Listen To The Band

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.

This article was originally published in the June 1999 print edition of Entrepreneur with the headline: Listen To The Band.