At the end of July, Tesla Motors [NASDAQ:TSLA] announced a new and unique approach to increasing the sales figures of its luxury Model S electric car: an owner referral program which rewarded existing owners with $1,000 of Tesla credit for every person who purchased a Model S as a consequence of their referral.
When it was originally announced, Tesla said Model S owners who managed to make a total of ten successful referrals would earn the right to purchase a fully loaded Founder Series Tesla Model X SUV for the same price as an entry-level Model X. What’s more, Tesla promised the first person in each key market of North America, Asia and Europe to reach that goal would be given a brand-new, fully-loaded Model X for free.
Save for a slight change to the program in order to comply with auto dealer laws in the Commonwealth of Virginia and the state of Ohio, Tesla’s original referral program has proven incredibly popular, chalking up plenty of potential customers in short order.
So popular in fact that Tesla is now removing its 10-referral limit in an attempt to push new customer referrals even further, as well as introducing a new top prize for the one person who makes the most successful referrals worldwide by the end of next month: a fully-loaded Tesla Model S P90D.
The announcement, made quietly in a letter to Tesla Model S owners by Tesla CEO Elon Musk and posted to Reddit last week, was simple and to the point. It read as follows:
September 2, 2015
As you know, the Model S referral program was designed as an experiment, and so far it seems to be working. So, we’ve decided to remove the 10-referral limit. From now until the end of the program, you can refer as many friends as you’d like. Your link will continue to work until October 31st. What’s more, we’ve added an additional reward: the customer who makes the most referrals by the end of October will be invited to swap their current Model S for a fully loaded Ludicrous P90D Model S, for free. All other terms of the program remain unchanged.
At the time of writing, only a handful of Tesla Model S owners have exceeded the original 10-car referral limit set by Tesla, with the majority of referral program participants still yet to make more than one or two referrals under the scheme.
Of late, the Tesla Referral program has got kinda competitive, with some existing Tesla Model S owners becoming rather shameless on social media about their attempts to win a new Tesla. Some owners are even offering cash incentives to would-be customers who sign up to buy a new car, with $1,000 up front and $1,000 later on.
Understandably, this has led to some serious criticism of Tesla’s referral program, with some commentators calling the competition ‘ugly’ and questioning the motives of some existing owners.
Others feel that the program simply cheapens the brand.
Tesla’s own terms and conditions about the program do warn owners against “acting contrary to the intent” of its referral program, but doesn’t specifically prohibit cash bonuses or perks for those who encourage others to buy a Model S.
Here at Transport Evolved, we can see the benefits of customer-referrals but we’re also cautious about those we feel may be trying to game the system. As countless drive events over the years have shown, there’s nothing like the first-hand experience of an existing plug-in owner to encourage others to make the switch from an internal combustion engine vehicle to an electric one.
Yet we also feel that those referrals should be restricted a little more, encouraging only real-world referrals — such as those to friends and family — than online referrals made between two people who barely know each other. Trying to police such a policy however would be almost impossible, which does explain why Tesla’s program doesn’t make such a distinction.
Are you happy about Tesla’s referral program? Do you think it’s a clever marketing tactic, or are just a handful of privileged owners taking advantage of it?
Leave your thoughts in the Comments below.
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