“Dead”-On Business Rules: Ten Tie-Dyed and True Marketing Lessons from the Grateful Dead, part 1 of 2

Viral marketing and social networking have arrived on the scene after a long, strange trip indeed. The Grateful Dead were much more than a bunch of rock-and-roll geniuses; they were pioneers of the digital age marketing landscape.

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.

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. 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 Grateful Dead is one huge case study in contrarian marketing. 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. For example:[wcm_restrict]

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’. 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.

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. 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? If so, it’s time for a change in organization, some new skill development, and new blood.

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. 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. 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.

Next Wednesday: Learn the final six tie-dyed and true marketing lessons from the Grateful Dead[/wcm_restrict][wcm_nonmember]

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About the Authors

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 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.