The Social Customer Manifesto

Moving Your Niche

(Continuing the conversation started here.)

About halfway through reading The Long Tail, I was cold-cocked by a thought...I've read this before, but in reverse. Back in the early-to-mid 90's, there was a a book written by Kevin Kelly (who was, interestingly enough, Editor in Chief of Wired at the time) called Out of Control. (n.b. Out of Control has been one of the most influential books I've read, and directly drove my interest in artificial intelligence, genetic algorithms and other phenomena at the intersection of technology and biology.)

Kelly's writing introduced me to the work of W. Brian Arthur, who is best known for his theories around increasing returns. Brian Arthur's work on increasing returns explains why the blogging power law (and, in fact the Long Tail shape itself) forms. Arthur writes:

"Customer Groove-In. High tech products are typically difficult to use. They require training. Once users invest in this training—say the maintenance and piloting of Airbus passenger aircraft—they merely need to update these skills for subsequent versions of the product. As more market is captured, it becomes easier to capture future markets.

In high-tech markets, such mechanisms ensure that products that gain market advantage stand to gain further advantage, making these markets unstable and subject to lock-in. Of course, lock-in is not forever. Technology comes in waves, and a lock-in...can only last as long as a particular wave lasts."

Put more simply, increasing returns can be trivially stated this way: "Thems that gots, shall gets." So, based on that, I would posit the following: While following a recommendation down the Long Tail drives demand down the curve -- to the right -- increasing returns moves a niche to the mainstream -- up the curve, to the left.

So, assuming that one wants to move his or her niche to the left up the curve, the big factors to success are driven by the following:

1) What is the "metric" that is being used to define the shape of the curve; and
2) How do I get more of it?

For example, Technorati gets slammed when they create their "Top 100" lists. Their list uses a single metric, "inbound links," that turns the "Top" list into a raw popularity contest, without taking into account other dimensions that might define something as a "top" blog. (But, it is what it is.) Now, that being said, if the "success" of your niche is tied to its findability in the tail (and it almost certainly is), then there are compelling reasons to try to move your niche to the left. The closer to the "head" of the Long Tail your niche is:

• The more likely a "direct" search will find your niche.
• The more likely a recommendation will find your niche.

Increasing returns would suggest that both of the above items increase the chance that your niche will then be even more findable in the future, and move even further to the left. For example, this article by Dave Sifry (CEO of Technorati) gives his thoughts on how to make your blog more popular. His points echo the above sentiments.

Related:
Long Tail Thoughts
Getting found in the Long Tail: Direct
Getting found in the Long Tail: Recommendations

Getting Found in the Long Tail: Recommendations

(Continuing the conversation started here.)

While ensuring that searchers can find you in the Long Tail is good, being found by someone who is already predisposed to a connection is even better.

What I mean by this is the following: a visitor who finds your wares via a direct link already knows what he or she is seeking. However, the abundance of the Long Tail means that there are myriad things in the tail that someone might love, only if he or she knew it existed! How do enable this kind of discovery? Recommendations and collaborative filtering.

An example might be handy. So, I think Liz Phair's first album, Exile in Guyville, is the bomb-diggity. (Also, although I now live on the West Coast, all Chicago natives, regardless of current residence, are required to love Exile, lest their 312 credentials be immediately and unceremoniously revoked.) Now, if I go onto Amazon and look up Exile in Guyville, I find the following:

Liz takes me to Veruca Salt.

Veruca Salt takes me to Nina Gordon.

Nina Gordon's last release incents me to go to her home page, where I find Nina Gordon doing an acoustic cover of N.W.A's Straight Outta Compton. (Fantastic, and fantastically NSFW unless you're wearing headphones).

So, our traversal down the Long Tail went like this:

Liz Phair > Veruca Salt > Nina Gordon > Nina Gordon's cover of Straight Outta Compton

Now, never in a million years would I have gone to Google and done a search on "sultry-voiced chanteuse doing an acoustic cover of an anthem of gangsta rap." Yet, that's exactly what I found...and I love it.

The key point here: if your niche in the Long Tail is truly one-of-a-kind, it may be so unique that no one would ever even dream to search for what it contains. The only way someone will find it is through collaborative filtering (a la Amazon) or through word-of-mouth recommendations from a trusted source that traverse the tail.

