Okay! So is disintermediation a myth
or not? Before anybody takes umbrage to the position I took in my last
articles "Chicken Little and the new Disintermediation Myth!" and "Why
the Sky Won't Fall on VARs", let me again set the stage by restating
my position.
It is my belief disintermediation - for the most part - is a myth but
that's not to say in an e- perfect world, it doesn't have its merits
or that businesses still won't continue their efforts to effectively
bring it to fruition. After all, to improve the business model by eliminating
an entire channel of Value-Added Resellers [the Middleman] makes a whole
lot of sense in streamlining the selling process, cutting costs and
increasing profitability. Who could argue with that?
In my opinion, anyone! The Internet and e-commerce have been around
long enough for us to see they haven't had the impact on traditional
buying practices predicted by the experts. Why? Because, as I said in
my last article, e-commerce, in and of itself, lacks the human-comfort-quality
needed by most buyers in most industries to make a sale. In simpler
terms, the Internet lacks a face.
That's not to say, however, there aren't many successful companies that
stand out as icons for how to do business successfully on the net. Cisco,
Staples, Amazon, Dell, SalesDriver.com are just a few that have clearly
found a way to put a round peg in the proverbial square hole.
So how have they done it? By combining the best parts of both mediums
in a Two-Step approach expressly designed to placate the genuine discomfort
of those reluctant to making an e-change in traditional buying practices.
Let me explain.
Few will dispute customers buy only from People and Companies they trust.
The prime directive in selling is and has always been to engender rapport
and trust between the seller and the buyer. Without them, one inhibits
the chance for a sale and/or at best, is quickly relegated to a large
group of non-distinct providers who in the end are differentiated only
by price. Rapport and trust inarguably transcend focus from price and
promote long term mutually rewarding relationships.
How is it done? In person - face to face [B2B] and therein lies one
of e-commerce's biggest challenge. It has no Face!
If today I decide to buy a new computer over the Internet, I, like most
of you, know exactly what I need and understand, feature by feature,
what the new computer will and/or won't do. After all, the inner-workings
of most computers are made of identical components. So making an e-purchase
should be a simple exercise in finding the best price.
"Why then am I reluctant? As I pointed out in my last article, it's
not because I'm afraid to give out my credit card - I am not. I still
won't give out personal information like date of birth or my SIN number.
[Usually not needed for credit card purchases this small anyway].
Why then do I not buy? Well, despite the fact there is a comprehensive
three-year warranty on the product, there is, nonetheless, still no
face, no relationship and no one to champion my cause should my computer
fail. In simpler terms, I want to know that should I encounter any difficulty
with my purchase, I can call up [ie] Tony - the same Tony in whom I
trust, who said before I purchased, "I'll take care of you!" - and he'll
rectify my problem.
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Whether it's something small personal or something large corporate,
the psychological, human behavioral, motivational factors are at play
in the rapport / trust-building stage and walk in lockstep with risk
and comfort - the wall, so to speak, that separates both worlds and
the buying practices therein.
At the risk of beating this point to death, car companies have taken
great pains in taking the risk out of car buying over the net. Their
kimonos are open wide ensuring customers are never lacking any detail
necessary in making an informed, comfortable decision.
Complete bumper-to-bumper warrantees backed by reputable companies like
Ford, GM and Chrysler, for example, should reconcile any trepidation
an e-buyer may have, shouldn't it?
Why then will most people still buy their car at the dealership? Because
they know that Tony - the same Tony in whom they have trust, who said
before they purchased, "I'll take care of you!" - is a real face in
a real place, ready to champion their cause, take ownership and rectify
any problem.
The lesson here is not so mysterious. Successful e-marketers understand
the success of e-commerce and the reciprocating benefits to both consumers
and suppliers are integrally linked to the introduction of the program
using a B2B strategy designed to address the human need for buying comfort.
They need a face!
Any e-trepidation all but evaporates the minute consumers are satisfied
they are not alone in net transactions. Accountability-comfort still
goes right up and down the entire food chain especially when one considers
the negative outcome potentialities should the product purchased, for
example, be the reason an entire corporate network crashes.
For these reasons, I believe, the middleman [VAR] for the foreseeable
future is safe, and, disintermediation will most certainly go the way
of the dodo. The fact is, customers will always demand good service
and support, which in practice, rarely comes from circuits or microchips
but rather in flesh and blood - and a FACE!
The Bottom Line: Successful e-commerce companies continue to rely on
the traditional time-tested and proven methods of B2B marketing as a
first step in implementing a more comfortable, profitable and efficient
e-solutions model…and they are inclined to give short shrift to any
talk on Disintermediation!
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