Remember the good ol’ times when you could record a quick product (and there were products teaching how to do “rapid product creation”) and then throw in a coaching session at the backend and that was the killer formula for online success? And the wonderful times when somehow you pulled some strings, got some buddies to send an email for you and made the next big launch happen. Wonder where those days are gone? Wonder what happened to the online marketing industry? Wonder why all of a sudden all the gurus disappeared?

Well that happened because we were trying to catch a rat, thinking it was a rabbit. You see the “hit and run” way of doing business was never to last. It was great (for a short while), until customers got smarter.

Welcome to the coming age of online marketing. Mindvalley has recorded a steady average growth rate of 80% year on year for 5 straight years, and we have been able to do that (and are confident we will be able to do it in future too), because we never played by the “fad”, but played by “business model”.

You see companies like Amazon, Apple, GroupOn follow a simple business model. Which we discovered early and we are mastering now. More on that later, but for now let me share what is the coming trend in online marketing.

One of the best explanations of the new trend can be seen in this book called “The Longer Long Tail”. The era of single products is dead, what has begun is something which can be easily said is the era of “offers”.

If we were to talk about the times when products were delivered physically, the 80/20 rule was the key factor. 20% of your products got 80% of your revenue and 100% of your profits. True, but when the cost of keeping inventory was so high that ate on your profits and you couldn’t even stock all that be in the long tail.

Digital delivery and ease of distributing content changed that. Netflix, disrupted the movie rental industry. So did iTunes for music, so did Amazon for books.

As a digital product has zero (almost) cost of maintenance, it has changed the economics completely. Since the digital age has come, this has what has happened:

1. There is no limit to quantity of products you can keep

2. The sealing on the number of products you can keep has disappeared

3. Delivery has become as simple as uploading the files and setting up a membership area

4. Technology has enabled, buying and distributing at higher speed then ever

5. People choices have been molded to pick only the things they like, iTunes lets people pick the track and not the whole album

…and the list goes on.

The above factors started playing a significant role in choices people had. Now, you can be selling a book that might sell only 10 copies in a year, but because you don’t have any storing costs and you can handle as many people at the same time in your checkout, your overheads become zero, making the sale of 10 copies also clocking you a profit.

The long tail in digital era has extended the product line, without adding any cost. The 80/20 rule has changed to now 2% of your product making 50% of your revenue, 8% making 25% of revenue and remaining 90% making the remaining 25% of revenue. What is interesting to see is that the profits are seen to be as 33% from each segment (source: the longer long tail book). Why does that happen? Because usually the top 2% involves more cost. They are from an author that needs more royalty or there are more affiliates promoting it eating on your profits.

The winner, my friend, is the art to be able to acquire new tracks, products, services on the back end of your tail… for an ever lasting tail, that perpetually brings revenues and profits from the clients acquired from the head of the sales funnel.

So what can you do about it?

Here is some food for thought (and maybe action after that!)..

1. Find the platform that can serve your content to a ton a people (be on someones long tail – Amazon, iTunes etc.). This will give you the ability to perpetually acquire customers giving you the independence to create more and more products and content, which in turn create your own long tail.

2. Create a platform and find partners that can help you find people in your niche to be able to create a long long long tail!

[googleplusauthor] Senior Partner at Mindvalley

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