We really struck a nerve last month with our column, “Upside of the Downturn?” That positive look at our negative economy must have tapped a can-do, fight-back spirit that successful companies share. Response was strong and positive.

So, here we go again. But this time, instead of a list, we’ll focus on a single strategy called “disintermediation.” Yes, it sounds like a business-school word for classrooms or Fortune 500 boardrooms, not for your street-smart marketplace.

But disintermediation can help, or hurt, growing companies of any size in any marketplace.

Imagine you are a successful travel agent 15 year ago averaging about $2.5 million in gross annual revenue. You are as happy as a tourist asleep on a sun-washed beach and, unfortunately, just as clueless. True, facing strong local competition is a challenge. But people are traveling for business and pleasure, and they welcome your help.

Can you guess where we’re going?

If you said “Expedia,” you are dead right. You and many of your traditional competitors lost millions in travel bookings as Expedia established itself as a $100-million “upstart.” Worse, this interloper arrived from “cyberspace,” an alien world you no doubt had never booked for a customer.

You were “disintermediated.” A non-traditional competitor (Expedia) eliminated or took sales from traditional intermediaries (travel agents) between products and end-users. For many travelers, Expedia was faster, cheaper, and more efficient. Plus, it was open at 3 o’clock in the morning.

Other examples include buggy whips (by the internal combustion engine) and slide rules (hand-held electronic calculators).

Opportunity Lesson #1: Consider the slide rulers. Imagine that they had embraced the calculator folks. After all, they had something valuable the calcs didn’t: the market. Who knew better the people performing complex calculations quickly and accurately every day with a small handheld device? Talk about targeting.

Looking for the positive in the negative, a visionary slide rule company might well have formed a strategic relationship with an electronics firm. The combination of market knowledge and product development expertise would have been awesome.

Now this kind of thinking might not work every time. We don’t know, for example, just how the buggy whip crowd could have embraced Henry Ford. But if you never see the puck coming there’s no way you can block it.

Opportunity Lesson #2: So far we’ve been talking about the dark side of disintermediation. Now let’s look at its bright side as a tactic for growing your business. How can you use it?

  • Open up your “no-quote” file. What new business opportunities have you turned down? Maybe you thought the fit wasn’t right, the tolerances beyond your expertise, or the opportunity just too large or too small.
  • Look for patterns. Did prospects ask you to perform a service or develop a product you didn’t have? Consider that they asked because they trusted you based on your other services or products. If patterns emerge, reconsider your offerings. Slow times can be great times for testing. When the market looks to you first, you need to look in the mirror and ask yourself why. Companies struggle for years to be “top-of-mind.” You might already be there.
  • Go for it. We are not a traditional sales training company. But our work to develop sales processes, generate leads, set appointments, and create effective sales presentations revealed an important fact: Many of our clients lacked consultative selling skills. We realized that even when we generated well-matched leads some of our clients couldn’t close. Poor sales skills were the problem. When we saw that pattern, we entered the consultative sales-training market, in part to ensure the success of our other services. Today sales training is an important part of our business.

No, we didn’t wipe out any industries. But we did use the principles of disintermediation to identify an opportunity and make the most of it with expanded services. And we probably did displace more than a few firms teaching more traditional, if less effective, business-to-business selling practices.

In fact, we went one step further. We now share our disintermediation experiences and expertise with business owners and senior managers in a 3-hour workshop. Digging a little deeper helps companies find the possibilities and avoid the perils.

To learn more, just give us a call. We’ll talk about the upside of the downturn for your company.


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