Finding Your Place in the Long Tail
Think about keywords. These are terms people search for online. Take the most popular keyword and place it first in line and then the next most popular and so on. You will generate a curve which starts with very high numbers and quickly declines and tails off. Obviously, the tail is massively long because of unlimited possible keywords. Marketers call this the long tail.
History of the Long Tail
The same applied in the 1960s and 1970s. Supermarkets came onto the scene and opened up shelf space to a range of products. They could accommodate more than corner shops but shelves were finite. They held a few products from the short head and very few from the long tail.
If you were in the long tail, your only option was to market locally. You could try a market stall or door-to-door or even open a specialist shop.
With the Internet, the world changed. Shelf-space online is infinite. Amazon can always add more books. However, there are only so many slots for businesses that accommodate everything.
How much impact does the Internet have on local businesses? It increases opportunities for small businesses and some have a global reach. By small business, I don’t mean to imply turnover is small. A few do very well with a few staff from a single office anywhere in the world.
This leaves local businesses with pretty much the same challenges they had in the past. Whilst the Internet can help them, for many it is a distraction.
Finding Your Short Head
- What is the problem your product or service solves?
- What restrictions do you impose on your market? (Sometimes called your niche, this is likely to be geographical plus perhaps demographics such as age or sex.)
- Are you aware of fundamental beliefs you hold, likely to attract like-minded people?
Strategies in the Long Tail
No local traders dominate a sector of the market to embrace the long tail in its entirety. Big business dominates the most popular products and services.
You need strategies that help you develop a short head inside the long tail. Identify and build your own market, using whatever skills you have. There are people out there who need your offer but they don’t know they need it or that you can meet their need.
First, don’t be deterred by the success of others. The very best are likely to charge very high prices. Remember these are small businesses with low capacity.
Keep your prices below the market leader’s and you can increase your prices. Then you may find a niche with those who cannot afford the market leaders. Resist the temptation to lower your prices to undercut your competitors. This results in a race to the bottom and hurts everyone’s business.
If you need to build your reputation, don’t expect your prices to meet those of the market leader. The market leader is likely to have overheads you don’t have at the start of your business.
There is another reason you should not lower prices. Aim not to undercut but to collaborate. There are many opportunities and the main barrier is to think of competitors as rivals. If they have done their work, they have a clear offer, a market and worldview different from yours. Working with people in similar businesses can be beneficial because together you can raise awareness of the problem you solve and perhaps offer joint packages, more effective than working alone.
Following this thirtieth post to encourage coaches to reflect on relational marketing, take this opportunity to sign up below. You get a weekly round-up of my posts and a pdf about how to make sure you are charging what your business is worth.