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When to Swerve…and When to Pin It

If you’ve been reading our blog from the beginning you’ll know we wrote about Tesla a few months ago.  We’re a fan of their cars and their CEO’s flair for public relations.  I ask for your forgiveness as we write about them again because anyone who has seen a Tesla in person doesn’t soon forget it. The sleek lines, the unmistakable presence of style and innovation…and if you’ve been lucky enough to watch it cover zero to sixty in 5.4 seconds, well, you might just need a moment to catch your breath.

I sat in a friend’s Tesla recently – and even drove it about three feet. I heard how he had taken it from Connecticut to Baltimore and back without buying a drop of gas, stopping only once at a Tesla super charging station to power up on the way. No worries, he said, he used the recharge time to stretch his legs and have a cup of coffee.

But behind the power and glamour, there still lies a car company very much in building mode. A recent CNNMoney report said that in a letter to shareholders, Tesla Motors CEO Elon Musk reported increased revenues in the most recent quarter, but a large drop in profit. A close to $29 million drop, to be exact.

While this may have investors shifting in their seats, CNN reported that Musk followed up the announcement with plans for increased spending, with investments this year of up to $850 million focused mainly on research and development around the new Model X, set to go to market next year, and on planned expansion into China and Europe.

Musk is also continuing to move forward with the construction of a $5 billion lithium-ion battery “Gigafactory,” the location of which has yet to be determined as five states vie for the contract.

Long story short, Musk could have succumbed to the pressure of bearing bad investor news by downshifting. He could have eased concerns by cutting back, reassuring the skittish, or at the very least, spinning the numbers into a blur.

Instead, he chose to gun it.

Yes, profits are down, he said, but here’s why we’re going to spend more. Invest more. Expand more. As if that wasn’t enough, he reiterated his goal of delivering 35,000 cars around the globe this year, which would represent a 55% increase over 2013. The guy has chutzpah, you’ve got to give him that.

From a PR perspective, Musk’s approach presents an interesting dichotomy. On the one hand, there’s the negative financial news to which we’ve all become so accustomed, particularly within the automotive industry. An announcement like this could easily trigger a media feeding frenzy around the rush to write Tesla’s preemptive obit.

But from the public’s perspective, Musk’s forth righteousness is refreshing; we almost can’t help but root for Tesla against all odds. Musk is committed to going big or going home. What can we, as PR professionals, take away from this?

1) Please Don’t Feed the Cynics

With today’s unlimited access to information, readers and viewers are more informed than ever before. Research can be performed in minutes, leading to a nearly instant ability to discredit whatever diluted story has been approved for distribution. Add that to a morbid fascination with bad news, especially in corporate America, and you’ve got yourself a nation of harsh critics waiting to pounce. The decision to bare all and spin nothing can be an instant diffuser, allowing the attention to shift to where your client wants it to be.

2) Position Yourself: Failure or Underdog?

Once the truth is out, and the flame of negativity has been denied oxygen, your client has the floor. From here, smart positioning will not only erase the bad news as an indicator of failure, it will move it to the background. Coming to the forefront will be the story of the underdog, surging onward, taking on challenges in the name of innovation. We hit a snag, your client says, but what greatness was ever achieved without some strife along the way? By guiding PR efforts around this message, you can not only silence critics, but enlist fans.

When it comes to strategic – even seemingly risky – messaging decisions, there are more vital opinions to be considered than just those in an agency conference room. Millions of them, in fact. At Kovak-Likly, we are dedicated to keeping our finger on the collective pulse of the public you want to reach, so that your message can be honed and presented in the best light possible for the greatest response. What are your PR challenges for 2014? We’d love to hear from you and help find the best approach.

As for Tesla Motors, I am rooting for them in a big way. Despite a significant drop in profit, they still beat the expectations of most industry analysts, which tells me there are likely more surprises in store. Personally I hope one of them is an all wheel drive version for the snow with better battery life…and perhaps a tad lower purchase price.

– BML

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