WWJD? (What Would Jerry Garcia Do?)

WWJD?

It’s a question that I’m sure is on the minds of many people. What would Jerry do?

Jerry Garcia, that is. And what he would do, if he were a credit union CEO, that is.

It’s a question that I’ve addressed in two recent conference presentations, first at the CU Directors Conference last summer, and then again to the Young & Free Spokesters’ meeting held the day before the CU Water Cooler conference last fall.

In hindsight, can you think of two more inappropriate groups to present this to? The first is a group of folks whose average age has to be around 70 (which, I guess is pretty close to the age of the Grateful Dead members, come to think of it).  The second is a group of folks who weren’t even born when I first starting going to Grateful Dead concerts.

Nevertheless, I tried to convey what credit union execs could learn from the Grateful Dead and Jerry Garcia.

I’m hardly the first to try. There’s even a book out about marketing lessons from the Grateful Dead. An interesting read, but I think it misses some key points. You can’t simply look back at what the Dead did and call it a “best practice” or “lesson learned.” The band had no clue what it was doing. It ended up making some good decisions (and a lot of bad ones), but good, modern management principles were hardly at play there.

I don’t quite get the interest people have in downloading other people’s presentations, but, if you want the slides, you can get it off SlideShare.

The key takeaway from this deck is about strategy. The real “lesson” from the Grateful Dead can be boiled down to one thing: Business model.

In the mid-60s, there was a prevailing business model for bands: Get a record deal, cut a record, and tour in support of the album.

The Dead failed miserably at that model. They said “screw albums, let’s try to make a living by playing live.” If you think their decision to let fans record concerts and freely share those tapes was based on some great foresight on the impact it would have, then you’re doing the same drugs they did in those days.

The point is this: They created a new business model. And they made it work.

Fast forward 45 years to 2012, and the financial services industry is in need of new business models.

Social media is not a business model. Pinterest is not a business model. Innovation is not a business model.

A business model is how you make money. What you charge for, and what you don’t charge for. Today’s prevalent business model in financial services is broken. What people pay for is misaligned with what value they get (if they get any value).

If Jerry were a credit union CEO, he’d create a new business model. And it would be a really groovy business model, I’m sure of that.

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What Bank Marketers Shouldn't Learn From The Grateful Dead

Have you seen the flurry of articles encapsulating the lessons that managers and marketers should learn from the Grateful Dead?

I have to confess to having contributed to this body of work, both on my previous blog, and while I was at Forrester.

Lost in all this advice, however, are the things that bank marketers shouldn’t learn from the Grateful Dead, like:

1. Letting customers sell burritos from the back of their VW Microbus’ in the parking lot. Well, hold on. On second thought, since there are so few people at the branches these days, maybe this is a good way to use all that unused space in the branch’s parking lot.

2. Letting customers record them. The Dead were famous for letting their fans record and distribute their concerts. Banks shouldn’t do this. The rudeness and incompetency of bank reps will end up in YouTube videos. This is not the best use of YouTube for banks.

3. Psychedelic light shows. Digital signage in the branches: Good. Strobe lights: Not so much. The psychedelic light shows at Dead concerts were outstanding. I’m not sure banks should try this, though. On the other hand, going back to point #1, if there are no customers in the branches, then strobe lights might help to hide this embarrassing fact.

4. Selling merchandise. The Dead made a fortune by licensing their logos, etc. which ended up on t-shirts and a whole host of other types of merchandise. I haven’t crunched the numbers on this one, but I’m betting that Citibank isn’t going to get rich selling Citi t-shirts.

5. Giving out LSD to customers. OK, granted that it’s been some 45 years since the Acid Tests, and that it really wasn’t the Dead that handed out LSD. But I did want to make sure that banks realized that this probably isn’t the best strategy for them to pursue.

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[Only Partially] Off-Topic: Customer Experience And Another Milestone Reached

Thirty years ago today I went to my first Grateful Dead concert. We drove the hour or so from Binghamton, NY to Syracuse and saw what could only be described as a nondescript, uneventful concert. About the only thing I remember from the show was Bob Weir coming out for the encore wearing a gorilla mask, which was appropriate since they played Warren Zevon’s Werewolves Of London.

Needless to say, it wasn’t my last Dead show. Thirty years later, despite the fact that the Grateful Dead haven’t existed as a band since 1995, I’m still as much as a Deadhead as I’ve ever been. My wife and kids certainly don’t understand. And, in fact, few non-Deadheads can really understand why Deadheads are as fiercely loyal and into it as they are.

It’s really simple, actually. It’s not just the music. It is (and was) the experience. If the Dead were a business (well, they were, and actually still are), you’d call it the customer experience. Going to a Dead show was an experience from the time you left your house till the time you got back. Which, of course, could be days (and for some people was weeks). All of today’s Web 2.0 talk about community only leaves me wanting to tell the Gen Yers who think they’re oh-so-community-minded that the Deadhead community has been going strong strong for more than 40 years now.

