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Written by The Mezzanine Group
on September 14, 2012

Intermediaries are dead. Long live intermediaries!

There was a lot of hue and cry about how the internet and the digital age was going to eliminate intermediaries. Insurance agents, for example, were going to vanish within a decade, weren’t they? (They’re still around, last time I checked.)

However, being an intermediary can feel like a tenuous position, and I’m not entirely sure that’s a bad thing for the health of industries. In our consulting practice, we’ve run into questions recently about the value of intermediaries in industries ranging from media to shipping to personalized marketing to software.

On the one hand, we work with intermediaries who have concerns about their place in the market. They may see other players changing the way information flows in their industry, cutting out their position entirely, and they need to understand whether that change will affect the entire industry or just a specific segment of it. Sometimes they are nervous to evenlet us interview them in the event that their ideas will be passed along, not to a competitor, but to their client who may try to skip over them to get to their clients.

On the other hand, we see situations where intermediaries are increasingly critical. Technological change is creating whole new categories of intermediaries. SEO companies are a great – and somewhat counterintuitive (wasn’t the Internet supposed to eliminate the middleman?) – example of this. Other existing intermediaries may find their role strengthened by change, as their clients look to them to help navigate a new landscape (I’d argue media buyers are being asked to play this role in the advertising industry). Players who can successfully knit together innovative services in a way that matches client needs may be able to create new intermediary roles for themselves.

If you want to thrive as an intermediary, you have to be explicit and value driven about your purpose. This means you need to truly understand what’s going on with your buyers and what their pain points – and opportunities – are. Can you market your services as a catalyst or an enabler to help your clients grow? Can you insulate your clients from complexity in a way that saves them time or money? Can you do these things profitably?

Ultimately there are two kinds of intermediaries who should be worried: those who know that their value to customers is diminishing, possibly with the risk of being circumvented or replaced, and those who don’t know what value they offer customers and how that fits into the overall market dynamic.

Without a solid grasp of your clients’ perspective, you risk missing the signals of circumvention until it’s too late.

If you want to understand your market landscape or buyers better, we can help.

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