Carrying your long tail: Delighting your consumers and managing your operations

The growing ability to sell a wider range of goods, in smaller quantities, while still making a profit, is now widely called a long tail strategy. Profiting from greater product diversity represents a real change in optimal business strategy, which is based on real changes in customer behavior. Many firms want to develop long tail strategies, avoiding competition in mass market fat spots, and harvesting the superior margins available through selling in market sweet spots. Sweet spot offerings resonate with customers, allowing customers to find what they truly want and to avoid compromises; consequently, customers pay more while remaining happier with their purchases, and firms earn more and are more profitable. Evidence from earlier recessions suggests that in an era of excess capacity and pressures on consumers to find the best possible prices, competing through resonance offerings may represent an important source of protected profits. And yet, carrying a long tail and selling into sweet spots requires new skills, both for locating targets of opportunities and for controlling costs.