Tesla dropped prices, but here’s why they have the range to do so
Surprisingly, Tesla recently announced a significant price drop in one of their newer models. Knowing how popular and costly, everyone is pretty excited about this sudden drop in price. It may even make someone consider purchasing a Tesla who thought it was out of their range before.
It’s important to note even with price dropping, the product still isn’t going to be for everyone. When you are building a product or service with your business, remember that your product isn’t for everyone. Decide specifically who it is for, but also keep in mind if they are willing to buy, it’s for them too.
Tesla had a specific goal and niche for the automotive industry. This goal is to accelerate the world’s transition to sustainable transportation. But with the higher prices, Tesla has always been considered to be a luxury car. This created an obvious buying barrier for people who wanted one, but simply can’t afford it. When Tesla saw how much more money they were leaving on the table and to consider the needs of potential buyers, they lowered their prices making it more affordable.
With changing this new model of cars to make them more affordable, Tesla hopes to reach a larger audience. People wanted Teslas, but were turned away because of the higher prices. They saw a need and provided it. But even with these lowered prices, it will still remain out of reach for a lot of people.
This is an important thing to consider with your business. Tesla started off with a mission or goal and created products or services for a specific group. Next, they maximized their costs on this specific demographic of people who could afford it while fulfilling their ultimate mission. And finally, they are able to afford to offer lower costing products due to their earlier years of gaining so much revenue.
Your product or service doesn’t have to be for everyone. Comment below who you serve.
Carlos “Loso2.0” Henry
Carlos Henry is a human behavior consultant, author, and coach who teaches young minority entrepreneurs and startup businesses how to achieve their personal and professional goals in a quarter of the time through high income skills.