This weblog entry is associated with a presentation created for a webinar on internet marketing. The idea is to adapt the dovetailing technique to the area of internet marketing, especially for getting the “Long Tail” under better control.
The phrase “Long Tail” was introduced in 2004 by Chris Anderson. He described business models like Amazon’s one by stating that larger volumes can be sold if the product suite not only contains some bestsellers but a large number of even niche product. In statistical terms, a distribution consists of a high-frequency population and a low-frequency (better term would be amplitude instead of frequency) population that gradually “tails off”.
The low-frequency part, the long Tail, might deliver a substantial part or even a majority of the sales. A quote of a later book title from Anderson describes this with another short phrase: Selling Less of More.
Now what is the problem ?
Selling requires marketing and sales efforts. The Long Tail is not magic. It is long – that creates the overall high sales numbers. And the statistical distribution looks like an unterminating graphic, going asymptotically to zero. Let’s assume that we constantly want to increase volumes on the whole product suite, so we constantly want to put efforts intop selling more items of every products. In abstract units of efforts let’s look at this example.
Product 1 is sold 1000 times per period. We currrently put 1000 “units of effort” into it (let’s assume this is efficient) and want to increase this (and assume again that it keeps being efficient, that means the effort “converts”).
So we would like to add 100 units of efforts. Next thing is product 2. We might want to put 95 units of effort on it. Then once again 95, then several times 94 and so on.
Practically things can be done parallely if there are enough resources. However since resources are not endless practically it is not necessary to consider parallel work because the concrete numbers are not relevant (whether products 1-4 are handled parallely and then we look at 5-8) for the purpose of this little weblog entry is the same like looking at product 1 and then product 2 and so on.
Continuing the example we come to the important question. If we put efforts into product 3, product 4, product 5 and so on, when do we come back to product one to start the second “loop” of enhancements ?
Practically there is no endless number of products, but anyway it will not really be suitable to look at all niche products before we come back to the main ones. Secondly in a growing business, especially a Long Tail business, it makes sense to increase the number of products constantly.
If we look at a graph with the product on the x-axis and the frequency of selling (or the efforts to be put into it) on the y-axis, we see the dilemma: we need to extend the graph into both dimensions. This is not linear – when should we stop going up and start going to the right and the other way round.