By: Jay Caporale
In 1965, a band of merry pranksters boarded a bus that is still on the road 50 years later. The Grateful Dead, house band for Ken Kesey’s Acid Tests, initiated a series of inbound marketing concepts in the 60’s and 70’s including social media, CRM and open content that businesses still use today. The Dead organically grew a loyal and committed customer base, “deadheads,” placing them in the center of an innovative business model and customer relationship management strategy which created a legion of fans who remained faithful for generations.
From the beginning, the Dead embraced a distinct business model which ultimately promulgated an unscripted journey unlike any other in rock and roll history. The Dead’s brand was their live music. They toured chronically for 30 years, playing 2,300 concerts, recording 2,200 of the shows. In an era when rock concerts were well rehearsed and predictable, playing the “best of“ songs while sprinkling in new music from a just released album, Dead shows were unscripted, with no prescribe set lists. This promoted a sense of anticipation of what could happen on a given night, giving “deadheads” a reason to attend multiple shows and participate in a communal experience. The Dead encouraged and, in fact, help to facilitate customer taping of each show. The decision to essentially give away their music increased the demand, exponentially shattering the long held belief that scarcity drives demand and value—Adam Smith would not have counseled the Dead to “open source” their product.
The Grateful Dead valued their customers’ decades before loyalty programs and reward cards. In 1968, a person was hired to create a mailing list of deadheads who attended shows. In 1971, a liner was included in the Skull and Roses album—“dead freaks unite” encouraging fans to send their name and address and be placed on a mailing list. The list grew to 63,147 in five years. Leading the odyssey, the band controlled content and information flow to fans, placing the customer in the center. In the mid 1980’s, the band created a mail order process selling premium concert tickets directly to the fans. This ensured “deadheads” had preferred seating at shows, controlled tickets prices and nurtured loyalty. The “middle man” was cut out of the ticket price and the savings was passed along to the consumer, not the corporation. The Dead nurtured and respected their fan base and “deadheads” responded by creating a traveling caravan for 2,300 concerts.
Giving back was a core value of the band since its inception. For 20 years benefit concerts were primary vehicle for giving; however, in 1983 the band established the Rex Foundation, a 501(c)(3) making it easier and more efficient for philanthropic investments. The Rex Foundation is thriving today making charitable grants totaling $8.5 million to more than a 1,000 organizations around the world.
So this band of misfits who simply wanted to play music created one of the most recognizable and lasting brands in America by blazing their own trail while remaining loyal to their tribe—“sometimes you get shown the light in the strangest of places if you look at it right.”