Viewing entries tagged
the long tail


Een "Long Tail" maak je zelf ...

Het concept van de Long Tail heeft sinds Chris Anderson het introduceerde in 2004 heel wat kritiek te verduren gekregen. Meestal van mensen bij wie de schrik om het hart sloeg dat het business model dat ze reeds jaren hanteerden zijn motor zou verliezen als alles "Long Tail based" zou worden. Maar de logica is zo kristalhelder, en de onderzoeksresultaten van Anderson zelf waren zo duidelijk dat niemand er écht in slaagde de theorie onderuit te halen.

Nu een paar jaar later ook de minder bevlogen criticasters de Long Tail ontdekt hebben laait de kritiek weer op. En het kost hun niet veel moeite om tegenbewijs aan te dragen. Er zijn tal van voorbeelden waar de Long Tail niet is doorgebroken, waar klassieke business modellen perfect overleven zonder dat hun inkomsten wegvloeien naar niche-initiatieven. Will Page, chief economist van de MCPS-PRS Alliance, een organisatie die royalties int voor artiesten, kwam recent met een onderzoek (zie onder andere dit artikel in de De Morgen) naar buiten waaruit bleek dat de het internet de hits net nog groter maakt en dat ze dus de plaats niet moeten ruimen voor veel kleintjes. En de man heeft waarschijnlijk gelijk. Maar dat betekent niet dat er geen Long Tail fenomeen zou bestaan ...

De Long Tail is een economische wetmatigheid die naar boven is komen drijven met de komst van het internet en het feit dat de marginale kost om een extra item op te nemen in je online collectie zo goed als nul is. Maar die wet geldt ook aan de kant van de consument. Ook hier is er een soort marginale kost om een niche-product te ontdekken. Die zogenaamde kost bestaat uit "tijd". Tijd die de consument nodig heeft om die song die hem of haar ligt te ontdekken in die eindeloze collectie, tijd om te grasduinen in honderd duizenden boeken, tijd om de leukste T-shirt te vinden, enzovoort.
In het geval van een fysieke winkel koopt de retailer die "tijd" af met een aangename winkel, promoties, entertainment, advies en informatie. Een online retailer die van het Long Tail effect wil profiteren moet ook werk maken van de aanbod kant. De consument moet geholpen worden bij het zoeken in al die producten zodat hij in een minimum van tijd de juiste producten in de long tail vindt. Pas dan krijg je ook een long tail in de verkoop.

Het volstaat met andere woorden niet om een schier eindeloze collectie aan te bieden. Een website met een homepage vol bestsellers, een eindeloos menu met standaard-termen en een zoekfunctie die enkel werkt als je al weet wat je precies gaat kopen levert natuurlijk alleen verkoop op van die titels of producten die al op één of andere manier populair zijn.

Een long tail e-commerce site moet inspireren en mensen uitnodigen om verder te kijken dan de vitrine. Bezoekers moeten elkaar kunnen helpen en adviseren over wat zij goed vinden, de navigatie met duidelijk zijn en snel toegang bieden tot ver in de long tail van je collectie, de zoekfunctie moet meer doen dan standaard antwoorden uitspuwen. Een Long Tail business moet je met andere woorden zelf bouwen, die komt niet vanzelf uit je online shop gerold.



Four things to do in a Long Tail economy

A few months ago "The Long Tail" became available in Dutch, but since then I haven't heard much about it in Belgium. Until this week an article appeared in De Morgen, better late then never (nothing on line, sorry).

Anyway, I thought this was a good moment to blog my view on how a company should integrate this new economic reality in its business model.

The Long Tail, or rather the evolution of technology that is driving it, enables companies to get rid of the 80/20 logic. So you can stop 'SKU reduction', 'Product pruning' and 'Focus on the major accounts'. That is, if you succeed in putting technology to work to become a lean & efficient enterprise. Automate your processes to the max, exploit available business intelligence and optimize customer relationships through the web.
By doing so, you can increase your offer and win more happy customers.

A larger offer requires that you help customers to find what they want. There are basically two ways to build filters:
- Technology: Use state-of-the-art search technology or build the most intuitive navigation possible.
- People: Engage your customers to share their feelings and opinions about your products, thus helping others to find the product they need.

In the Long Tail of communications, the amount of clutter is infinite. Therefore traditional advertising will not work. The answer is in inviting consumers to join you, rather then trying to yell at them as loud as your budget allows.
So make sure you search engine ranking is OK, offer on-demand information (RSS) and stimulate conversations.

With a Long Tail of competitors, it gets increasingly difficult to bring in new customers. And with a large offering from your own side, every customer bears a bigger lifetime potential then before.
Reason the more to invest in the customer relationship. Take into account their preferences and do not bombard them with irrelevant messages. Be honest and respect the people you have a relationship with.



Micro Telco ... Another Long Tail Story

Telco 2.0 is born!

I spent a few days in Morocco recently and had the opportunity to meet a number of fascinating people. Our host was Abdesslam Sijelmassi, together with his lovely wife Houda were great hosts. While we were getting acquainted we talked about each others business, and I discovered another great example of "The Long Tail" in practice.

