I couldn't agree more with the concept of giving it away. I think the challenge is how much and when. If your product is intellectual capital then how much you give away can eventually erode your income, at least that's what my business sense tells me. Of course, I'll agree that even though I fully embrace the give it away concept I struggle with still hanging on to revenue paradigms of the past.
Marketing lessons from the Grateful Dead
We’ve heard the concept from Chris Anderson, in his book Free. If you want to ultimately make more money and win more fans you first have to give away a lot of stuff. That’s right, give it away. Like we all do in the social media space.
Anderson made a reference to the Grateful Dead, one of the only bands that allowed fans to record concerts and make their own bootlegged tapes. In fact they practically encouraged it. Why? It was simply a way to deliver greater service to the only constituency that mattered to the Dead. Who cared if it cut into album sales? It won the hearts of millions, generated greater attendance at live performances and a produced a community of self-proclaimed Dead Heads.
Other influential sources, including the Atlantic, have referred to the Dead’s “management secrets.” In an article published just this March, Joshua Green wrote, “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.” Here, too, Green refers to the Dead’s novel idea of focusing on its most loyal fans.”
Well, it may not be a new story, but it’s finally a new book. Marketing Lessons from the Grateful Dead. Leave it to my two friends Brian Halligan and David Meerman Scott, pioneers of inbound marketing, to take the case a step further and remind us that it was this legendary band that helped invent modern marketing and social media. A press release issued this morning states that, “For years the band broke almost every rule in the music industry book and profited as a result.”
In fact the band used the very techniques we are all learning to master now in order to differentiate itself from the all those other bands that emphasized record sales instead of fan satisfaction.
In the book’s foreward, the ultimate Dead Head of all time, former basketball great Bill Walton asks, “Who would have ever thought that it would be the Dead’s business and marketing models that would today be the envy of the culture they all fought so hard to change.”
I’ve seen the authors’ deck on the subject and read a previous blog post, but my advance copy won’t be here for another week. So whether the topic merits an entire book is a question I can’t answer. But as Brian says in the press release, “it’s a concept that really resonates with people.” How can it not?
If the book is half as cool as the cover, it will be the next social media classic. Congrats Brian and David on getting it done.
Note: Marketing Lessons from the Grateful Dead will be available in August, 2010.
I think this is an excellent strategy. I've also seen bootleg tapes of the Doors that were integrated into mainstream video and music.
As a designer,I've often sent a small piece of jewelry in a large order quite different from what the client purchased. They have often returned to purchase again.
Look forward to the book.
Thank you for bringing this book to my attention. I will read it as soon as it is available, as I am DYING for ideas on music promotion. I've just released a four-song EP with a friend and while I have posted songs on the sixty one, jango and my blog, so far my exposure remains, um, limited. I know I should play live but with the brain injury and all I really can't. Sigh. Oh, to be Dead!
Thanks for the heads-up, Edward, the book sounds like a great read.
Of course, technological developments (e.g. bit torrent) challenged the GD's whole "free trading" policy and sparked a huge controversy in the deadhead community back in 2005 when all shows were abruptly pulled off of archive.org. Ultimately the band decided to allow people to stream soundboards and download audience recordings, but it left a bad taste in many people's mouths, especially when instant live shows started being sold around the same time.
(If you're interested in the whole story, here's an excellent link: http://deadnews.blogspot.com/2005/12/overview-of-archive-controversy-short.html)
It's probably important to consider that the GD didn't create taping as a strategy to grow their fanbase. Garcia's famous POV on taping was something to the effect of: "Once we're done with it they can have it." Sure, they enabled taping and trading and created taper's tickets/sections, but I don't believe that it was a strategy that they developed as part of their "marketing plan". It just sort of happened.
I have a feeling the dead's decision to allow taping was less conscious than we are lead to believe. I think it just happened and it was too much of a drag to stop. Easier to just let it go. It was a happy accident w/ unintended consequences. I maybe wrong, but.
