4 Things the Grateful Dead Can Teach You About Social Business

by Shannon Paul on March 2, 2010

It doesn’t matter whether you love or hate their music, the Grateful Dead might just provide one of the best case studies on fan cultivation and word of mouth marketing ever.

Although their success pre-dates widespread use of the Internet and social media, the lack of tools and focus on people, passion and evangelism should inspire anyone looking to leverage positive word of mouth online or offline with little to no reliance on traditional advertising and media.

The answer lies in an approach to the band as a business, a fan-centric business, perhaps one of the most fan-centric businesses in history.

On my flight back to Seattle from Chicago yesterday I read an article by Joshua Green in The Atlantic on the Management Secrets of the Grateful Dead. The article focuses more on the sociological aspects and the academic study around the Grateful Dead phenomenon — and for good reason. It turns out that musical bunch of hippies knew a whole lot more about free, or freemium, way before Chris Anderson wrote a book about the power of Free, or the idea had a chance to spread to the social web — and with much financial success.

What you can learn about social business from the Grateful Dead:

1. Focus on Your Customers

The Grateful Dead was fiercely fan-centric. They established a telephone hotline to alert fans of its touring schedule ahead of public announcements, reserved some of the best seats for them, and put a cap on the price of the tickets. The tickets for live shows were then distributed through the band’s own mail-order house. According to Green this meant, “If you lived in New York and wanted to see a show in Seattle, you didn’t have to travel there to get ticketsand you could get really good tickets, without even camping out.”

2. Give it Away

The Grateful Dead “famously permitted fans to tape their shows, ceding a major revenue source in potential record sales, ” said Green. Although the article goes on to say that the band was not entirely selfless and would sue for infringement on merchandise and other copyrighted material, they stood behind the logic that bootlegged recordings of live shows would boost attendance and increase spending on related merchandise. Does this remind you of some of the arguments around file sharing and content posted to YouTube in recent years? What would the Dead do?

3. Connect Fans with Each Other

Although it took the Internet for most of us to begin to grasp this concept, the Dead and loyal Deadheads already understood that community is not a place. By focusing on the culture through merchandise and live performance experiences, fans were able to connect with each other in meaningful ways that led to deep bonding and real relationships. By making it easy for fans in remote locations to get advance tickets, the Dead created a fiercely loyal network of fans committed to not only seeing the band perform, but reuniting with old friends.

4. Make the Experience Matter

Live Grateful Dead shows relied heavily on improvisation. This meant that although they would often play crowd favorites, the songs would evolve into elaborate, lengthy performances as the night stretched on that might never be duplicated ever again. The recordings were the giveaway. Being there in person was still quite special.

How Grateful is Your Business?

Do you put your customers or fans at the center of everything you do? How can you go beyond connecting with your customers and help them connect through you?

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Photo Credit: scarlatti2004

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{ 19 comments }

March 2, 2010 Pat Strader

Great perspective; I think many are beginning to search for examples and extrapolate to help people understand the “shift”, if you will.

I think the Dead are great examples of community building, content and viral marketing.

March 3, 2010 Mike Billeter

As a huge Dave Matthews Band fan, I noticed right away how every point you make about the Grateful Dead reflects the way DMB has built a huge fan base. From its Warehouse (where members get better tickets weeks before they go on sale publicly) to their allowing – rather, encouraging – fans to record and share their live shows whenever possible, to connecting fans whenever possible (such as the insider-esque “Fire Dancer” logo on a bag or car) and, finally, putting on live shows that make the versions on their studio albums sound more like song samples than full-length songs, DMB has basically taken the Grateful Dead mold you lay out here and copied it to a T (tee?…I never know…).

Knowing how many other groups have done this too, it shocks me that more companies don’t use these types of models when trying to build a community base for their products or efforts. It’s not hard to see that it can work, but so many major corporations want to just keep doing things the way they’ve done things.

