A tale long ago

I was just going through my files and stumbled upon my presentation materials for one of the conferences which I was an invited speaker. This was in early feb 2005 and in my session, I used a graph that pointed to the long tail and was actually speaking about how the customers in the fringe will be the new drivers for revenue, achieved through targeted marketing and new ways of niche customer segmentations.

Of course I am in no way implying that I came up with the marketing in the long tail idea but I'm just really happy that my thoughts were on the right track as it was later confirmed in Colloquy.

Visual from colloquy.com

Anyway, "Long Tail" is a concept formally put forth by Chris Anderson in his WIRED article. The concept basically draws our attention on the inverse relationships found in power laws and pareto distribution, i.e., rather than just thinking or focusing on the 20% that drives 60% impact, the potential of the 80% that's previously considered as low impact drivers can actually deliver even a bigger impact than that's generated from the first 20% (under the right conditions). Anyway, here's how Anderson puts it and what is basically arguing is that products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough.

To me the real impact of the long tail is putting a new perspective niche markets and previously labeled un-viable customer segments. It reinforces the concept that fortune can be made at the "Bottom Of The Pyramid" (BOP) premise put forth by CK Prahalad (but the principles prescribed by Anderson and Prahalad are nevertheless different). With that, let's continue to challenge ourselves and go make money from where no man has made before.

Visual is from wired.com