I suspect many of you are now familiar with The Long Tail strategy first coined by Chris Anderson in 2004. Essentially, the notion suggests “selling less of more.” I view it as the 80/20 rule in reverse, and it’s often the topic of heated discussion between direct marketers and their accountants.
The strategy focuses on the inherent competitive advantage of a B-to-B (or B-to-C, for that matter) catalog company stocking as many items as it can in order to compete with retail stores or “net gnats,” who pick off your best-selling items and sell them online at a discount. A retail store’s space is limited, but a catalog business’s is not — at least relatively. Of course, the debate comes when the margin gained on unique — some might say obscure — items don’t pay for their carrying and promotion costs. The accountants would say, “Get rid of them.” The smart marketer, however, knows to look at other criteria before that decision is made. For example, consider the power of those rarely sold items to gain new customers who in turn go on to provide a high lifetime value.
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How’s Your Long Tail?
I suspect many of you are now familiar with The Long Tail strategy first coined by Chris Anderson in 2004. Essentially, the notion suggests “selling less of more.” I view it as the 80/20 rule in reverse, and it’s often the topic of heated discussion between direct marketers and their accountants.
The strategy focuses on the inherent competitive advantage of a B-to-B (or B-to-C, for that matter) catalog company stocking as many items as it can in order to compete with retail stores or “net gnats,” who pick off your best-selling items and sell them online at a discount. A retail store’s space is limited, but a catalog business’s is not — at least relatively. Of course, the debate comes when the margin gained on unique — some might say obscure — items don’t pay for their carrying and promotion costs. The accountants would say, “Get rid of them.” The smart marketer, however, knows to look at other criteria before that decision is made. For example, consider the power of those rarely sold items to gain new customers who in turn go on to provide a high lifetime value.