Related:
Long Tail Thoughts
Getting found in the Long Tail: Direct
Moving Your Niche

Getting Found in the Long Tail: Direct

Per my earlier post, have just finished reading The Long Tail, and the book triggered a couple of key questions for me. Those questions were:

• If what I am marketing is in a niche in the tail, how do prospective customers find me?
• Being in a niche is great and all, but it would be nice to be closer to the head of the curve...how do I move my niche to the left?

The first way of being found by prospective customers (readers, listeners, etc.) is the "direct" approach. That is, through some means, the customer drops "directly" into your site, or directly finds your product, most likely by way of some type of search engine. (This could be one of the Google-Yahoo-MSN search engines, or by some type of keyword search within an environment such as iTunes.)

This type of discovery has a couple of different traits. On one hand, it may result in the highest number of "raw" visitors coming to your website. For example, in looking at the referrer logs for this blog, a vast majority of the incoming traffic to the blog itself comes not necessarily from links from other blogs, but instead is "organic" traffic driven primarily from Google, where someone has searched on a term such as "Customer Managed Relationship" which led them to this post. On the other hand, this may not necessarily be the "best" traffic, where "best" is defined as "a visitor to the site who is philosophically aligned with the ideas here, and passionate about connecting with customers." Rather, the visitors who arrive as a result of a "direct" approach may have significant alignment with the details or topic of a particular post, but may not necessarily be aligned with the overall gestalt.

Now, that being said, there is potentially significant value in having many visitors drop by a site, even if they are just "passing through." (This is not a radical thought.) While some portion of the visitors who arrive via this mechanism may only be connecting with the details of a particular portion of the site, there will be some subset who could be classified as the "best" type of visitor, as defined above. As such, making it easy for even the drop-in type of visitor to find a site is important. The main way to help ensure that this kind of visitor can find you in the Long Tail is ensuring that all aspects of a site (or other online artifact such as a song, video, etc.) is set up to be search-engine friendly. That means writing well, ensuring that the keywords that a visitor might be searching on at a later date are included in the body and title of the pages, that posts or artifacts are tagged with keywords (if appropriate) and, in general, follows the tactics of successful search engine optimization (or "SEO," as it's commonly known).

Related:
Long Tail Thoughts
Getting found in the Long Tail: Recommendations
Moving Your Niche

Long Tail Thoughts

Just finished Chris Anderson's book The Long Tail, and had a few thoughts. The "Long Tail" concept, of course, is defined thusly:

"What happens when everything in the world becomes available to everyone? When the combined value of all the millions of items that may sell only a few copies equals or exceeds the value of the few items that sell millions each? When a bunch of kids with no profit motive can record a song or make a video and get the same electronic distribution for it as the most powerful corporation?

The Long Tail is really about the economics of abundance, and entirely new model for business that is just starting to show its power as unlimited selection reveals new truths about that consumers want and how they want to get it."

Overall a good, quick, solid read. However, while reading through the book, it triggered two primary questions for me:

• If what I am marketing is in a niche in the tail, how do prospective customers find me?
• Being in a niche is great and all, but it would be nice to be closer to the head of the curve...how do I move my niche to the left?

Some thoughts on those two questions in the following posts.

Related:
Getting found in the Long Tail: Direct
Getting found in the Long Tail: Recommendations
Moving Your Niche

Blogging Power Law Dynamics

Great article on blogs and power law dynamics that showed up on my desk this morning, from New York magazine.

"When [Clay] Shirky compiled his analysis of links, he saw that the smaller bloggers’ fears were perfectly correct: There is enormous inequity in the system. A very small number of blogs enjoy hundreds and hundreds of inbound links—the A-list, as it were. But almost all others have very few sites pointing to them. When Shirky sorted the 433 blogs from most linked to least linked and lined them up on a chart, the curve began up high, with the lucky few. But then it quickly fell into a steep dive, flattening off into the distance, where the vast majority of ignored blogs reside. The A-list is teensy, the B-list is bigger, and the C-list is simply massive. In the blogosphere, the biggest audiences—and the advertising revenue they bring—go to a small, elite few. Most bloggers toil in total obscurity.

Economists and network scientists have a name for Shirky’s curve: a “power-law distribution.” Power laws are not limited to the Web; in fact, they’re common to many social systems. If you chart the world’s wealth, it forms a power-law curve: A tiny number of rich people possess most of the world’s capital, while almost everyone else has little or none. The employment of movie actors follows the curve, too, because a small group appears in dozens of films while the rest are chronically underemployed. The pattern even emerges in studies of sexual activity in urban areas: A small minority bed-hop, while the rest of us are mostly monogamous.

