THE LONG TAIL OF MORTGAGE LEADS

Author Chris Anderson has a new book, "The Long Tail: Why the Future of Business Is Selling Less of More." The Long Tail has implications for your online mortgage site and your source for online mortgage leads. And it can also impact the amount of revenue you generate.

As you are aware, the abnormally variable interest rates of a few years ago are creating another boom in securing new loans. Many people may be seeking a new variable or new fixed loan for their property. This trend presents a real opportunity for mortgage companies, especially those with web sites.

Gosh, You Mean The Internet Is Different From The Real World?

In the real world a dog is man's best friend, wagging their tail, every time they see you. On the web, a visitor is man's best friend, using a mouse instead of a tail to greet you.

Not surprisingly, there are many distinctions between generating customers in the real world versus online client generation. In Anderson's book he explains that in traditional retail, you have the 80/20 rule, with 20 percent of the products accounting for 80 percent of your revenue. He goes on to say that online it is different; completely different.

In example, the average Barnes & Noble store carries 130,000 titles, which is quite impressive for a real world store. But when you look at the online book retailer Amazon, over half of their book sales come from outside its top 130,000 titles.

More Is, Well... More

At Barnes & Noble all it can earn is on the books in the store, but at Amazon, since they carry more titles, they can earn more, and they do.

We also see that more is better occasionally in the real world; that is why my daughter's favorite ice cream store is not called "Baskin & Robbins 2 Flavors"

Less is More Too

Essentially The Long Tail describes the ability of the Internet to service micromarkets. This is possible due to the delivery system of the Web provides. Take for example Ecast, a digital jukebox company providing service to bars. They find that 99% of their top 10,000 will play at least once per month.

This why the subtitle of his book is, "Why The Future of Business Is Selling Less of More."

Long Tail, Plus Lots of Music, Equals Lots of Money

Kevin Laws, a venture capitalist, states this about the music industry, "The biggest money is in the smallest sales." I am sure there are just enough sales of such classics as Tiny Tim's "Tiptoe Through The Tulips" and "William Shatner's "Spaced Out" CD to add a few extra dollars to the bottom line of online retailers. When you add those dollars to the thousands of other songs that have just a few sales each month, the overall effect can be staggering.

My Mother's Long Tail

My mother is English, but has lived in America since she was 20 years old. She still loves English humor. I bought her a NetFlix annual subscription for Christmas. She rents the most obscure English DVDs imaginable. She also contributes to the bottom line of NetFlix.

When The (Real World) Music's Over

Even Wal-Mart, the largest music seller in the world, is physically challenged. They place their music section in highly visible locations at low prices but they are limited to about 3,000 titles in 500 square feet. They concede the niche music or older titles to the online sellers.

If you have ever been to Tower Records, an 89-store music retailer, you might recall walking down the aisles seeing thousands of music titles, or searching through the bargain bin for that one favorite song you have forgotten about. While that may be fun, online searchable databases and price comparison web sites can help you find the hard-to-find version of "Respect" by Otis Redding, (although Aretha's version is far more popular), in less time than it takes you to get in your car and turn the ignition.