Dell has built a highly effective customer proposition around their direct transactional business model. Not only does it save on the channel margins but it enables ideal stock management, which in turn drives additional cost savings. I hardly need to repeat this remarkable story, except to add that customers are not just interested in price these days.
It is possible to view traditional broadcast customer communications as working through another multi layer channel. Advertising agencies, PR agencies and media organisations introduce several layers of complexity each with their own profit requirement.
The internet cuts through these layers directly connecting customers and companies and blogs especially create a two way dialogue, which builds key relationships. These relationships are instrumental in driving future business (through evangelism) and protecting existing business (through loyalty).
Obviously in the direct communications model there are savings on “channel” margin, publication and media costs. However there are additional costs in time and resource. Nevertheless for many organisations I believe this new direct approach offers potential market advantage and improved ROI over traditional broadcast communications, which today are becomeing less and less efffective.