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Context, Relevance and The Long Tail

Plane rides are a good way to catch up on email, and reading.  After my battery died on the way out here, I blitzed through Chris Anderson’s The Long Tail.  Highly recommended.

One of the themes of the book is the technologies that enable Long Tail markets.  There are technologies like the internet, and catalog shopping before it, which effectively eliminate distance, and enable markets of like minded individuals as opposed to mass markets.  And, there are technologies that enable highly personalized choices, such as Google, Amazon, and EBay — the services which enable better and relevant searches for the stuff you care about, based on algorithms which are highly efficient, and also highly personalizable.

These work easily in a clicks world, but not so easily in a bricks world.  As Anderson points out, it’s not so easy, on the fly, to rearrange the order of the tea (for example) on your grocery store shelf, and the supply is limited by whatever the store has at hand.  That’s not the case on the internet. 

Each of Google, Amazon, and EBay contain, in their own right, relevance engines.  Just as the iotum engine helps make highly personalized choices about how to handle calls, these use context and preferences to enable highly personalized choices for their customers.

Telephony is ripe for a Long Tail strategy.  My friend Chris Wood proposed such a thing in a guest post here some time back.  His thesis was that some conversations are more valuable than others, and Long Tail strategies would uncover that value.  That certainly was the view behind the Skype acquisition.  If the Long Tail is about niche markets, however, then the Long Tail of telephony isn’t necessarily only about uncovering commercially valuable conversations.  It’s about uncovering niches! 

In a world where basic communications services routinely cost nothing, or next to nothing, this makes sense.  Whether your business model is serving advertising to those folks, or charging for premium services, you have to find ways to reach these niches and provide services they want to buy. 

Niche markets are also the biggest blind spot that the incumbents have.  To most incumbent telco’s, and to most VONabees (Vonage clones), phone service is phone service is phone service.  You can have it any colour you like, so long as it’s black.  The marketing departments of these behemoths are only interested in new services which are broadly applicable to the entire spectrum of their customer base.  Aside from voice mail, which is 20 years old, what was the last broadly accepted service introduced to the telecom market?

The incumbents can’t, or won’t, think about niche markets.  They likely can’t execute a Long Tail strategy.

Others, however, are doing this already.  Just recently, for instance, I was introduced to an Israeli businessman who is building a global VoIP service for jewish people.  He’s brewing up a mix of affinity marketing, and targeted services, just for this small, but lucrative market.  Another example, Vivox, is building voice services targeted at gaming and dating.  And, there are many many more like these two out there.

So, if you’re entering the VoIP market, think like a niche marketer.  There’s no point in tackling the short head with a mass market service.  Try the Long Tail instead.

{ 2 comments… add one }

  • Jason Drohn August 16, 2006, 11:37 am

    I read the book as well over the weekend and it is fantastic. A couple days ago, I wrote an article about a new film to dvd technology that Hollywood actually approves, which has the potential to transform the dvd sections inside retail environments into kiosks. Hence, applying the long tail strategy to the bricks environment. You can see the post here:
    http://blogtheinternet.com/2006/08/12/new-film-to-dvd-technology/

    Thanks for you great coverage by the way!

  • Alec August 16, 2006, 8:51 pm

    Excellent piece Jason! You’re so right about the price. If Hollywood goes the route they did with VHS originally (charging an exhorbitant price comparable to theater prices) then this idea will die. But if they’re reasonable…

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