I’ve been to 11 DMB concerts, intend to be at 4 more this summer, and plan to do the same thing next year. And I tell everyone in the world they should do the same. Why a company hasn’t done something to make me feel this way about its brand is beyond me. It seems like it should be so blatantly obvious, yet they are still trying to build community through “clever” commercials and posting links on their Facebook fan page (although some are finally starting to do it right).

Every employee of every company should have to answer those two questions you close with EVERY morning when they get to work. If they can’t answer “Do you put your customers or fans at the center of everything you do?” and “How can you go beyond connecting with your customers and help them connect through you?” with raging yesses, then they need to listen to some more Grateful Dead and DMB. I think. Or something.

You know what I mean.

March 3, 2010 Brandon Chesnutt

Hey Shannon,

I’ve read a ton of stuff on the Grateful Dead’s marketing efforts. I’ll definitely add this post to the list. :)

This really reminds me of an awesome Nine Inch Nails case study I’ve watched a couple times on YouTube. The entire Nine Inch Nails business model is built on a simple philosophy:

Connect with Fans + Reason to Buy = a successful music business model.

I’d recommend checking it out if you have a few minutes: http://www.youtube.com/watch?v=Njuo1puB1lg

Brandon
@bchesnutt

March 3, 2010 Shawn Collins

On your third point about connecting, I was into the Dead for a time in the 80s and couldn’t go on tour, since I was a teenager.

So, in between times they were in my area, I’d find other people in my area through the classifieds in Relix magazine to get together in person and trade tapes.

The classifieds there were almost like a social network in print some 25 years ago (and certainly longer, but that’s when I was using it).

Dead Heads were also active early on with Usenet in the group rec.music.gdead

March 4, 2010 St. Steven

One critical point that I feel was left out of the article was that the Grateful Dead did not have profit as their bottom line. The entire point of their music and scene was to create a community of people, and they happened to make some money from it, not the other way around. Perhaps if commodities were created and sold with the purpose of benefiting people and communities rather than exploiting them and using marketing to hoodwink them, then a business could have the kind of loyal following the GD had. The GD certainly were not angels but their intentions were pure, which is the only way to make a truly useful and beneficial product.

March 4, 2010 Shannon Paul

That’s a good point, although I’m not quite so cynical these days. I think most people who work for companies have good intentions… it’s easy to talk about “corporations” and big industries yet forget there are real human beings at work there.

I like to think that a lot of the social technology is increasing accountability and therefore making it more important — and financially beneficial — to move forward with good intentions.

The article did say that the Dead stumbled on this business model by accident — that they were indeed trying to do quite the opposite of just about everything that was considered common sense at the time for good business. Profit wasn’t their primary motivation, but they certainly did want to sustain what they were doing for as long as possible and live comfortably in the process. I don’t think there’s anything wrong with that.

Thanks for stopping by!

March 5, 2010 Cory Grassell

Interesting post. Thanks for sharing. For those who hesitate to engage in social networking, I always wonder why. Is it because it’s “new,” and they want to rebel against conformity? Do they fail to understand the impact of social media? It’s really nothing different than you’d normally do in daily living. Why not do it electronically, too? The payoff is huge.

March 17, 2010 Brett Borders

I am a Deadhead and this is a great post!

March 23, 2010 patrickdh

As you clearly remark, it is a fact that principles for community building and being social was invented before the internet, but it’s great to read about the valuable lessons which dead have enabled to sustain in light of the importance of internet today and for which we are grateful. Long lives García & Co.

April 4, 2010 Rob Kelly

Great summation of The Dead’s impact on social business. They truly were innovators in moving the “free line” and many other business concepts such as “Organized Chaos” (adopted by Google).

I found your posting while researching an article I wrote about: The 7 Business Lessons I Learned From The Grateful Dead:

http://www.purchase.com/blog/leadership/7-business-lessons-i-learned-from-the-grateful-dead

April 15, 2010 nommo

Aha! Great post Shannon (actually I am spotting many great posts here – I will be back!) This particular post helped me think about the company I work for in a different light – particularly regarding social business optimisation.

It is also worth noting that John Perry Barlow went on to join WELL in 1986 (where there was an emerging tribe of online deadheads), sat on their board of directors and also later founded the Electronic Frontier Foundation.

