The Long Tail and the Blockbuster in B2B relationships

Chris Anderson, editor-in-chief of technology magazine Wired argued in his book “The Long Tail”, that demand for media was moving inexorably from the head of the distribution curve to the tail. As consumers gained more and more choice and markets became fragmented, the few products that sell a lot lost market share to the greater number that sell modestly. A great example of this is Amazon, the king of niche products. It's easy to spend hours browsing through the books for one particular niche.

The same effect is certainly happening with TV. It was not so long ago that there were only two or three TV channels, so everyone watched them. The same still happens with shows such as X-factor and Strictly Come Dancing, which are mega hits. But for the most part, TV watching is now so fragmented, and the number of choices so widely available - Sky, BBC, Channel 4, ITV, Virgin, to name but a few - that building social rapport over a particular show is less common. If the choice is there, why would you watch something like X-factor if you really liked historical dramas instead?

Yet according to The Economist, blockbusters are thriving in popular culture. The surprising fact is that blockbusters get better ratings than more obscure hits. This is because a disproportionate number of people who consume blockbusters don't consume large amounts of media, and so rate the media that they do consume more highly, whereas the people who consume more tend to rate media lower (because they have more experience).

So hits are carried along by what The Economist calls "ill-informed goodwill", but as per the premise of The Long Tail, there is still an expanded range of choice. According to the article: "'Both the hits and the tail are doing well,' says Jeff Bewkes, the head of Time Warner, an American media giant. Audiences are at once fragmenting into niches and consolidating around blockbusters. Of course, media consumption has not risen much over the years, so something must be losing out. That something is the almost but not quite popular content that occupies the middle ground between blockbusters and niches. The stuff that people used to watch or listen to largely because there was little else on is increasingly being ignored."

The Long Tail in B2B relationships

Is there a parallel in B2B relationships? We would argue there is. In the UK, the market of suppliers is exploding in size and more fragmented than ever. According to the Department of Business Innovation and Skills, there were an estimated 4.81 million private sector enterprises in the UK at the start of 2008, an increase of 104,0003 (2.2 per cent) since the start of 2007. These levels are the highest since the time series began in 1994.

The "hits" are the big companies, the ones everyone has heard of. They use advertising and branding to boost their "blockbuster" status, and they have the resources to appeal to the customers who might not otherwise hear about more obscure SMEs.

Just like the Long Tail, being in the middle is a bad thing for a company - lacking the resources to be a "blockbuster", too general to specialise in a niche topic. The future of work then is to be part of that Long Tail. This has implications for how SMEs approach marketing, and for their entire offering - because the space is so fragmented, networking, word of mouth and "buzz" become much more important.

One of the ways which companies can get out of the dangerous middle ground is to piggyback from a blockbuster - partnering with larger companies. Another way is to focus more on becoming a Long Tail SME providing a core, niche product or service, and becoming known as the experts in that niche. Yes, it's not easy. But it will reap huge reqards.