Does your business have a long tail?

Filed in archive Information About on September 23, 2009

© Sister72


It time for some more vocabulary! Ever heard of the "Long Tail Effect"? You may have hear the term before in a discussion of online marketing but you're not quite sure what it means (or what it might mean to your business).

The Long Tail concept is based off of an article written by Chris Anderson for Wired magazine. The original article is based around how Amazon makes money. It uses the sale of books as an example.

I won't regurgitate the article, but in essence it points out that there are plenty of stores that sell "mainstream" items. These are the popular items that lots of people want. Before the internet, most people wanted to sell these kinds of items because they had the largest market.

Now, thanks to the internet you can make good money without selling the popular things. Anderson discusses how stores like Amazon didn't just carry the mainstream items but also the rare and niche items. Because now, those niche audiences can find you quickly online instead of searching every rare book stand.

The concept here is that you can cater to a lot of niche communities and make just as much or more than the mainstream culture merchandise. Anderson points out that companies like Amazon, iTunes and Netflix do this all the time. They have the rare items that only a few people want, but those people are faithful buyers and return regularly.

The point is that technology allows you to cater to a niche without worrying about location. Its arguable that every industry has its own long tail, the tiny parts of the market that can stretch out forever. You can see the graph of Anderson's long tail here.

Do you have a long tail market? Are you actively engaging it?