The Band is a Brand

posted by Al Haberstoh on February 25, 2010.

More years ago then I’d like to remember I attended a few concerts by The Grateful Dead.  In fact my youthful picture on our web site was taken at a Dead concert.   The band came to mind last week as I was reading an article about the tremendous job of they did to “brand” the group, even though in the early days no one would have used that term. With great foresight in 1968, they were the very first musical group to establish a proprietary customer database and newsletter to stay in touch with their legion of loyal fans.  They had millions of followers long before the term became associated with twitter.  Their connection with their customers, that is their fans, has lessons for every marketer. Even 15 years after the death of their revered leader, Jerry Garcia, and a virtual end to their touring, Grateful Dead Merchandising remains as strong as ever and brings in millions in sales every year.

As many of you know we have worked for clients in retail music distribution channels for many years.  As such we have become familiar with that industry.  Interestingly, the Grateful Dead pursued exactly the opposite marketing strategy than the industry as a whole.  The Dead knew that, much as many bands tried, they could not control consumers recording their concerts especially with the smaller and high quality recording devices available.  The “customer is in control” is a social media buzz term but the Grateful Dead understood it years decades before SM platforms existed.  Some concert-goers would record the concerts and duplicate and share the tapes.  Instead of trying to stop the practice the Dead encouraged it.  “Bootleg” Grateful Dead tapes became much shared and sought after for avid “deadheads” as their fans came to be known.

Contrast this with the way the music labels reacted to music downloads when they first became popular.  They used every legal means to stop them and prosecuted anyone they caught file sharing.  I always thought this was a dumb strategy.  Calling your customers thieves is not the way to build brand loyalty.  Just like the Dead could not stop the concert recordings, so, the music industry cannot stop file sharing. This is not to say that they should have thrown up their hands and given away all of their product.  It means they should have approached the problem creatively and encouraged free downloads to build a fan base for performers that could have been monetized in new ways.   The end result of a flawed strategy is the continued downward spiral of an entire industry.

Over the years I have seen many businesses fail because they were overly focused on the nuts and bolts of running their business: Their expenses were controlled, payroll was under budget, their leases and distribution costs were rock bottom. Yet they failed at the most important part of their business, engaging their customers. They went out of business for all the right reasons.

Most businesses will never be blessed with fans as passionate as those of the Grateful Dead.  Most businesses can learn from the high level of fan engagement they enjoyed however.  Be open and honest with your customers, listen to their concerns and find a way to address them, and do not let them pass you by when it comes to technological innovations.  Also, be willing to share:  ideas, product data, solutions, industry information and maybe a little music.  That, of course, is one of the purposes of this blog.

Here are Dead performing “Truckin”