Associations in the Age of the Long Tail
ASSOCIATIONS NOW, February 2006 , Feature
|Summary: The long tail theory postulates that focusing beyond delivery of only "hit" products may actually result in the creation of a brand-new, untapped market for the organization or industry. Consider the possibilities created by moving past accepted ways of thinking about the boundaries that today's association have defined.||
Albert Einstein once said, "The significant problems we have cannot be solved at the same level of thinking with which we created them." Any observer soberly evaluating the current state of affairs in the association world must conclude that this community faces a stark and critical choice: Either pay close attention to Einstein's insightful words by elevating strategic thinking to include the necessity of genuinely radical change, or prepare for a diminished role and probable irrelevance. Given associations' great potential to make vital contributions at all levels of human endeavor, it is important for their leaders to develop the foresight, insight, and courage to identify and capitalize on the emerging opportunities of a volatile strategic landscape.
Let's Begin at the Beginning
So, if you're a leader committed to taking responsibility for driving truly profound shifts in thinking in your association, where do you begin? Well, it is probably most appropriate for you to start off by reflecting on a fundamental question the late Peter Drucker often asked of organizational leaders: Would you keep your present business model if you had a chance to start over?
Virtually all associations' current business models can be described in a single word: membership. In this business model, individuals or companies pay a fixed amount of dues annually to receive a specific package of benefits. This structure is so deeply embedded in the way associations do their work that we routinely describe revenue streams other than dues or customers other than members as what they are not--nondues revenue and nonmembers--rather than what they are. The prevailing value proposition for associations is intertwined with the value of membership, often creating artificial boundaries that proscribe the consideration of other possibilities for creating value.
But is membership--at least in the way associations offer it today--a sustainable business model in a Web-enabled world? The most recent ASAE & the Center environmental scan, Mapping the Future of Your Association, raises real doubts on this issue, specifically presenting the "supertrend" of unbundling as a challenge to the traditional membership business model. According to the scan's executive summary:
"Increased competition is pressuring associations to offer their products and services a la carte rather than as an organized package. Traditional association value propositions--such as fellowship, personal and professional growth, and mutual assistance--must be delivered via specialized, targeted vehicles (the Web, for example)."
Another trend discussed in the Mapping environmental scan report is a major reason why the membership business model is under threat. So-called "demassification," or the fragmentation of formerly mass-market audiences into extremely small niches, challenges the usual one-size-fits-all approach of association membership. People want their specific needs and interests addressed in ways that are relevant to them, not necessarily in ways that make sense for their association. What's more, they want to participate in creating what they value instead of simply waiting for enterprises to deliver it to them. They are no longer passive consumers of value. They are active producers of it, both for themselves and for others.
Today, with these core beliefs shaping all of the important decisions about what to buy and where to invest limited time and attention, people are looking for something quite different from the standard membership offer--a dramatic departure from the entrenched business model of the association community. Fortunately for associations, there is a viable strategic framework for thinking about how to offer it.
Welcome to the Age of the Long Tail
In October 2004, Wired magazine Editor in Chief Chris Anderson wrote an article called "The Long Tail" that has sparked a global conversation about how the Web is changing the complex relationships characterized by markets, customers, and the creation of value. The article revealed and explained the underlying business model on which Amazon.com, Apple iTunes, Google, Netflix, and others have predicated much, if not all, of their success.
The core of Anderson's argument is really quite simple: In a Web-enabled world, the "nonhits" are just as valuable as (if not more valuable than) the "hits." Anderson's article discusses the long tail in the context of the entertainment media of books, movies, and music. Every book publisher, movie studio, and music label wants to be the one to have The Da Vinci Code, Million Dollar Baby, or Usher's latest CD in its catalog, because these works either are hits or, in the opinion of the producers, will be hits. In each of these creative arenas, the traditional focus has been on identifying and making available what will sell in large volume because of the space limitations of bookstores, movie theatres, video rental stores, and record stores, not to mention big box stores such as Wal-Mart. As Chris Anderson describes it, we have been living in "the world of scarcity"--these physical retail locations can accept, store, and justify putting on the shelf just so much inventory for so much time before the stuff that doesn't sell must be returned, and a new set of popular offerings is made available in its place.
Thanks to the Web, we now live in the world of abundance. The Web makes it possible for Amazon, Apple iTunes, Netflix, and others to offer an entirely different value proposition to their customers, based on an entirely different business model. Instead of making available only the most popular books, music, and movies, these companies can make accessible a staggering variety of content that appeals to whatever interests its customers might have, regardless of how obscure either the interest or the content might be.
With the "physical-world" costs of storage and distribution costs drastically reduced, Amazon and these other companies have discovered that the aggregate size of the market for the nonhits is actually much larger than the market for the hits themselves. By acting to capitalize on the huge long tail opportunity in front of them, these companies are now focused on helping their customers find what they really want rather than what a handful of decision makers believe should be made available.
What Will It Take?These concepts are applicable beyond Apple and Amazon.com. The strategic implications of the long tail for associations are considerable, which is precisely why associations need to elevate their strategic thinking. Ask yourself how your association would be different if you were able to make it simple, efficient, and cost-effective for your members to access the full breadth of ideas, concepts, and resources from your field? And by this we don't mean merely the material you think they should be interested in but everything they might want, even if you don't consider it to be particularly relevant. While the individual content elements may not seem valuable to you, they are likely to be relevant to someone, and in the aggregate of the long tail, that person represents a brand-new, untapped market for your association.
