reduce its stated range by 3%. In South Korea, authorities discovered that the actual range was 26% lower than what was promised, resulting in fines for the company. Independent testing conducted by SAE also revealed shortcomings in Tesla's range claims.

Every week, thousands of drivers purchase new Teslas, often influenced by the stated range of their new vehicle.

As per the Reuters article, the problem lies with Tesla and their two-step method for estimating range. When fully charged, the cars typically display a higher mileage on the dashboard meters than what can actually be achieved, as they fail to account for power drain caused by cold temperatures or variations in driving behavior. However, once the battery level drops below 50%, these projections become more accurate to prevent drivers from being stranded due to incorrect range estimates and a suddenly depleted battery.

The moment of truth

Tesla's flexible approach to range estimation should be emphasized as a legal practice. However, the focus of this column is not on the legality but rather on the following developments that will undoubtedly astound marketers and serve as the foundation for the extensive discussion that ensues in the next twelve hundred words.

Many drivers have this belief.

Tesla, in the past four years, has successfully sold over 3 million cars. Considering the sheer magnitude of this number, coupled with the added warranty period of four years, addressing customer service challenges becomes paramount. Countless Tesla owners have been contacting their dealers to report battery-related issues and promptly scheduling check-ups for their vehicles.

Now is the time. This is what some service experts refer to as the "moment of truth." It is a critical situation where a well-managed company must confront customer concerns head-on. Ideally, the company should attentively listen to the problem at hand, understand it, diagnose its root causes, and align their actions with the company's brand values and product positioning. By doing so, they can address the issue efficiently and gracefully, leaving the customer even more impressed with the company's resolution process - not in spite of the problem, but rather because of it.

Yes, indeed, such situations do occur. Interestingly, Musk and Tesla provide a perfect example of how to successfully resolve such issues. In 2016, Loic Le Meur became increasingly frustrated with fellow Tesla owners who would leave their fully charged cars connected to the supercharger slot. To address this, he sent Musk a direct tweet expressing his concerns. Surprisingly, within a matter of hours, Musk responded and reportedly adjusted the charging algorithm to penalize owners who kept their fully charged cars connected to the charger beyond a certain point.

I agree, this is becoming a problem. Supercharger spots are intended for charging purposes, not for parking. I will take action.

It was a swift, efficient, and cutting-edge embodiment of Tesla's signature style. The overarching goal was to enhance the quality of life for the company's valued customers. As an owner of either a Ford or a Jeep, you couldn't help but observe the entire journey with a compelling blend of admiration, motivation, and envy.

Project ‘Diversion’

But that was seven years and millions of cars ago. Today, the Tesla and its CEO, Musk, have undergone significant changes. Moreover, it seems that Tesla has chosen an entirely new approach to address the concerns of its current customers regarding their car's range.

According to Reuters, the company established a specialized team known as the "diversion team". Their primary responsibility was to intercept and redirect up to two thousand users per week who requested car inspections for range issues, ensuring that as many as possible were discouraged from seeking service and instead encouraged towards inaction.

Initially, Tesla trained the diversion team to remotely assess a user's car and then personally call them to inform that their vehicle was functioning well and did not require any servicing. Alternatively, they would contact the user to clarify that range estimates were mere predictions and not actual performance capabilities, reassuring them that there was nothing to be concerned about. Another explanation provided was that Tesla batteries naturally degrade over time, resulting in less accurate range estimates.

The diversion team intensified their efforts. According to a source close to the company, even if a remote check revealed problems with a car, no action was taken. After all, their objective was diversion, not maintenance. Eventually, the diversion team completely ceased conducting remote tests.

According to an individual familiar with the situation, "Advisors who had never performed diagnostics assured thousands of customers that their car had no issues." Allegedly, Tesla also modified its app to prevent customers who complained about their car's range from scheduling a service appointment.

A culture of market orientation

During a significant portion of the initial century of marketing knowledge generation, the field primarily focused on theoretical exploration and was preoccupied with establishing its own scientific standing. However, it wasn't until the late 1980s that a select group of American academics successfully implemented the marketing concept. This productive phase of investigation witnessed the emergence of two distinct definitions of market orientation, which although not entirely compatible, competed with each other.

Professors Ajay Kohli and Bernard Jaworski developed an operational perspective, defining market orientation as the combination of market intelligence, dissemination of the intelligence across departments, and organizational responsiveness to it. Their view focused on different tasks within the firm that contribute to market orientation.

On the other hand, Professors Stanley Slater and John Narver took a cultural perspective, which eventually became the predominant viewpoint in the field. For Narver and Slater, market orientation revolved around the cultural foundations of the company. It explored the company's purpose in business, its ability to learn from customers, and its capacity for improvement and adaptation.

Market orientation requires a fundamental appreciation for the individuals who financially support all aspects of a business.

Instead of initially focusing on a predetermined set of organizational actions, the professors viewed market orientation as primarily an aspect of a company's self-image and its understanding of its industry. From this standpoint, customers were not merely a secondary component in the process of developing high-quality products or a means to generate significant corporate revenues in the long run. Rather, they were the very purpose for a company's existence and the foundation for its future expansion and achievement. Market-oriented companies recognized this and cultivated a corporate culture that echoed this understanding.

And from a cultural perspective, these revelations about Tesla should be analyzed. If the claims are proven true, it indicates that the company not only distorts the truth about its product's performance, but also employs a large team of executives to obscure the resulting issues. This reveals transparency and ethics concerns. However, it also raises more troubling questions about the inherent nature of Tesla and its focus on the market.

When a company goes to such great lengths to deceive its customers, it signifies a deeply flawed culture at its core. A market-oriented business should have a certain level of respect for the individuals who financially support it. When a company, especially its leadership, displays such blatant disrespect and dishonesty, it is evident that problems lie ahead.

Who is Elon Musk?

Market orientation is not crucial for achieving corporate success. One can achieve strategic success by offering a remarkable product, providing low prices, or even using exceptional advertising techniques. However, in the long run, companies that prioritize being market-oriented and culturally aligned with their customers tend to be more successful. These companies consistently launch superior products, offer excellent service, and ultimately experience faster growth compared to those that do not prioritize cultivating a customer-centric culture. As the renowned Jeff Bezos once stated, companies that are obsessed with their customers have a greater propensity for success.

Where did the Elon Musk of 2016, who actively listened to customers on social media and continuously strived to improve, go? What happened to the marketing idol who significantly enhanced Tesla's operations? How did he transform into a cynical individual devoid of customer respect, allegedly orchestrating a group of executives to hinder proper customer service?

And what implications does this hold for Tesla? As the saying goes, the fish rots from the head down, and I have witnessed this phenomenon in marketing too many times to dismiss it. When a company appoints a leader who prioritizes market orientation and genuinely embodies customer focus, the culture evolves accordingly. However, when the same company is led by someone solely motivated by profit margins and meeting product deadlines, customers are sidelined, or worse, regarded as a nuisance.

Now is an opportune moment for them to reassess their approach.