Disintermediation is a manifestation of the digital age.

Disintermediation is mostly about organizations using the internet or technology to save money by downloading the work of servicing the customer to the customer.

It is done by cutting out the staff required to provide an intermediate service between customers and providers.  Loosely speaking, cutting out the middlemen who were in theory getting in the way.

Putting up your website will disintermediate those calls to ask for your address or who to speak with regarding a concern.  A website can even take orders thereby reducing the need for sales or inbound telemarketing.

The ATM machine, for example, disintermediates the customer from the teller.  When you don’t need or use that intermediary, that is, the teller, you have been disintermediated.  When you bank on line you have disintermediated, amongst others, the post office who was going to take your payment to the vendor as well as the teller.  When you book your flight on line, you have disintermediated the travel agent who used to organize your flights and trips.

When you phone the help line and get recorded instructions or requests (choose 1 for English, etc. etc.) to select your problem area, you have been disintermediated.  When you are put in endless hold situations on the call, you haven’t really been disintermediated by the service you are forced to hold for; but you have been motivated to disintermediate yourself.

What isn’t appreciated, at times, is the value those intermediates provide.  The travel agent can give you great advice for your trip.  The teller can help you with less than routine bank requirements.

Getting the news from gossip from social media sites instead of the intermediation provided by news service to authenticate it makes it a lot more credible.  But only if news services authenticate their stories – which many do, but some do not — and as the profit pressure on the media continues, less intermediation exists.

A recent example:  We bought a Dell computer online four our accountant and it came with an attractive offer for a MS Office package.  Dell messed up the order, ran out of stock and cancelled it.  After a couple weeks, we still had not received our computer so we contacted them.  They told us they had cancelled the order and offered a different computer as a replacement.  (Surprise, it cost more).

Eventually we agreed to buy it and they sent it a week or so later.  But it didn’t come with any instructions or materials for installation of the MS Office package.  Our tech and another employee spend two days trying to figure out…They accessed our Microsoft account, they tried to get a response from Dell, from MicroSoft.

Finally, they got through to Dell and we summarily dismissed and told that the access information had been emailed to us.  Back we went and looked through our email – no message.  Back again to Dell to ask them to resend the email.  At this point, we got lucky.  The telephone support person told us to check our spam filters because their emails were automated and more often than not got caught by spam filters.  We checked our spam filters and found the original email, received a month before the computer arrived and at the point of being deleted by the month limit on our spam.  Dell’s disintermediation cost us two or three days of staff time and considerable anguish.  Will we buy again in this manner?  Doubt it.

We all have many cases where the disintermediation of services has brought problems and wasted time of customers.  The larger companies plan on this.  If you can reduce service costs for 90% of transactions, why not.  Deal with the disgruntled 10% later and if that business is lost, profitability is still increased.

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