Lessons from Tesla and In-N-Out Burger

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This week I spent a few nights at a hotel in Lathrop, California. While there, I drove by the new Tesla manufacturing plant and noticed that an In-N-Out Burger distribution center was located next door. Both of these companies share several key characteristics as it relates to their customers and marketing plans.

Looking on, they seem to serve a very differing product and provide very different services, but I would put forth that both designed their respective product and how it is served based on their perfect customer. In identifying their perfect customer, they also discovered their perfect niche.

Let's start with Elon Musk's Tesla.

While many car companies were attempting to build a small economical electric vehicle, Elon Musk recognized a different opportunity: the wealthy environmentally-conscious buyer. After all, who wants to park their Honda Prius or Nissan Leaf by their neighbors Mercedes? You worked hard. You want a luxury car, but you also want to be environmentally conscious. What do you choose? In steps Tesla with the ultimate status symbol.

Tesla’s initial product went straight at the heart of the traditional sports car. The roadster was all about speed and style. Definitely not what you thought about when thinking of electric vehicles at the time of its release. It was sleek. It was sexy. It was sold out before the first one was ever released.

It worked!

Just drive around the freeways of California. Tesla's are everywhere. They are not competing against the Nissan Leaf, or clamoring for the bottom of the market. No, they have set the standard and now Mercedes and BMW are trying to catch up.

Tesla also focused on the right market location. Tesla wouldn't have had much of a chance in the Southeast, or Michigan, or Wisconsin. Tesla’s perfect customer was not there. They found their “gold in California.”

Likewise, another west coast company, In-N-Out Burger, found a customer who valued taste and freshness over speed, options and cost. Just about every time I get back from traveling to the west coast, someone will ask me if I went to In-N-Out Burger. It's basic, but it's good. Service is quick and efficient. It tastes like real food. Consistently fresh; consistently good food.

In-N-Out knows the value of the family brand. Even San Francisco, a city that has traditionally despised fast food chains, loves them. In-n-Out has chosen not to franchise in order to maintain strict control over quality and is known for treating employees their employees well and their customers better. They are acclaimed as highly as the classic Route 66 road trip that you can’t help but remember during each visit.

The Lesson is you need to start with the customer in mind. Design for your perfect customer, and focus on where they reside. The perfect customer, in the right location. You can't go wrong.