Intermediaries
Customer Experience Crossroads has an interesting post on the role that intermediaries play in our lives. This role is a key part of today's buying psychology.
Consumers often wonder who they can trust given the world in which marketers lie - as Seth Godin points out (with an elongated nose)! Consumers universally are seeking to save time, effort, and money. So, if time and trust are the primary movers, then why are we seeing a shift in intermediaries in some industries?
Using the real estate industry as an example, realtors are famous for their 7% commissions. While I have always used a professional realtor, there are more and more consumers opting to use a FSBO (For Sale By Owner) program such as Home Avenue. A couple reasons I think this trend is increasing:
1. Home owners are starting to see less value added by realtors because of the broader availability of FSBO programs - the tipping point phenomenon
2. Home owners have lost trust in the real estate agents
3. Real estate agents have bombarded home owners with marketing campaigns - too much noise and clutter is impacting the amount of permission consumers give realtors
3. High home value equity gains have created enough value for the home owner to sell the home themselves, because it is worth their time and effort (and they make more money).
Given these elements, I believe that a broad erosion of trust is occurring in this industry. Perhaps even with traditional intermediaries in other industries. It is also clear that the economy plays a role in the amount of services individuals purchase from intermediaries. Moreover, this will likely lead to a shift in the gate keepers of the current intermediaries within each industry.
This appears to be further confirmation of an experience shift. The old ways of providing services are not holding up to the changing demands of consumers today. People simply want an experience that makes them better on the other side of the transaction, and where they feel good going through the process.
More to come on this subject. Thanks to Susan Abbott for igniting the talking point!
Consumers often wonder who they can trust given the world in which marketers lie - as Seth Godin points out (with an elongated nose)! Consumers universally are seeking to save time, effort, and money. So, if time and trust are the primary movers, then why are we seeing a shift in intermediaries in some industries?
Using the real estate industry as an example, realtors are famous for their 7% commissions. While I have always used a professional realtor, there are more and more consumers opting to use a FSBO (For Sale By Owner) program such as Home Avenue. A couple reasons I think this trend is increasing:
1. Home owners are starting to see less value added by realtors because of the broader availability of FSBO programs - the tipping point phenomenon
2. Home owners have lost trust in the real estate agents
3. Real estate agents have bombarded home owners with marketing campaigns - too much noise and clutter is impacting the amount of permission consumers give realtors
3. High home value equity gains have created enough value for the home owner to sell the home themselves, because it is worth their time and effort (and they make more money).
Given these elements, I believe that a broad erosion of trust is occurring in this industry. Perhaps even with traditional intermediaries in other industries. It is also clear that the economy plays a role in the amount of services individuals purchase from intermediaries. Moreover, this will likely lead to a shift in the gate keepers of the current intermediaries within each industry.
This appears to be further confirmation of an experience shift. The old ways of providing services are not holding up to the changing demands of consumers today. People simply want an experience that makes them better on the other side of the transaction, and where they feel good going through the process.
More to come on this subject. Thanks to Susan Abbott for igniting the talking point!
2 Comments:
Interesting point, Kyle: intermediaries need to add real value or risk "dis-intermediation" by something new to the whole category. Is this an example of disruptive innovation ala Clayton Christensen?
Susan, while I am familiar with Mr. Christensen's work, I have not yet read his books.
I think that anytime your real to perceived value ratio is impacted by the economy you are about to be dis-intermediated.
If you recall during the 90's boom, that was a very common business strategy.
While this terminology may have moved to the backwaters, I believe that this risk remains high and pervasive in the service industry, and especially with intermediaries! The problem with most is that they refuse to acknowledge the risk, because they are busy telling themselves about how much value they add – just ask a real estate agent, they will tell you.
I guess its time to visit Amazon again and purchase a couple more books! Thanks Susan...
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