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BUSINESS MONITOR


Tricks you can learn from the


Grateful Dead


A band formed 50 years ago may be a strange place to look when seeking marketing tips, but not by any means should the business acumen of the Grateful Dead be underestimated…


By PAUL CLAPHAM F


or those too young to remember and those old enough to have forgotten, the Grateful Dead were a Californian hippy band formed in 1965. Their career lasted some 45 years much like the Rolling Stones. Like the Rolling Stones they have fans across three generations. Given those three generations, they may be very familiar to younger readers. What distinguishes them from the Stones is how they went about being commercially successful. In some parts of the world – the hippy parts, obviously, but many others, too – they are considered the greatest rock band of all time. But not many people have bought even one of their albums, in any form. Nor is that surprising. They only ever had one album in the US top ten. Yet, they had that long successful career without hit after hit. Theirs is a story of successful marketing, of marketing themselves differently, although they would probably call it being tuned to the Zeitgeist.


That success and longevity is now featured in university business and


| 22 | June 2015


marketing courses across the USA. This isnʼt just to engage the alumni (although Iʼm sure it helps), itʼs because their story is a classic, long-term, successful marketing case history and there arenʼt vast lots of those available to professors. What the Grateful Dead did was to take rock musicʼs business model and stand it on its head. Where other artists treated live shows as a way to sell albums, for the Dead live performance was the big deal. They played as many as 100 concerts in a year over a 30 year period and they made a sackful of money doing it, i.e. selling hundreds of millions of dollars worth of tickets and official merchandise. They did, indeed, sell plenty of albums along the way, too, both at the events and in music stores.


Trick 1: Your business model doesnʼt have to follow your competitors; a distinctive business model is a USP in its own right; an innovative business model is as valuable as product innovation, especially because you can maintain control of it and move it on.


The Dead achieved their success by keeping a close focus on their fans, i.e. customers and what they wanted. Instead of having people ejected if they tried to record the show, they encouraged it. They created special locations for fans with tape


recorders where the acoustics were best (and the ticket prices higher). They had top quality sound systems and video long ahead of the rest.


That created free music which people could and did share, driving word of mouth. They were effectively using internet marketing techniques well before the internet existed. They also allowed sales of non-official Grateful Dead merchandise in the car park, which didnʼt stop people buying the official product. Together it created happy customers who came back and back again.


They also kept their customer base informed and so kept it and grew it. They mailed them a newsletter, which has become a highly prized (and priced) collectible, enabling them to be at the front of the queue for the best tickets. In essence they were enthusiastic (and effective) proponents of building customer loyalty long before Tesco launched Clubcard. They also shared personal information (think Twitter or a blog). Remember, they did all of this before the internet came along.


Trick 2:


Be generous to build a customer base – what you give away comes back fivefold or tenfold; be personal, too – people buy from people and the better they feel they know you, the likelier they are to buy.


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