Grateful Dead Always Knew How To Connect With Fans

Culture

from the but-of-course dept

For many, many years, the classic example we’d use of a band who knew how to really connect with its fans (and give them a reason to buy) was The Grateful Dead — who were, for years, the highest grossing band around, despite encouraging widespread sharing and trading of their taped shows (which they made easy for fans to tape). So while this article is really nothing new, it’s nice to see this article about the band highlight some of how the band handled these things (thanks to Dave W for sending this in). While the band has always been very aggressive (too much so, in my opinion) in trying to enforce its copyrights over any kind of commercial use, it basically ignored them for non-commercial use:

ODDLY ENOUGH, THE Dead’s influence on the business world may turn out to be a significant part of its legacy. Without intending to–while intending, in fact, to do just the opposite–the band pioneered ideas and practices that were subsequently embraced by corporate America. One was to focus intensely on its most loyal fans. It established a telephone hotline to alert them to its touring schedule ahead of any public announcement, reserved for them some of the best seats in the house, and capped the price of tickets, which the band distributed through its own mail-order house. If you lived in New York and wanted to see a show in Seattle, you didn’t have to travel there to get tickets–and you could get really good tickets, without even camping out. “The Dead were masters of creating and delivering superior customer value,” Barry Barnes, a business professor at the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University, in Florida, told me. Treating customers well may sound like common sense. But it represented a break from the top-down ethos of many organizations in the 1960s and ’70s. Only in the 1980s, faced with competition from Japan, did American CEOs and management theorists widely adopt a customer-first orientation.

As Barnes and other scholars note, the musicians who constituted the Dead were anything but naive about their business. They incorporated early on, and established a board of directors (with a rotating CEO position) consisting of the band, road crew, and other members of the Dead organization. They founded a profitable merchandising division and, peace and love notwithstanding, did not hesitate to sue those who violated their copyrights. But they weren’t greedy, and they adapted well. They famously permitted fans to tape their shows, ceding a major revenue source in potential record sales. According to Barnes, the decision was not entirely selfless: it reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets. The Dead became one of the most profitable bands of all time.

The article goes on to talk about how lots of people are just now starting to look back at how The Dead ran their business to understand how to run modern customer-focused businesses today — ones that recognize when it makes sense to let people do things that legally could be stopped (if not in reality) and how to take advantage of those situations. It’s a good read.

Filed Under: business models, connect with fans, grateful dead, sharing