Pursuing a long tail strategy is about moving beyond just the hits to discover that which the scarcity model denies. Just as the world of entertainment has its hits, every industry and profession has a set of accepted ways of thinking and acting that defines the boundaries of its mainstream. Associations are often charged with enforcing these orthodoxies, which leads to the development and delivery of mostly sanctioned and popular material--their version of the hits--through distribution channels such as meetings and conferences, magazines, research products, and official Web sites. Nevertheless, there is always a significant body of unconventional thinking that lives beyond these boundaries, and there is a market for that information. As Chris Anderson notes, "...most of us want more than just hits. Everyone's taste departs from the mainstream somewhere, and the more we explore alternatives, the more we're drawn to them."
The scarcity mindset inherent in the dominant association business model, however, is deeply invested in maintaining the status quo. After all, associations seek to retain their members by providing them with access to "exclusive" content they cannot get anywhere else. But for that content to be perceived as valuable, it must be the "best"--or a hit, if you prefer. But only a limited amount of content can meet that test, so the association will focus primarily on the elite content creators who can craft the session, article, or book that is sure to be a hit. This is the scarcity model in action.
An abundance model, however, forces us to question the status quo. What role do our members and customers play as creators of content in the long tail? It is this aspect of long tail strategy that presents the most intriguing possibilities. Imagine the association as the trusted, context-rich marketplace in which all content creators--even those with highly specialized, quite possibly unique or even fringe interests--can develop unexpected new resources through a broad grassroots collaboration using free and inexpensive social media tools such as blogs, audio and video podcasts, and wikis. This is the opportunity created by using the Web not only as an infrastructure for the exchange of transactional value but also as the architecture for the engagement and participation of many contributors. Using the Web, 21st century associations can leverage what author James Surowiecki calls "the wisdom of crowds" and, in effect, create a kind of long tail economy for the professions, industries, and fields they serve.
The strategic implications do not stop there. Being a trusted access point for its field's long tail content means the association must help its members and customers find the content they want. We're talking about much more than a simple Web search. It is possible that some of what your members and customers are seeking can be located just by searching the broader Web, but how will they know what to look for and what's worth taking the time to read, hear, or view?
More importantly, in much the same way that many people go straight to Amazon when looking for a book, shouldn't every association have the goal of being the indispensable source for the entire spectrum of knowledge content in its discipline?
One reality of the long tail is that your members and customers will encounter worthless stuff. The challenge for your association is to help them navigate and filter the content of the long tail so they can access what they want while avoiding what they do not value.
Amazon and Netflix do this through recommendations based on previous purchases or rentals, as well as customer-created reviews, while Apple iTunes does it through collections and guest playlists. Your association can use similar approaches through the collaborative filtering of everyone participating in your long tail economy. You will need to invest in technology to make this happen, of course, but in a time of increasingly robust open-source applications, the development of such tools is within reach.
If the long tail opportunity is sparking your imagination, the next step is figuring out how you can make it happen for your organization. In his Wired article, Chris Anderson offers three basic rules for the entertainment industry, which we believe are equally appropriate for associations:
- Make everything available.
- Cut the price in half. Now lower it.
- Help me find it.
The key to capitalizing on the long tail is the availability of extraordinary variety. Remember that in the long tail, the nonhits are just as valuable as the hits, so the more content that is available, the better you'll be able to serve the many niches across your association. This doesn't mean the end of hits, however. You must have at least some hits, such as the popular annual meeting session or the widely read article, to make the rest of the long tail viable.
Still, consistent with our view that associations cannot be all things to all people, the idea is not for your association to always take the lead in creation but, to cultivate and sustain the right context for creation, which leads to an increase in the variety of what's available by orders of magnitude.
Let's also keep in mind that the long tail isn't just about creating and selling stuff. It is also about building and providing a home to communities of even a few people around ideas they find compelling. For example, a growing number of associations are creating communities of practice within which the members of a content niche, or perhaps several niches, can collaborate to create and share the precise knowledge they need. The associations simply configure, integrate, and support the social and technological architectures that make it possible for meaningful resources and relationships to emerge.
In the long tail, the aggregate size of many niche markets makes it possible to sell content very inexpensively. Apple iTunes sells individual songs for 99 cents each and, now, individual videos for $1.99. Consider what your association might be able to sell at such prices today. Don't be surprised or discouraged if it is difficult for you to think of something. Making this kind of leap in pricing can be the biggest hurdle for organizations to clear for two reasons: the commitment to recovering sunken costs and the challenge of making that content easily accessible for purchase. Nevertheless, the long tail demands that you think differently about your pricing strategy across the board. You might find that your contributors have a clear role and a personal stake in developing material they can sell inexpensively in the trusted marketplace you build for them; they will create on the cheap and may choose to bear the related costs, because they are primarily interested in burnishing their reputations or standing within communities of importance to them and their peers.
Is the long tail the business model of the future for associations? There is no way to answer that question with precision. What we can say is that the long tail offers associations an alternative way to look at their future. A long tail in your field is likely to develop with or without you. The next step is for you and other leaders of your association to engage in focused and clearheaded strategic thinking and conversation about the possibilities of the long tail. It is only by actively challenging the core assumptions of your association and the field it serves that you will be able to keep your organization relevant in the future. For 21st century associations, the future will not be a linear extrapolation of the past, and the problems faced surely will not be solved at the same level of thinking at which they were created. Heed the advice of Albert Einstein, and your association will be in a stronger position to act with confidence.
Jeff De Cagna and Jamie Notter are principals and cofounders of Association Renewal LLC, located in Gaithersburg, Maryland, and Arlington, Virginia. De Cagna and Notter will be conducting an informal dinner conversation about the long tail at ASAE & The Center's Great Ideas Conference in San Diego, California. The Great Ideas Conference takes place February 26-28, 2006 at the Loews Coronado Bay Resort. If you are interested in participating in this informal conversation, e-mail Notter at email@example.com.
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