Long Tail once, profit for months
My take on The Long Tail is pretty simple. You can chase all the Big Money you want to but if you ignore the small stuff, you're leaving money on the table. In other words, don't ignore the pennies on the ground; they add up. Think "round up" and the difference goes in your pocket. Limit yourself to the 80% and you'll miss the other 20. Why target only the bulge in the middle if it's often just as easy to target the whole curve?
When I say "Long Tail once, profit for months." I'm encouraging you pay attention to the low traffic portions of your site too. Let's say you sell music. Your first thought might be to focus on number 1 hits going platinum. Yes, there's money to be made there but let's not forget the indie titles, the imports, the reissues, vinyl as well as CDs, ringtones, licensing revenue, etc. While their individual sales volume may be small, taken together they can be a significant revenue stream. The same holds true if you're selling books, clothes, or financial services.
If you have a web site that features Google Adsense or Yahoo! Publisher ads, your goal is to deliver eyeballs to online advertisers. You can try to hit one out of the park and hope you hit a homer, garnering fame and fortune in the process. Another approach is to also pay attention to pages that may attract fewer people. The logic is that online advertisers often pay more for tightly focused, well-defined audiences.
Another example: Azalea Software sells barcode fonts. Most people buy one of three products. We used to call the others "The 2% Club" until I learned to embrace The Long Tail. The old way of thinking was "Yeah, none of these are more than 2% of our total sales but I guess we'd miss them if they disappeared tomorrow." Once The Long Tail sunk in, we abolished this caste system and emphasized all of our products in a more even handed manner.
Why do I say "...profit for months"? Over time the ROI on your Long Tail efforts continue to add up. Build Long Tail elements into your business model and you'll make more money the longer you're in business. The more successful you are at Long Tailing, the longer you'll be around to be profitable. Now that's the good kind of recursion.
OK? Now go for it!