“DISINTERMEDIATION” is that clumsy word used today to express manufacturers’ longing to rid themselves of the middleman, go direct and bring a lot more to the bottom line.
I hear a lot about disintermediation in the business-to-business arena, where magazine publishers in particular don’t like the way the Internet may render obsolete the retailers and other middlemen served by business media.
I personally don’t see any great tidal wave of disintermediation, even in over-hyped and over-publicized areas such as travel, where everybody’s perpetual whipping boy-the travel agent-has for the umpteenth time in 30 years been once again disintermediated (or so they say).
Clearly, the Internet is making it possible for manufacturers and suppliers to provide in-depth information and services, take orders, make sales and save money in ways that were seldom dreamed of in the past.
Smart marketers would like to have it both ways-to go direct where it makes sense, but without for a moment giving up that huge market of intermediaries. Those smart marketers recognize that distributors and retailers are customers too-very important customers-and they continue to find new and better ways to have those intermediaries push their brands.
I recently ran across an outstanding example in the B-to-B environment. It’s a young program, and just a tiny slice of Sony at work. I also suspect that this success story does not affect in any way the great longing of Sony or any manufacturer to go direct.
Sony’s Business and Professional Co. sells everything from switchers and tape dubbers to electronic microfilms, video recorders, high-end editing systems and so on. Its customers range from the wedding videographer right up to broadcast networks.
Yes, it does have a catalog on the Web that enables end users to find a product, get a description and ultimately make contact via e-mail with a distributor who will be more than happy to sell them the item.
Mini-Sites To continue that initiative and make connections with the people who hold the relationships with the end users, Sony has come up with dealer mini-sites.
The interactive agency it worked with, Nicholson New York, determined that at the time the project started last year most distributors had little, if any, Web presence. They also did not have the resources to invest in their own relationship marketing programs and Web site initiatives.
Together, Sony and Nicholson developed a program that allows the distributor to build access to the software, the knowledge and all the help required to service their clients.
Sony already had a co-op program in place in which the sales force signed up distributors who, in exchange for sales volume, received a variety of benefits, such as overseas trips, discounts off merchandise and so on-structured incentives with very specific goals and commitments.
The new idea was to extend the co-op program, but instead of delivering a product or trip that would cost Sony money, a program was developed that enables dealers to create their own Web sites.
Supplies Tools Sony gives dealers the tools to generate a site, which becomes an adjunct to the Sony Business and Professional presence. Prospects that come to Sony’s site can view the distributor’s site and learn about both the distributor and the product they are interested in.
The program is structured in a modular way, so that the more the dealers sell, the more add-ons they get to the mini-site. It’s a tiered relationship. The basic site consists of a software template that allows dealers to build sites, as well as round-the-clock service from Sony. That means that any time, day or night, someone from the company can go in and enter or update information about the company, products, store hours, locations, directions and so on.
The bottom line-literally-is that after only nine months, all of Sony’s costs for software development, overhead and administration have been more than recouped. So now there’s a system in place that’s making money for Sony, solidifying relationships and reducing all kinds of print costs in the bargain.
Intermediation, indeed. Why not have the best of both worlds if you can get it?
Network
