Well actually it’s not; marketing is more powerful than ever these days, as the latest Old Spice campaign can attest! But, who started this whole viral, user-generated, guerilla, social marketing concept anyways? Lately people have been saying it was the Grateful Dead.
Unfortunately, I never became a Deadhead. But, I did admire the stuffed animal Dead Bears during trips to Newbury Comics, with my dad and brother, back in my middle-school days, and even bought a purple-and-green one. Little did I know, I too was part of their strategy. The CEO of HubSpot recently co-authored a book entitled “Marketing Strategies of the Grateful Dead,” which was reviewed in the Boston Globe last week.
They write that the band cultivated a loyal following by giving things away — letting people record their concerts and freely distribute music, going around their promotions department and building their own mailing list, and even letting people buy premium tickets by mail (what, mail? yeah in the “olden days” you had to get tickets right at the box office, so this was pretty cool). They also encouraged “artisans” to “co-opt the band’s fan base by selling compatible, often handmade, products at performances,” says the Globe article, hence my Dead Bear.
To add to the Dead “buzz,” an article in the March issue of The Atlantic talks about how it was the Dead’s lyricist, John Perry Barlow, who made this connection way back in 1994, in Wired Magazine, saying that “the best way to raise demand for your product is to give it away.” He went on to say in the Atlantic article “if I give my song away to 20 people, and they give it to 20 people, pretty soon everybody knows me, and my value as a creator is dramatically enhanced.” That’s a pretty good Customer Value Proposition if you ask me!
In terms of connecting with their market and creating loyal customers, the free model worked pretty well for the Dead. But, how is it working today for other companies? Well, consider how we are all marketed to online. About five minutes ago, I got an email from Virgin America saying that if I buy a plane ticket in the next 24 hours they will donate $5 from my purchase, and for every ticket sale, to an educational cause. Wait, I have to pay? Well, I think it’s pretty popular because I just clicked on the link and I’m still waiting for the page to load. Or, when I followed one of my favorite clothing companies on Twitter and they sent me a 25-percent-off coupon; thanks guys! While I’m not getting “free” stuff, I already know which dress I’m buying with the coupon, so I’d say the strategy is working pretty well!
What do you think? Can companies create brand loyalty by giving things away? Or is the Dead’s strategy just going to Hell in a Bucket?
One good contemporary example might be Apple and its free apps. Of course the Apple devices are not cheap, but they build a lot of brand loyalty with the downloadable apps., many of which are free.
Taking it a step further, Google has done pretty well with free search.
Couple of current examples where companies build value and loyalty through “free” services to consumers.
Barry
Great post Charlotte! My feeling is that free marketing is a great way to gain visibility and “share of mind”, but often fails at gaining “share of wallet”. A quick example from my experience:
I manage marketing efforts for two local dance studios. I produce videos of various performances by the dancers and give free DVDs and video links away to students. This added value increases loyalty among customers. It also builds visibility as these students share the videos with their friends and family.
On the other hand, we tried giving away a free month of dance classes to anyone who refers a new student (an attempt to increase enrollment). We distributed this info on a certificate to over 300 active students, and not one redeemed it!
The Dead’s strategy is definitely alive and well today, even in the music industry. Amanda Palmer, a Boston-based solo artist and member of the Dresden Dolls, is notorious for reaching out directly to her fans and being extremely generous with her content – and her fan base is nothing if not loyal.
Jeff, I think the key to making these promotions do help you grab that share of wallet is looking at your business model and figuring out how you can use free or discounted services to push your high margin, or highest demand, products, while delighting the customer will extras. So for example, concert ticket sales might have been the top priority for the Grateful Dead, and their customers essentially acted like marketing agents for ticket sales.
Really interesting post, love the blog!