Platform firms — businesses that enable transactions between two parties — constantly struggle to prevent those partners from taking their deals off-platform. The technical term for this is “disintermediation,” and examples of it include readers buying online rather than from bookstores, Upwork and ZBJ (China’s Zhu Bajie) programmers contracting directly with clients, and Airbnb struggling not only with guests contracting directly with hosts, but also with some of its biggest professional hosts reportedly competing against it on new platforms. Disintermediation — and the failure to understand and address it — killed once thriving businesses like Borders books, Blockbuster movies, and Tower records. It’s easy to understand why platform companies worry so much about being cut out of the loop.
Why Customers Leave Platforms — and How to Retain Them
Start by understanding six of the most common reasons people choose to leave.
August 30, 2023
Klaus Vedfelt/Getty Images
Summary.
Companies often misunderstand the problem of users leaving their platforms. Disintermediation is a sign that your customers don’t think you are adding as much value as you think you are. Firms struggling with disintermediation can take simple steps to stop the bleeding before it’s too late — if they understand what’s really taking place. They should consider six factors: urgency, rake, risk, skill, frequency, and modularity. The solution for disintermediation is quite simple: Create more value than you take. Stop playing the role of toll-taking gatekeeper and start playing the role of value-adding partner.