The power law is dominant because of a quirk of human behavior: When we are asked to decide among a dizzying array of options, we do not act like dispassionate decision-makers, weighing each option on its own merits. Movie producers pick stars who have already been employed by other producers. Investors give money to entrepreneurs who are already loaded with cash. Popularity breeds popularity."

That being said, there are a couple of implications.

If being an A-lister matters to you, you need to write quality, and write it often. And then, make sure that others can find it. As inequitable as it is, the best way to do that is get the notice of the A-listers by linking. It's an artifact of the way PageRank, etc. works. As I've said before, a link is a blunt instrument and the crudest of social gestures. But it's what we have for right now.

If writing for and serving a particular focused market is the thing that matters, just write, write often, and write on-topic. The search engines will find you.

On the other hand, notice from the above that while the "short head" gets the big traffic, the real numbers are in the long tail. Providing a way to connect those individuals en masse opens up another route to success. More on this soon.

Update: Hugh weighs in as well.

Seth's Head vs. The Long Tail

Over the weekend, Seth went on a rant about "the inanity of the American consumer." In particular, he was incensed about the availability of a machine that can toast a muffin, heat a slice of ham, and cook an egg all at the same time. Godin:

"What kind of person, exactly, needs this...not only don't people need it, it's unclear that they even want it.

It seems as though we've marketed ourselves into a corner, where the only way to grow is to find increasingly narrow niches of decreasing utility."

Seth, you fell victim to one of the classic blunders, the most famous of which is "Never get involved in a land war in Asia", but only slightly less well known is this: "don't assume the customer is just like me, the marketer."

While this doesn't precisely fall into the "long tail" case for the reasons mentioned here (primarily the amateur creation aspects), is this not still a case where there's an opportunity to match up a customer with a product that has utility for that customer? It doesn't matter if you or I think there's "utility" for something like this. If this meets a need for someone, and that someone can find it via online search, and it can be created and delivered efficiently, why not?

Bonus rant: As noted above, the reference post talks about consumers. I won't be able to say it better than Jerry Michalski, via Doc Searls, so I won't try. Doc:

"First, we're readers, viewers, listeners and (most of all) customers, not just 'consumers.' As Jerry Michalski put it long ago, a consumer is nothing more than a gullet whose only purpose in life is to gulp products and crap cash. Economically speaking, "consumer," as the word is commonly used in the advertising business, is a linguistic fossil from the old industrial world where the only way big companies could reach potential customers was through media conduits that sluiced in one direction only, from the privileged few to the captive many. Except as the literal reciprocal of "producer," "consumer" no longer holds much useful meaning, except where the supply side of advertising talks amongst itself. Worse, using it is risky and misleading. It disses a whole side of the marketplace that grows in power every time one customer links to another one."

Customers Use Social Technology To Route Around Corporate Monoculture

Delocator.net is a collaborative project designed to enable customers to more easily find unique, non-homogenized services. While the original Delocator site is aimed at routing around everyone's favorite coffee whipping boys from Seattle, the creators have created the site for the following reasons:

"Each [Starbucks] store is designed to deliver the authentic coffeehouse experience. The only way to accomplish this and be profitable and competitive is by making all of the stores identical: the same beverages, food, ambient sounds and smells, even the same simulated coffeehouse interior wall treatments. Their products, services and spaces are quantified: eliminating any subjectivity or variance in their business practices, making all things measurable; homogenized: reducing the entire range of experience to one particular form; and commodified: everything is either directly for sale or in the aide of selling.

"Social interaction is even considered. All employees receive the exact same training for product handling, customer service, and store management, creating a cog-like work force that can be placed anywhere within the system of stores. The regulation of employees and store architecture both set a precedent for customer behavior, all unvarying, compliance-driven, and ultimately, non-social." (emphasis added)

The vision of Delocator isn't limited solely to enabling the revolucion de los lattes, however. They continue:

"The creation of other delocated database-driven web sites is encouraged. On the delocator.net web site, users are able to download the code necessary to establish a new database, prompting more sites and databases that may focus on other specific retail stores (fast-food, hardware, clothing, etc.)."

(Here's where you can download the toolkit.)

This is certainly not the first, nor the last, effort of this type. However, the ease of use of the site and, more importantly, the ease at which the Delocator team has made available the tools to broaden the scope of this effort to other retail niches makes it something to watch.

