Of Tesla, Toyota, and Taylor Swift
Chapter Three: Principle 2—To Be Compelling Requires a Strategic Point of View
Dear Friends,
I am having so much fun writing these initial installments for chapter 3. Remember, my focus is on what makes your business model compelling. And in this installment, I start to articulate why experience strategy is not the delivery of a brand promise. In fact, the promise of an experience is a point of view.
So fun!
Of Tesla, Toyota, and Taylor Swift
Elon Musk. Love him or hate him, he still deserves respect. No entrepreneur has ever built so many different companies into billion-dollar enterprises. When Elon Musk starts or takes over a company, he has a point of view on what customers will want in the future. He’s often very vocal about that point of view and will update his point of view as he learns more.
Started in 2003 by two visionaries who wanted a true electric vehicle, Tesla began to be a viable concern when Musk joined the company. Demand for EVs did not exists, according to the automobile industry. People just didn’t want them. But Musk said they would and had the financing to push the vision forward.
With Musk at the helm and because of many dedicated employees, the company created a market for EVs. They started with a roadster, a top-of-the-line car that could clock speeds that almost no other road-worthy vehicle could deliver. And they continued their down-market crawl overcoming all kinds of technological hurdles and twists and turns until the company was able to produce an affordable, mass product, the Model S. They engineered everything: batteries, carriages, software, retail locations, charging stations. From the ground up.
And what drove Tesla? The Musk point of view that in the near future not only would the world, physically—materially, need EV cars, but consumers would want them. The brand was cool, but without the point of view regarding what people would need in the future, there would be no Tesla today. There would probably be no BYD (the largest Chinese EV brand). Or Rivian. Or any of the EV cars and trucks that are made by GM, Ford, Volkswagen, and other manufacturers.
Toyota has a different point of view. They have focused their energies primarily on hybrids. They were early pioneers in hybrid technologies. And they’ve stuck to their guns. They believe that the near future need of most people is not a fully electric vehicle, but a combination of the best things about gas power along with the strengths of electricity. The rest of the auto industry seems to be placing bets with both visions. They are, in fact, trying to catch up with the market leaders.
As of the writing of this piece, Toyota and Tesla are the two most successful auto companies based on brand valuation. And in both cases, the brand value was driven by the companies’ abilities to dramatically improve their customer’s experience.
Let me say that again. It was not advertising or messaging that created the promise. The auto industry transformed because leaders had a vision for a better experience.
The experience created the brand value.
Let me say it another way. We had it backwards. I had it backwards. Everyone who bought into brand experience management had it backwards. We started with a vision of what the brand was going to stand for—and therefore be valued at—and then sought to embody an experience that would deliver on that brand.
We thought the same way that Sony thought in chapter 2. Find a ‘who’ audience or traditional market >> Tell a story >> Engage the customer >> Create loyalty. Had Elon Musk followed that pattern, Tesla would be a niche roadster manufacturer. Toyota would have never left Japan.
But because they and so many other entrepreneurial companies focused their efforts on creating the best possible experience for a near future need—and then delivered—their brands went through the roof. Amazon, Google, Apple—you name the big brands today and you will find that the vision for the experience drove the brand. The promise of the experience was in the visionary’s point of view about future needs—not in the brand.
I hope this is sinking in. It seems counter-intuitive. The promise of the experience comes before the promise-making of the brand. In fact, the delivery of the experience comes before the brand has a strategy.
And what is the promise of an experience? It’s a point of view.
In an experience strategy, companies need to articulate their point of view about future needs. This description of how the company understands the future of customer needs is built around a future-focused insight on the customer that can only be fulfilled by the company because A) only the company knows about it or B) only the company knows how to execute against it. Or both.
Let’s turn to Taylor Swift. The Eras Tour is literally reshaping the economies of cities, states, and some countries. Swifties love Taylor and Taylor loves her fans. When I think of an experience economy, I can’t imagine a better example than the Taylor Swift experience. She creates more value for fans, on tour, in a stadium packed with other fans, than any other entertainment experience. And she is rewarded handsomely for it. She is estimated to make $4.1 billion from the Eras Tour alone!
To be sure, Taylor Swift is a brand. She is the brand. She lives the brand. The brand doesn’t exist without her. But before Taylor Swift was a brand, she was a talented musician who sang. She articulated her point of view about the world through her lyrics. She created the songs. She embodied the music. And as her fame grew, her point of view evolved and adapted to her new reality. It is her point of view about life that makes her so valuable to so many people. Swifties can almost anticipate what Taylor’s next song is going to be about because they get where she’s going.
Taylor Swift is a specific kind of brand; she’s a performance brand. (Get it?!) I like the play on words here but I don’t mean that she’s a performer and a brand. I mean, as a brand, she’s like a sports car. Her fans are loyal because they know that she will continue to perform at a high level. They want to stay associated with her because she makes their personal performance better. They feel more. They understand more. They are able to relate better because they love her songs. And they know that going forward, she will create new songs that will make them even more connected, understanding, and, in some cases, in love.
Their performance in life gets better because Taylor’s performance of her music shows them the way.
That’s the power of having a point of view. The broken framework: brands make promises; experiences deliver on promises needs to be redesigned.
To be continued …