In a conference call with journalists on Wednesday, Tesla CEO Elon Musk announced the “Tesla referral program.”
The program will pay current Tesla owners $US1,000 in Tesla credits to convince family and friends to buy a new Tesla.
In addition, the new buyer will also get a $US1,000 discounted on their new Tesla.
“This is a way for us to sort have a guerrilla battle with some of the car dealer associations,” Musk said during the call. “Tesla reps are not allowed to sell in certain states. So we are held back by some legislation.”
According to Musk the program will run from now until October, 31.
Here’s the email that Elon will be sending out to all Tesla customers:
Subject: Trying something new (plus party at the Gigafactory and a Founder Series Model X)
Word of mouth has always been a major part of how Tesla sales have grown. When I meet Tesla owners, one of the first things they often tell me is how they have convinced many others to buy the car.
As you may already know, Tesla does not advertise or pay for endorsements or product placement. Maybe by doing so we could sell more cars, but I don’t like the idea of trying to trick people into buying a product by false association. If you see somebody famous driving a Model S, it is because they genuinely like the car. If you see it in a movie or TV show, it is because the people associated with that production genuinely like the car.
Besides word of mouth, another way that our cars are sold is through stores. These will always be important to allow people to check out new models and ask our product specialists detailed questions. However, stores are quite expensive to set up and operate. In reviewing the Tesla cost of sales, we found that it is approximately $US2,000 to sell a car through our stores, higher in some regions and lower in others.
Both ways of reaching potential customers are important, but, if we can amplify word of mouth, then we don’t need to open as many new stores in the future. So, we are going to try an experiment. This is similar to the customer growth program that I worked on at PayPal/X.com back in ’99. What worked for PayPal may not work for Tesla, but it is worth trying, as the net result would be lowering our costs by $US2,000, allowing us to give that money to our customers.
From now through October 31st, if someone buys a new Model S through your link (XX include link XX), they will get $US1,000 off the purchase price and you will get a $US1,000 credit in your Tesla account, which can be applied to a future car purchase, service charge or accessories. To put some limits on the experiment, each Tesla owner can grant a maximum of ten $US1,000 discounts.
Just for fun, there will also be some things that money can’t buy. If five of your friends order a Model S, you and a guest will receive an invitation to tour the Gigafactory in Nevada — the world’s biggest factory by footprint — and attend the grand opening party. This will be awesome. At ten orders, you get the right to purchase a Founder Series Model X, which is not available to the public, with all options free (value of about $US25,000). The first person to reach ten will get the entire car for free.
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