To be honest, I wasn’t really going to blog about this, but a blog post from Gene Blishen made me change my mind. Gene recently wrote about BarCampBanks, and had this to say:

“The format and the way the event is held is unique and it contributes a lot to its success. No one owns the agenda. Relationships have already been created through Internet means (blogs and Twitter). Meeting people face to face after you have know them online is a phenomenal experience. But each one that I have attended is unique. And I keep trying to nail down what makes it so. Maybe it is because we don’t really have such a strong expectation of what will come from the event. We already know that will happen. he expectation is the excitement of the discussions, the passion shown by everyone, the energy in just being in a room with such remarkable people. We thought we came seeking a holy grail but found that each of us had the capacity to create something unique in our relationships and our being together for this short time. The time you have is limited and you want to make the most of it. BarCamps cannot really be explained.”

I read that and thought “oh my god, BarCampBank meetings are just like Grateful Dead concerts. All about the experience. And completely inexplicable as to why the experience is so satisfying.”

Now when I do blog about something like this, I always start the blog title with “Off-Topic.” I’m sure you noticed that the title of this post starts with “[Only Partially] Off-Topic.” Here’s why:

There’s an important lesson for marketers in mine and Gene’s stories. Specifically about how to think about customer experience. There’s a paradox that few marketers really grasp. While the customer experience is the most important thing to customer satisfaction and loyalty, you cannot over-engineer, over-design or over-control that experience.

You have to establish a framework, some guidelines, and then just let it happen.

The Dead didn’t — and in reality, couldn’t — control every aspect, or even a fraction of the aspects that made up the Deadhead experience. They let their fans freely record and distribute tapes of their concerts, which helped engender an intensely loyal following. But they did (wisely) retain control of ticket sales and protected the sale of their merchandise. But you were free to sell food, stuff you made, and tons of other things to the tens of thousands of other Deadheads who showed up at every show. But you couldn’t sell their copyrighted merchandise, and contrary to popular belief, the strongly discouraged the sale (not the use) of illegal substances in and around their concerts, because they knew that that would hurt the potential for future concert opportunities at that venue.

Gene alludes to the same notion about BarCampBanks. There’s little structure, no pre-set agenda. But there is an expectation that participants will be able to contribute to the agenda and the discussion. That’s the framework. It’s like color-by-numbers. Here’s the guidelines — you provide the rest.

Marketers are right to obsess about customer experience. Unfortunately, too many equate it simply to Web site design. Or come up with consultantese titles like customer experience management, which they define as “capturing and distributing what a customer thinks about a company.” (Huh?)

It’s as if there’s a spectrum. At one of the spectrum is chaos — the absence of any controls, guidelines, or predefined experience elements. At the other end of the spectrum is the complete design and over-specification of the experience. The trick is finding the middle point.

Also unfortunate is the fact that there’s no simple way to find that middle point. With the “one ultimate question” mentality that exists, too many managers are in search of some simple holy grail that makes their job easy and their companies widely successful.

It doesn’t work that way. Just ask the Grateful Dead.

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What Financial Firms Can Learn From The Grateful Dead

A few years ago, I wrote something called “What Bankers Can Learn From The Grateful Dead.” This comment, from Ron Bensley Jr. on Modern Marketing, reminded me of that:

Latteland Community Credit Union (pseudonym) recently imposed an 8% fee for using their formerly-free coin machines. From a marketing and member-relations standpoint, this was a poor decision. The no-fee Latteland CU coin-counting machines were part of what made this CU special and unique to its members.”

My take: This isn’t just an issue about “nickel and diming” customers with fees (RB’s pun, not mine). It’s a business model issue. It’s a lack of understanding — on the part of the CU — about how it makes money. Not understanding your business model — and changing it when it’s succeeding — is worse than any transaction, service, or even data privacy mistake your firm could commit.

What does this have to do with the Grateful Dead? Back in 1965, record companies ruled the music industry. You made money back then (whether you were the company or the artist) by selling records. Bands went on tour simply to drive record sales. There were no festivals, no Bonnaroo, no Police reunions, no $150 concert tickets. And you certainly couldn’t bring a tape recorder into a concert to tape it. Not that you’d want to — most concerts were simply faithful reproduction of the albums.

The Dead turned this business model on its head. They toured incessantly. Played a different show every night. Sometimes for four or more hours. And let fans tape concerts and freely share those tapes. They cut studio albums simply to fulfill contractual obligations.

They innovated a new business model in their industry and built what the Net Promoter groupies call “customer advocates”, what Ken Blanchard calls “raving fans”, or what the rest of the world calls “Deadheads.”

The lesson? They never changed their business model. They didn’t say, after 10 years, “you can’t record concerts anymore” or “we’re going to stop playing concerts and start recording more in the studio and support ourselves with record sales.” (They did take a break at the 10 year mark, but when they resumed, they pretty much toured regularly for the ensuing 19 years).

By changing it’s business model — how it makes money — Latteland is risking what’s made it successful. And it isn’t alone. Colin recently commented on Barclay’s decision to impose a fee on cardholders with inactive accounts. By doing this, it’s changing its model — with potentially devastating effects.

These firms need to take a lesson from the Dead. I’d even be happy to share a few concert tapes with them. And share part two of the lesson: Vertical integration (the Dead took over their ticket sales and merchandising efforts).

Footnote: A few months after I published the brief in 2001, a client (a bank) that wasn’t renewing its contract cited the brief as a reason why. I bring that up because there’s an executive of that bank that has left comments on this site before, and might be reading this — and I wanted to remind him of that.