Listen to the band:

Entrepreneur, June, 1999 by Sam Hill, Glenn Rifkin

IMPLEMENTING NONTRADITIONAL METHODS AND BEST-PRACTICE BUSINESS DECISIONS, THE GRATEFUL DEAD HAS HAD A REMARKABLE 30-YEAR RUN AS A ROCK ICON. FOLLOW THEIR LEAD, AND KEEP YOUR BUSINESS TRUCKIN'.

RADICAL MARKETING, BY ITS VERY NATURE, CAN BE APPLIED BY ORGANIZATIONS BOTH LARGE AND SMALL ACROSS A WIDE DIVERSITY OF INDUSTRIES. IT OFTEN FINDS A CHAMPION IN THE MOST UNLIKELY PLACES.

The Grateful Dead, for example, would seem a strange bedfellow in any collection of exemplary business organizations. A rock 'n' roll band, and a defunct one at that, seems hardly the place to find lessons in brand building and marketing.

Yet the Grateful Dead, over the course of a remarkable 30-year run as a rock icon, employed a raft of nontraditional methods to build a brand that endures and continues to grow more than four years after the group disbanded. The 1995 death of Jerry Garcia, the band's musical and spiritual leader, at the age of 53 marked the end of an era as well as of the band. But, if anything, the brand has actually thrived and grown stronger since Garcia's death, fueled by a broad and radical marketing plan by Grateful Dead Productions, the band's longtime corporate entity, and an insatiable desire on the part of Grateful Dead fans for the band to live on.

Because the lessons it offers are universal, as relevant to selling perfume or cars as they are to marketing music, the Grateful Dead is a radical marketer worthy of attention. The Grateful Dead, through a series of both serendipitous circumstances and conscious best-practice business decisions, built a model that flew in the face of conventional music industry wisdom. What emerged was a highly successful, easily recognizable brand with the cachet of a Harley-Davidson and a vast following of fans known as Deadheads, who were as devoted as a religious sect.

In many ways, the Dead is in an enviable position. A highly profitable, debt-free, privately held 34-year-old company like Grateful Dead Productions, still owned and run by the founders, is unusual in today's dynamic business environment. This fiscal serenity, along with the continuity of ownership and leadership, provides a prognosis for the future that is remarkably upbeat.

KEEPING THE VALUE PROPOSITION

The remaining band members and their business advisors understand that the best brands can - and must - reinvent themselves, like Madonna or the NBA, and that they flourish where others might simply close up shop and go home. Big traditional marketers like Pepsi and McDonald's spend hundreds of millions of dollars refreshing their brands, keeping them from getting stale. The Grateful Dead lost its musical center and guiding genius with the death of Jerry Garcia, but the value proposition for its customers never waned. In fact, quite the opposite occurred as the remaining band members and their organization found a way to reinvent the brand and make it flourish.

From its nondescript, 32,000-square-foot headquarters in Novato, California, Grateful Dead Productions has become the L.L. Bean of rock music, sending out its combination fan magazine and catalog to more than 150,000 fans who can choose from among more than 500 Grateful Dead items, from golf balls to CDs, and from baby clothes to toothbrushes. Employees wearing the group's trademark tie-dyed T-shirts ship more than 1,000 packages a day, and merchandise sales reached more than $8 million in 1998. That's just a fraction of the $60 million that all Grateful Dead items generate each year for the band, the record companies and outside licensees. Grateful Dead Productions has revenues of more than $20 million from a combination of products that it makes and sells itself and from royalties it receives from licensed items.

The Grateful Dead represents the best of radical marketing because it focused on a single value proposition that was built on a devotion to a unique but consistent style of music and a carefully established, long-term relationship with its customers. Unlike successful traditional marketers like Procter & Gamble, the Grateful Dead never used massive advertising or promotion; they simply went deep into a niche market. And in so doing, they won praise from even the most traditional of marketers.

A CLEAR MISSION

Like other great radical marketers, the Grateful Dead eschewed glitz and tricks and focused on a single element, a marketing hallmark that is far too often ignored by even the biggest organizations. In essence, the Dead's story is a case study of substance over form in the context of niche marketing.

From the day the band came together, the group had a clear sense of what its "product" should be and who its audience was. Even when the band members eventually started earning great sums of money and enjoying the lifestyle the money brought, they never put the money first and never let the bottom line dictate what went out the factory door. The music was always the driver and the catalyst for all decisions and strategies.

Despite the band's roots in the anti-materialistic, counterculture era of sex, drugs and rock 'n' roll, several members became astute businessmen, aware there was revenue being generated around their popularity. The band incorporated in 1973 and, with the band members as co-CEOs and the board of directors, became a serious business venture. Each band member has an equal share of the profits and an equal vote in approving all merchandising and business decisions. The first crucial move was to agree that if a band member left or died, his shares would be brought back into the organization so control remained central and [the remaining members] could carry out their mission without struggling with outsiders.