The Grateful Dead on Building Customer Loyalty

grateful dead skullI was cleaning out the garage last weekend when I found a box of old mix tapes from my high school days. My Walkman was in the same box so I popped in the cassette and continued cleaning. “Wow,” I thought, “I really had great taste in music.” Unlike the pictures that show my poor clothing choices, the music had somehow gotten better with time. The first mix tape (I went through quite a few that afternoon) was all Grateful Dead.

Whether or not you are Deadhead, it is amazing how Mr. Garcia and the gang incorporated sound business practices into a seemingly unsound culture of music and mayhem. While some may consider the Grateful Dead a bunch of pot smoking, tie-dye wearing, hippies (which is not untrue), keep in mind that they also sold more than 35 million albums, created their own record label, and are one of the most successful concert touring groups in the history of rock ‘n roll – in just the first half of the 1990s, they earned $285 million in revenue, second-highest to the Rolling Stones.

Besides great tunes and incredibly talented musicians, the Grateful Dead garnered the most loyal fanbase a band could hope for. This did not happened by accident – the Dead put their fans ahead of all else. One way this was exhibited was in how they controlled the cost of tickets.

People would have paid big buck to see a Dead show, but immediate gains were not the band’s goal. Instead, with 40 years of success as proof, the Dead played the long game. They redefined success to consider the needs of their fans over “corporate greed,” thus earning the veneration of millions of dedicated Deadheads.

When building your fanbase of loyal followers, the Grateful Dead displayed behaviors that can benefit any leader. Besides keeping their products affordable, a few of my favorite customer-centric lessons from the Dead include:

Provide Authentic Experiences

If you enjoy watching a band perform a song the way it was recorded on the album, a Grateful Dead show was not for you. The Dead performed over 2,500 shows and each was completely original. Not only were set lists different every night, but they never played the same song the same way.

As leaders, we often find a way of doing something that works and we stick with it. Whether it is a script, weekly meeting agenda, or copy/paste emails, we like to say that we “do not want to reinvent the wheel.” That’s fine if your goal is to maintain the status quo. However, if innovation and ambitious visions are your intent, you need to keep it fresh. Mix up the sales tactics. Try calling (versus typing) once in a while. Show others that you are fully engaged and that they are more than a profit center.

We don’t want to burn the audience. And we don’t want to be excluding anybody. – Jerry Garcia

Create Demand

The Grateful Dead are known for allowing fans to record concerts. That’s right, they gave away shows. If you wonder why someone might want this, remember that every show was different. Think “Truckin” from their 1985 Seattle show was the best? Guess you never heard the 1993 version from Louisville.

What can you give away? I work with an insurance company that sends weekly articles that might affect my business. I have an attorney who sends books that she thinks may interest us. Besides time, these are low cost offerings. They provide value, help the business, and foster a meaningful professional relationship.

As for the concern that if you give it away, no one will want to buy it, that may be true if you are offering less-than-desired quality. However, with all of the bootleg tapes people recorded and re-recorded for their friends, the Dead were still able to attain 19 gold albums, 6 platinum albums, and 4 multiplatinum albums. The free items sparked the desire for more.

Real-Time Delivery

We discussed the Dead’s bootlegs, but let’s say you want a higher quality recording of the show? As described in the book Everything I Know About Business I Learned from The Grateful Dead, in the 1990s, fans could buy a three-CD set of the concert they were attending. Sounds great, but who wants to wait two weeks to be able to re-live the concert? Not Deadheads.

Before the show, fans pre-ordered the CD and would be given a wristband. After each set, staff made the number of copies priorly purchased. It was then rushed to the merchandise table where customers traded in the wristband for the professionally recorded CD of the concert they just enjoyed.

How long does it take you to meet your customer’s needs? If it is not immediate, which our high-tech world prefers, you need to provide constant follow up to show that it is in motion and you are on top of it.

The Grateful Dead involuntarily ended their reign over twenty years ago, yet their fanbase continues to increase. There have not been newly released recordings or top ten songs. There is no Grateful Dead reality show (yet). And TMZ does not report on the antics of the remaining members of the band. The Dead retain their popularity because they have a history of treating their customers with respect. So, as Jerry would say, “Be kind. Be honest. And be ready to maximize the potential of your customer base as you scale up your organization to meet the competing demands.”

He might not have said that last one.

grateful dead bears