It would be fair to say that the Grateful Dead was instrumental in the actual evolution of the social web and online community, not just a great metaphor for socially optimised business.

May 26, 2010 Social Steve

Shannon,

Nice piece. In a similar fashion, I wrote “What Brands and Social Media Players Can Learn from The Grateful Dead” at http://bit.ly/NJX9k a while back. I think we are on the same page – (:>)

Best,
Social Steve

May 29, 2010 Scott

I think you’re right in your premise, but it feels so wrong. I have to assume they were about the music, and the marketing, while successful, was an accident. If I consider anything else my world will become too jaded even for me.

May 29, 2010 J T DUTTON

I love the Grateful Dead community. I love sharing stuff. I owe them for the emotional inspiration they gave me to write Freaked, my first novel.

July 24, 2010 Steve Parker

That’s a nice summary that hits several of the key lessons the Dead can offer marketers. As a lifelong Dead fan and self-taught guitarist who literally learned a lot of technique from listening to Jerry Garcia’s playing, I have strong feelings about using their story to teach fan base marketing.

The most important thing to know about the Grateful Dead is that the marketing (which might more accurately be called “fan customer service”) was in service to the music–NOT the other way around. The music was everything. Your implication that improvisation had anything whatsoever to do with fan relations is the one area where you’ve strayed in your post. You have to understand that was the musical style. It was not concocted by marketers, it was one of the core elements of the band’s highly original art form.

Anyone who takes this topic seriously needs to understand a few things about the Dead that are not obvious if you weren’t there. First, as I have tweeted, the Dead’s marketing had two things that most campaigns do not: LSD and one of the greatest bands of all time. It’s not really possible to use the Dead as exemplars without acknowledging the integral role of the hippie/psychedelic culture. Second, the Dead Heads were a near-nomadic tribe who were part of that culture and who make today’s rabid fans look like fickle amateurs. The point being no marketing campaign can turn a fan base into a culture–the culture was prerequisite. Third, and this follows from the first two, the Dead were a true cultural phenomenon, not merely one of the greatest bands of all time. If whatever you’re hawking is not one, then your mileage may vary.

All too often, spectacular results come not from spectacular marketing, but from spectacular products. Any attempt to attribute the success of a spectacular product to the marketing is suspect.

We should be careful to avoid twisting the Dead’s story to fit some marketer’s imaginary scenario. Not having read the book yet, I can’t say if it crosses the line. I hope not. There are lessons to be learned, for sure, but we can only learn about fan base marketing from the Dead if the story is complete, accurate and true.

July 24, 2010 Shannon Paul

Steve,

I wasn’t trying to imply that improvisation was anything to do with marketing, but the lessons contained in an improvisational environment can benefit marketing and business strategy. Maybe I was being a bit less literal when I wrote this — my intention was to use the Grateful Dead’s approach to EVERYTHING as a metaphor for businesses to understand how approaching things with a work-in-progress mentality and dependent on fan interaction is better than a tight, command-and-control approach. Make sense?

October 19, 2010 Jack Straw

I have to agree with some of the comments here that the product – the music and the atmosphere that “magically” kept people on a lot of drugs from sharp corners – was primary, and when the market went crazy, like Deer Valley, some of the limits of managing a “community” that could all of a sudden appear in the same place became pretty evident.

The Dead did thread a needle. They were more-or-less broke in the mid-70s, and really hit their massive success when almost everybody else was going opposite directions. Most of all, though, I think they liked playing, couldn’t make it off of record sale, and figured out how to make touring work.

I love a lot of other bands, but there was nothing like a Grateful Dead concert. Still isn’t.

November 23, 2011 Cayleigh Parker

I am grateful for the hundreds of hours each of you put into your blogs. Much success to all of you in the future! I recently read a great post by Andrew Hunt about how to drive actual revenue from social media for B2B companies, Is Your B-2-B Social Media Strategy Full of B.S.?, check it out.

December 24, 2011 L

That’s right, give it away and positivity flows right back!

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