Create a Cult-Like Following: Marketing Lessons from the Grateful Dead

When you think marketing visionaries, what companies come to mind? Apple? Google? Maybe even Microsoft? It's true that each of these companies in one way or another has come to define marketing in the digital age. But the practices they've been pushing—viral marketing, social networking, giving away products or services, asking for and acting on input from customers—have somewhat, well, groovier roots than you might imagine.

According to authors David Meerman Scott and Brian Halligan, these marketing ploys were born on the road with one of the most iconic bands of all time—The Grateful Dead.

"Everyone knows the Grateful Dead as rock legends and amazing musicians," says David Meerman Scott, coauthor along with Brian Halligan of Marketing Lessons from the Grateful Dead: What Every Business Can Learn from the Most Iconic Band in History(Wiley, August 2010, ISBN: 978-0-470-90052-9, $21.95,MarketingLessonsFromTheGratefulDead). "But not as many realize they were marketing pioneers. In the 1960s the Grateful Dead pioneered many social media and inbound marketing concepts that businesses across all industries use today. Every business can learn from what the Grateful Dead has done over a 45-year career."




The authors provide an overview of the band's marketing genius in their new book,Marketing Lessons from the Grateful Dead. Each of the 19 chapters presents and analyzes a marketing concept practiced by the Dead and provides a real-world example of a company employing that concept today. The goal? To show you how to think and market like the band—which is to say, in a way completely unlike your competition.

"The Grateful Dead is one huge case study in contrarian marketing," says Halligan. "Most of the band's many marketing innovations were based on doing the exact opposite of what other bands (and record labels) were doing at the time. The Dead pioneered a 'freemium' business model, allowing concert attendees to record and trade concert tapes, building a powerful word-of-mouth fan network powered by free music. It's a model that has influenced many of today's very best marketers."

Marketing Lessons from the Grateful Dead is filled not only with information about the band and how they came to be loved by so many, but also with advice on how the Dead's marketing brilliance can be used in today's business world. For example:

Carve out your own landscape. The Grateful Dead created a business model that was the exact opposite of every other band's at the time. Rather than focusing on selling albums, they focused on generating revenue from live concerts, and in doing so created a fan "experience" that was unlike any other. The concert-as-business-model worked, and the Dead created a passionate fan base that became an underground cult that catapulted the Grateful Dead into the rock-and-roll stratosphere.

"Products that are highly differentiated can still succeed today, but it's much harder to win if your business model is the same as your competitors'," says Halligan. "Your job is to do research about your industry in order to build a killer business model. You want to break free from the competitive landscape and create a cascade of unique benefits for your customers."

The authors point out that today's big winners typically win because of unique business model assumptions, rather than some new technology or complicated improvements. Prime examples include Netflix (vs. Blockbuster) and iPod and iTunes (vs. MP3s and downloading). Like the Grateful Dead, these companies turned the core assumption of how their industry works on its head to create an unlevel playing field for themselves.

Choose memorable brand names. Love it, hate it, or don't understand it—whatever you may think of it, the Grateful Dead is a name that you remember. The dictionary defines the term as a type of ballad involving a hero who helps a corpse who is being refused a proper burial. For the Grateful Dead, the strange cosmic quality the name evokes—a world beyond consciousness—was perfect. Fast-forward to four decades later and the name seems ideal. The choice of name worked to help advance the Grateful Dead to its widely recognized status as the most iconic band in history.

"When you select an uncommon name—one appropriate to your company image and target market—it's unlikely that consumers will confuse your product with something similar," notes Scott. "They will remember you. And in today's world of online communications and of search engines, unique names for your company, products, and services allow you to own the search engine results for your brands."

Mix up your marketing department. Some argue that the Grateful Dead were not the best musicians, but their deeply diverse backgrounds made for a powerful combination that created a sound unlike any other. In addition to having musicians with diverse backgrounds, the Grateful Dead often had musicians with very little experience and even less formal education. The mix of unique backgrounds unencumbered by conventional wisdom proved to be a powerful combination.

"Does your marketing team look like everyone else's?" asks Scott. "If so, it's time for a change in organization, some new skill development, and new blood."