Extra: The same idea can apply to hotels as well.

(hat tip: john)

Hugh...DeBeers?

This just in, from the "seeking to understand" department...

Hugh Macleod, of gapingvoid fame, is bringing t-shirts to market, featuring his cartoon designs. Hugh, a question for you. You state:

"As I said before, each design will be limited to an edition of 200. That's it. No more. Once they're gone, they're gone.

I shall start with four designs, the "Hughtrain/Infinite" design above, the "Good for you" design and two others. As soon as one sells out, I'll introduce another. But there won't ever be more than 4 designs, 200 of each, available at one time...I think they might become quite collectable, in their own little way. I certainly have no wish to flood the market with them."

You have hundreds (thousands?) of cartoons you've drawn over the years. Of the four you pick at any one time, there will be some folks who like them, and pick them up. But isn't it considerably more likely that a far greater number of folks would want some other design that you are not producing?

By way of comparison, there's (frankly) no reason why an individual can't, say, grab one of the .jpgs of one of your cartoons, upload it to CafePress (or their local t-shirt shop), and make themselves a t-shirt of it. Once those images are out (and a lot of them are), there's really nothing preventing that. And if that individual is just producing that one shirt for his or her self and not selling them, it's likely you'd never know.

Doesn't the faux-scarcity path fly in the face of the direction things are going? Why not give abundant choice, and get the Word of Hugh out farther and faster?

Give Customers Just The Hits? No Thanks.

Saw a post over at Matt Homann's site (hey Matt, turn yer comments on, would ya?) that led me to a post by Andrea Learned entitled "'Editing' in the Retail Environment." The pull quotes from Learned's post:

"Not every laptop known-to-man needs to be available at your consumer electronics store. Rather, do some research and reflect that you know your customers: deliver the top 10 sellers or the ones about which your customers requested most information in the past few years. … If your camera store, clothing store, appliance store or computer store has done its work, you will have discovered the "top 10" of your women customers' favorites and those will be the ones you provide and the products for which you train your customer service staff to know EVERYTHING about."

and

"In a retailer's situation, narrowing product selection can just reflect an excellent understanding of the store's core customers."

Some thoughts on this, cross-posted in the comments over at Learned's site:

Interesting. But a question...isn't this fundamentally disconnected from the direction that things are going? Chris Anderson argues that we now have the option for infinite selection.

(I've argued this as well.)

Retailers limit selection because of limited shelf space. Now, well...there's infinite shelf space.

You state above:

"...women want to know and trust your store to edit that first layer or two of extraneous product for them"

and

"...in a retailer's situation, narrowing product selection can just reflect an excellent understanding of the store's core customers"

The first statement is a broad generalization, the second is a rationalization.

To respond to the first statement, what if, instead of having to "read the detailed instructions," a customer (woman or not) had the ability to know which items solved the problems of others with similar problems to themselves? It might not be one of the "Top 10."

And to the second, what if, instead of focusing on homogeneity, the retailer was able to focus on the customer's unique needs?

Opinion: The "sell just the hits" approach is fundamentally flawed, and changing. Selling just the hits, frankly, leads to the case where we have WalMart everywhere, selling the same stuff. Every intersection has the same strip mall. And every woman has one of the same 10 laptops, or one of the same digital cameras.

Now, that last sentence sounds OK at first blush. What's wrong with "editing" things down to make search and selection easier?

Here's what's wrong. It's not just about the commodities. Don't you feel that every individual (woman or man) has *some* aspect of "themselves" that they need/want to express uniquely? And connect with others who share that idiosyncrasy? Sure, for some, a laptop is a laptop is a laptop. But what about things that someone might be passionate about, and *not* want to buy off-the-rack? There are going to be some dimensions (be they music, media, fashion, or interests, etc.) that everyperson - woman or man - has a unique perspective on. Without choice, and when being forced to select from just "the hits," those unique aspects of a person's personality atrophy over time, and eventually the homogeneity seeps in and bleeds over into, well...everything.

Oh yeah, one other thing:

"Barnes & Noble only stocks 130,000 books, yet more than half of Amazon’s revenues from books comes from titles outside of the top 130,000 books." (source: Rick Klau)

Companies that focus on the hits-only model will be leaving money on the table. And a lot of it.

Relationship Hubs In The Long Tail (podcast)