Being a veteran of quite a few shows, the Dead always made more money touring than selling albums. They were not 'radio friendly'. So this was a unique way for marketing and creating rabid fans. I had friends who taped at shows in the special section. DJ's also give away their music because they make their money touring. I have days and days of free music because of this.
I think this model works for every business. Its never the 'main product' given away for free. Its something that goes with the main product. The Dead's live concerts/parking lot experience with 1000's of people in an altered state of mind was their main product. Not their albums or even the music. Same as being at an Underground Rave or big Dance Club dancing at once with most people in an altered state can not be replicated when you are driving around in your car or through your IPod at the gym. This DJ's give away their music (and why I am always linking via Twitter their stuff)
Edward it would make a great case study to pick businesses and then create a strategy that uses this marketing model. Bars and Restaurants in the North East do this often with a free round of drinks or appetizer on the house, not assumed/expected but when it seems random and genuine its gives an overwhelming positive feeling towards the establishment.
It's a great model for a musician, but is it appropriate model for all business?
Most music listening is just for pure enjoyment - or "fare use" in copyright speak. But what if your are selling a product for commercial use? Would it be proper to give it away?
For example, would it be an advantage for a commercial photographer to give away prints in order to create a fan base, when his real source of income is companies and brands paying him for his photography to sell something?
I think the "free" model works for some things, but not all commercial ventures.
Thanks Edward. I love this post.
Books came off the printer yesterday and yours will reach you next week. Hope we live up to your expectations.
We're so jazzed about finally being able to talk about this project.
I think it still depends on a lot on what and to whom you are selling. For music, which relies on a large fan base,and where the use of music is largely for enjoyment, it makes sense to give away a lot, as long as people end up at your shows. But I think pictures geared for a commercial audience is a different story. Twenty thousand fans of your pictures doesn't mean much if no one has any intention of buying them.
Jay Blakesberg was the first name I thought of upon reading the conjecture that the free model wouldn't work for photographers. His experience obviously disproves that notion.
Also, while giving away their music played a key role in the Grateful Dead's success, that success was due to so much more than just letting fans tape and trade their shows.
Aside from their brilliant body of work and the fact that every live concert was completely unique, the Dead were remarkably adept at creating deeply meaningful experiences and forging DNA-level connections with their fans.
Just one example, albeit a very apropos one, would be the creation of Grateful Dead Ticket Sales (GDTS), a brilliant operation run by Steve Marcus that allowed fans to order tickets directly from the band, thereby sidestepping TicketMaster.
Fans were encouraged to decorate their inbound envelopes, which many did in an effort to stand out and receive juicy floor tickets in return. (Anyone doubting the rabid devotion of the Deadheads has only to visit the New York Historical Society to view some of those envelopes on display at the currently running Grateful Dead exhibition. Mindblowing.)
If you weren't necessarily a brilliant artist, you might mention in your ticket order that a particular date happened to be your birthday. I used to do this (of course I was honest about it!), and can report first hand that I was treated very kindly every time I did it. In March 1990, the Dead played the very first rock concert at the brand new Knickerbocker Arena in Albany (Frank Sinatra had opened the joint the week before). It was my birthday and I had four 2nd row, dead-center tickets, courtesy of Steve Marcus and GDTS, in my hand as I walked into the building.
*That's* how you build raving fans!
I am reasonably sure this book will cover other facets of the band's modus operandi than the free music angle. I'm looking forward to reading it.
William, I believe all businesses can learn from the Dead.
Our book has photos from Jay Blakesberg (for which we paid him). However, he gives away tons of free images. And he is a very successful guy who shoots for Rolling Stone and many other magazines and has several coffee table books and hundreds of limited edition prints he sells.
Check out the amazing band photo albums here -- and they are all free http://www.facebook.com/pages/Jay-Blakesberg-Photography/108844062482118?ref=ts
I may not give the product away. But look how Jello took hold at turn of century. They gave away recipes. Or Nike, they give away Nike +. Or Garmin. Same thing. On and on. Or even Old Spice. They give away joy and laughter and custom YouTube videos.