He and Halligan suggest you organize your marketing team in this way: You want someone responsible for "getting found" (filling the top of your funnel), someone responsible for "converting" the folks who are getting pulled in, and someone responsible for "analyzing" the numbers and helping you make better decisions. Look outside your marketing department (inside your company) and look outside the marketing industry (outside your company) to fill in talent gaps.

Experiment! (No, not with what you're thinking!) The Grateful Dead played over 2,300 concerts and each one was completely unique due to their improvisational style. The Grateful Dead experimented with musical forms and genres—both as a group and individually—creating unique musical experiences. Despite the occasional poor performance, they didn't become conservative and stop experimenting. They continued to push the edge and learn from the mistakes they made in the process.

"Like the Grateful Dead, marketers today need to experiment in their craft in order to make big breakthroughs," says Halligan. "Instead of seeing failure as something to be avoided, CEOs and management teams need to free their marketers to experiment, quickly learn from failure, and experiment again.

"Like music, marketing is a creative discipline," he adds. "Instead of worrying about making mistakes, you should be doing at least five times more experiments than you are likely doing today. In terms of marketing, this could mean starting a blog, freeing your employees to Tweet or write posts for your blog, or leaving comments on others' blogs."

Lose control of your marketing messages. A Grateful Dead concert was about having fun, meeting friends, checking out great music, escaping the everyday, belonging. Each person defined the experience a little differently, and the group defined the whole. There were interesting subgroups wandering along as part of the larger odyssey that was the Grateful Dead experience.

"In building a community, the Grateful Dead were willing to give up a large degree of control over how they were defined and instead hand it to their fans," explains Halligan. "While this approach is highly unusual, it is also often very successful. When organizations insist on operating in a command-and-control environment with mission statements, boilerplate descriptions, messaging processes, and PR campaigns, their strategies can both hamper growth and backfire in execution.

"Let your community define you, rather than trying to dictate what's said—and how—about your company," he advises. "When you let others define and talk about you, it is more likely that a community will develop."

Put fans in the front row. Unlike nearly every other band, the Grateful Dead controlled the ticket sales for their concerts. While other bands moved toward selling tickets through electronic systems of the day, like Ticketron, and later, Ticketmaster, the Grateful Dead established their own in-house ticketing agency in the early 1980s. The system allowed the Grateful Dead to announce tours to fans first and treated supporters to the best seats, driving passionate loyalty.

"The Grateful Dead teaches us to treat customers with care and respect," says Scott. "Yet we see so many organizations that do precisely the opposite. Instead of putting loyal customers first, they ignore them while they try to get new ones. While we're all for growing a business, we don't think it should come at the expense of annoying existing customers. Always remember, your most passionate fans are also the people who tell your stories and spread your ideas."

Free your content. Unlike other bands, the Grateful Dead encouraged concertgoers to record their live shows, establishing "taper sections" behind the mixing board where fans' recording gear could be set up for best sound quality. The Grateful Dead set their music free by allowing and encouraging these tapers. You would have thought that giving their music away would have diminished their success, but actually, it was fuel on the fire. The band removed barriers to their music by allowing fans to tape it, which in turn brought in new fans and grew sales.

"The takeaway here is that when we free our content, more people hear about our company and eventually do business with us," says Halligan. "The way to reach your marketplace is to create tons of free content like blogs, videos, white papers, and e-books. This is because each piece of content you create attracts links from other websites. When you give content or small pieces of your product away, it attracts a lot more interest and really opens up the top of your marketing funnel in a dramatic way."

Partner with those who are eager to sell your stuff. Most bands prohibit the sale of merchandise in parking lots because they want to ensure that only "official" merchandise is being sold. While the Grateful Dead also sold their own gear inside, they partnered with the vendor community, resulting in some very creative uses of the band's "Steal Your Face" logo, such as on baby clothes.

"Find the entrepreneurs who would like to make money from your brand and work with them to do so," notes Scott. "Do you have people selling versions of your products and services that seem in competition to your direct sales efforts? Maybe the right thing to do is to partner with those entrepreneurs rather than send them a legal notice.