Abdesslam stems from family of entrepreneurs with a big hart for their country and it's people. One of the activities Abdesslam oversees does the following:
Using mobile technology they are building a network op private phone shops. Not to sell phones, but offering phone calls at a low price. You have to know that in Morocco many people have a mobile phone just to receive calls. Calling out is way too expensive, so they look for a cheaper alternative where they can simply pay a few Dirham (local currency) and make call. This is also a way for people there to keep their budget under control.
Now, of course there are phone shops all over big towns, but these will not cover the whole city (especially not the poorer parts), and they are definitely not present is small rural communities. And that's where "IlaïCom" comes in with project LiajliCom.

What IlaïCom does is setting up a network of micro entrepreneurs with a low cost phone unit. That unit is sold to small entrepreneurs and they help them with microcredit (much like Nobel Prize winner Muhammad Yunus). One installation costs about € 400. Along with the phone and point of sale material (mainly a sign to put outside the shop), comes a phone credit of € 200 (included in the setup cost). People starting a unit get a microcredit, which allows them to start making money from day one. The unit is connected to the phone network though mobile technology which allows them be active even in remote rural areas. Everything is extremely easy to operate, among the customers there are 70 year old women who never used a phone before. Note that many of the entrepreneurs are illiterate.

Abdesslam is constantly building and improving the model. Phone credit is prepaid and coached by IlaïCom through a call center so entrepreneurs do not fall out of credit and business keeps running. This way they succeed in moving people from a poverty situation to what they call 'precarious' and those living in a precarious situation are lifted up to an acceptable standard of living.

Today they are working on some novel ideas to further build these micro businesses. Motorised wheelchairs with a unit attached allows handicapped people pay for their wheelchairs. Another direction is to seek synergies with other sectors such as fast moving consumer goods. They have build a phone unit that is completely Coke-branded (looks like a huge can of Coke). Coke may sponsor these units, and add a small fridge to the concept with a starter-kit of drinks. Thus allowing the shops to build also a business of fresh drinks, and some advertising income from Coke to pay for the phone equipment.
An idea very relevant to Belgium builds on the tradition of emigrated Moroccans to send part of the money they make in Europe to their families. IlaïCom is now looking for ways to convince these people to invest in a phone unit for their families in Morocco, and then add phone credit on a monthly basis. Adding the credit can be done fully automatically via the Internet.

I thought this was a very interesting story, combining business with social development of a country. However it wasn't until I put some numbers together that I realized that this a perfect example of "The Long Tail". Today there about 3500 IlaïCom phones spread over Morocco, and Abdesslam estimates there is potential for at least 100 000 units. They already represent a considerable share of Meditel's public phone turnover (Meditel is the N°2 telco operator in Morocco). And this is business they would never have had if it were not for IlaïCom. Just consider the huge untapped potential of all these people who have no access to telecommunications services because nobody bothers setting up a traditional phone store. Thanks to intelligent use of new technology, IlaïCom is opening up this market.
Anther typical feature of Long Tail markets is that we see mini-tails appear within the long tail. In general there is potential for a phone for every 3 to 500 people. But in each region there are 'top selling locations' such as those places where many trucks come by. These phone shops can even afford to install a second unit.

This is truly one of the most fascinating I came across in my life. It's a Long Tail story, with a sound economic model (people are making money here, no bubble) and at the same time it Morocco and it's people move forward and saves people from poverty.



"Any publicity is good publicity, as long as they spell your name right." Not anymore!

10 years ago I set up my first on line project. It was a website for my employer (at that time) Samsonite. In a nostalgic mood I went to look for the old site on (The Wayback Machine). I read the spectacular testimonials we had collected then, ah … the good old days.

( – December 2006)

Being able to trace back that site is fun, but it is especially typical for the digital age. Whatever you or someone says about your brand keeps floating around on all kinds of servers. Everything remains searchable, readable and retrievable. The parallel digital world called Internet is one gigantic long tail of conversations. And in these conversations all products, services and brands are subjects, positive and negative.

This marks a fundamental change, away from the volatile mass media which used to fight for our attention. A newspaper article ends up in the paper basket after one day, TV spots tickle your brain and then disappear for ever, billboards flash by in a split-second and a week later there is a new message there. Not with digital media however. News Sites, blogs and also company websites compose an endless archive in which anyone can keep on digging. Google shows the way. Viral movies and consumer generated content remain available on YouTube or on personal blogs or myspace sites.

Discussions on blogs and forums about the pro’s and con’s of your products are a welcome addition to your glossy brochure or professional website.

Obviously, also the bad publicity remains available. Nobody buys a digital camera without at least reading 10 of the 2 million search results you get at a click of the mouse. 9 out of those ten are not written by the producer. It goes even further then that. If somebody discusses a camera on a blog you happen to follow you’ll be inclined to believe this opinion as this is your community, these people think the same way you do. The community-experience is much stronger then an occasional ad in the paper.

All good interactive communication should actually build on this Our image of a brand is no longer build exclusively through a sophisticated selection of adverting and PR impulses. The image that will make us decide in a blink whether we give attention to a brand, is constantly shaped by countless pieces of (digital) conversation.

So forget about the old saying “any publicity is good publicity”. Today every piece of digital conversation shapes a part of the big story that will determine your brand image. When consumer starts considering a possible purchase, one mouse click give access to the opinion of countless people. And if the balance of good and bad publicity is negative, there will be no sale.

So it’s time to start monitoring the on line conversation about your brand and intervene intelligently where needed.