What the Grateful Dead Can Teach Us About Marketing
Whether a die hard Dead Head or not, everyone knows the music of the Grateful Dead. The band has performed more than 4,000 shows throughout the course of its 44 year history and during this time, has amassed a veritable army of fans. As it turns out, the band’s success can be attributed to more than simple talent, great music, or dumb luck. Believe it or not, behind the Grateful Dead is a well oiled marketing machine that built the band’s popularity through a radical form of marketing that holds lessons for businesses of all kinds.
Many of the marketing practices employed by the Grateful Dead have become more commonplace now, but at the time the band began using them, they were downright subversive. Consider the following:
- As early as the 1960′s, the band encouraged concertgoers to tape shows and even set up “taper sections” to accommodate them;
- Before Napster even existed, the band encouraged fans to copy tapes of their shows and trade them with friends;
- When other bands banned cameras, the Dead encouraged people to take pictures and video at live shows; and
- The band never used large scale advertising or promotion to build its following.
Given the above, how did the band not just survive – but thrive – as a profitable business entity? The secrets to the Grateful Dead’s success included:
- Maintaining Control Over the Brand: In 1973, when band members realized the Grateful Dead’s growing popularity, they decided to incorporate, with the band members as co-CEOs and members of the Board of Directors. This Board is still in place today with the provision that when a member dies (as Jerry Garcia did in 1995), their share would revert back to the other members of the Board to be split equally.
- Connecting with the Customer: By choosing to focus on performing live rather than recording, the Grateful Dead developed a direct and lasting connection with its fans. How did it do this? Unlike other bands, the Dead never accepted corporate sponsorship, established a ceiling for ticket prices, and even set up its own ticket sales operation to prevent scalpers from engaging in price gouging. The focus was always on performing, performing, performing.
- Rewarding Employees: At its largest, the Grateful Dead’s operation employed 80 people. Everyone on the payroll remained employed between tours and the band set up profit-sharing, retirement and health programs for its crew, many of whom earned six figure salaries!
- Branding the Lifestyle, Not the Product: There is a reason fans of the Grateful Dead are called “Dead Heads.” The band’s fans don’t just buy their music – they were known for traveling the country to follow the band on tour, taping concerts, and even keeping logs of each concert they attended and the songs that were played.
- Creating a Community: The Grateful Dead were early pioneers of database marketing. Their “Dead Freaks Unite” campaign generated a mailing list of 30,000 names when it launched in 1971. That list grew to 50,000 by 1974, and became the foundation upon which communication with the fans took place. The band used the list to fuel fan’s loyalty by offering products such as “Dead-base,” a database of its shows and playlists.
- Extending the Brand: The Grateful Dead was one of the first bands to successfully market branded merchandise, including t-shirts, posters, stickers and more. They did this by retaining tight control over branded products through licensing arrangements, and by insisting that any products carrying the band’s brand be of the highest quality. Today, Grateful Dead fans can choose from a catalog of more than 500 items, from golf balls to baby clothes, and these items earn the band more than $20 million per year.
The story of the Grateful Dead is more than the story of a successful band – it is really a recounting of a successful organization that built its business using sound marketing strategies. The resulting long term success holds lessons for businesses – and brands – in almost any industry. To learn more about what made the Grateful Dead so successful, check out Marketing Lessons from teh Grateful Dead: What Every Business Can Learn From the Most Iconic Band in History.