Just like every other weekday, I opened up my personal email while riding the shuttle on the way home from work. Unlike every other day, I was met with quite a surprise from both Groupon and Trulia.
It was as if both of them had decided in the last 24 hours to employ new retargeting technology on their websites and mobile apps. Before explaining what I saw in my inbox, I want to first describe how I had used their services.
In economic terms, disintermediation means to cut the middleman out. For example, consumers buying stocks directly through E-trade or Scottrade is a disintermediation of stock brokers. As a result, the intermediary loses business.
I’m going to extend/tweak the scope of disintermediation to cover branding.
Brand disintermediation is the art of cutting your brand out of the middle even though you may still be earning income in the short-term. In effect, these 3rd parties are stealing your customers while you watch (often because you gave them permission).
Here are three companies that are doing an excellent job at taking brand loyalty away.
One thing that I’ve learned from Living Social and Groupon is that my wife shouldn’t pay more than $99 for laser hair removal. Typically, it costs $600-$800 per area. However, I usually see a $99 deal once or twice a month. So we never expect to pay more than $99 as long as Groupon is still in business. For us, the value of laser hair removal has been permanently reduced.
The same problem occurs for a lot of businesses. Being featured at 50% off teaches customers that the reduced price is what they should expect to pay. I think that’s one reason you see the same companies offering deals month after month. They have to because that’s what consumers now expect to pay.