"Better yet, proactively find and approach companies that seem to be competitors and work out a way to help one another," he adds. "For example, if you're a realtor, why not forge a partnership with a home improvement company? Manufacturers or retailers of baby and children's products should work out a deal to sell merchandise on so-called 'mommy-blogger' sites."

Give Grateful-ly. The Grateful Dead frequently threw their support behind causes and ideas they believed in, especially anything related to improving life in their home base of San Francisco. Giving back to the community became an essential element of the band's brand image. At the band's regular shows, they invited favorite organizations to set up tables in the hallways and educate fans on issues like organ donation and voter registration. Concertgoers knew the Dead's commitment was authentic and that added to the perception of the band's positive and supportive approach to making music and helping people improve their lives.

"A consistent and sustained level of giving back to the community is of significant benefit to companies," says Scott. "When a company carefully chooses a particular charity or cause to support and makes it a part of their corporate culture, continuing the commitment over many years, the accrued benefits to both the brand and the recipient charity can be enormous."

Do what you love—even if it takes a while to get it right. Because the Grateful Dead loved what they did, they stuck with it and (obviously) eventually prospered. That passion helped them persevere through some very rough times. For example, on the first gig they booked, they were contracted to perform two nights in a row. They were so bad the first night that the owner of the joint replaced them with three elderly gentlemen in a jazz band. The band members were so embarrassed they didn't even bother asking the owner for their one night's pay. Rather than throw up their hands and give up, the band went back to the studio and doubled down on the practice routines. It actually took several years and a great deal of practice before they really started getting good market traction with their unique sound.

"The Grateful Dead teach us to live our own dreams—not someone else's," says Halligan. "Not only does doing what you love increase your odds of success, but it dramatically increases your happiness. You spend more than 50 percent of your waking adult life working, so you might as well do what you love. Doing something you don't enjoy during more than 50 percent of your waking adult life takes a toll on your psyche that goes well beyond the boundaries of the workplace. Conversely, doing what you love pays huge dividends in your personal life."

"Instead of obsessing over recording, the Dead became the most popular touring band of their era, selling hundreds of millions of dollars' worth of tickets, and creating a highly profitable corporation in the process," says Scott. "Without hit records, the Grateful Dead achieved elite success, becoming one of the most iconic rock bands of their era and inventing a brand that democratically included their consumers and literally co-created a lifestyle for Deadheads."

"We were eager to write this book because we've identified many lessons in what the band has been doing for more than 40 years that can be applied today," concludes Halligan. "These lessons are an important tool for helping to understand the new marketing environment in a language and with examples that are familiar to all. It's knowledge that we hope will keep you and your business 'rocking on' for a long time to come."

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About the Authors:

David Meerman Scott

Since his first Grateful Dead show when he was a teenager in 1979, David Meerman Scott has seen the band perform over 40 times. David is a marketing strategist and a professional speaker. He is the author of the BusinessWeek bestselling book The New Rules of Marketing & PR and several other books. He speaks at conferences and corporate events around the world. He loves to surf (but isn't very good at it), collects artifacts from the Apollo moon program, and maintains a database, with 308 entries at this writing, of every band he has seen in concert. He is a graduate of Kenyon College, where he listened to a heck of a lot of Grateful Dead in his dorm room.

Brian Halligan

Brian Halligan has seen the Grateful Dead perform more than 100 times. He is CEO & founder of HubSpot, a marketing software company that helps businesses transform the way they market products by "getting found" on the Internet. Brian is also coauthor of Inbound Marketing: Get Found Using Google, Social Media, and Blogs and is an Entrepreneur-In-Residence at MIT. In his spare time, he sits on a few boards of directors, follows his beloved Red Sox, goes to the gym, and is learning to play guitar.

About the Book:

Marketing Lessons from the Grateful Dead: What Every Business Can Learn from the Most Iconic Band in History (Wiley, August 2010, ISBN: 978-0-470-90052-9, $21.95,MarketingLessonsFromTheGratefulDead) is available at bookstores nationwide, major online booksellers, or directly from the publisher by calling 800-225-5945. In Canada, call 800-567-4797.