Sun-Tzu, author of the classic The Art of War, wrote, “In the midst of chaos, there is also opportunity.”

He could have been a businessman.

In business, middlemen serve as the aggregators, the event producers that bring together suppliers. The pandemic, among other things, disrupted the place of these middlemen.

What Is Channel Disruption?

Customers used to seek out event producers or meeting planners to serve as general contractors for events. These general contractors would then find service providers to meet a client’s various needs.

The pandemic disrupted this flow.

In the chaos of quarantine and pandemic-related uncertainty, events went virtual and middlemen suddenly became unnecessary.

There was no need to book hotels. There was no need for catering. The need for middlemen — meeting planners, producers, many production managers — fizzled and died.

But what was bad for middlemen became an opportunity for service providers.

Customers started reaching out directly to service providers. So instead of working for middlemen, providers found themselves working directly for end clients.

For example, before the pandemic an event producer might have put together content, helped with creative, and guided clients through the entire event creation process. But during the pandemic, the client reached out to you, the service provider, and asked for help with their Zoom.

A producer couldn’t have added much value to helping with a Zoom because what the client really needed was technical help. So they bypassed the producer to talk directly to the technical team.

Eventually, maybe the client is no longer happy with just a Zoom. They want a bigger production. They want more audience engagement. But they’re still asking you, the service provider, to do that. They’re asking you to help them with event production.

So what do you do? One option is to hire that displaced event producer as a contractor or employee. Then you can fill the need for the client, and you get a bigger share of the client’s buy than before.

Essentially, you took the service that was above yours and swapped places with it. You took the middleman service and brought it in-house.

So now, the client looks to their service provider to play the role of general contractor. The service provider can then subcontract or hire an event producer. The roles have reversed.

The Middlemen Always Return

Don’t get too comfortable with this seeming good fortune. The middlemen will return. They’re doing it now; they always have, and they always will.

It’s a cycle that repeats constantly. We often miss it because channel disruptions are normally small and incremental. But we all noticed the pandemic.

As live events return, middlemen will too. They’ll keep their eyes open for opportunities to fill gaps in service customization and specialization that service providers struggle with when busy.

If you can continue to effectively meet your clients’ needs, even during busy seasons, they’ll have no reason to return to a middleman. But if services start to fall through the cracks, clients will welcome the middlemen back with open arms.

Simply put, middlemen exist because we fail to meet the service expectations of our customers.

But it doesn’t have to be this way.

Embracing Channel Disruption

Channel disruption is your friend. It’s opportunity amidst chaos. It affords service providers the way to close the gap between themselves and the buyer and work directly with the client.

Here’s the catch: you’re the general contractor now. End clients need their service providers to do EVERYTHING. So to take advantage of this opportunity, you have to diversify. You have to take on more responsibilities, meet new needs, and embrace the role of general contractor.

All of this leads to a bigger share of the client’s buy. With no more middleman and with direct access to the buyer, your margins improve in two ways. You have higher margins on the work you were already doing for clients, and you have high margins on the new services you offer clients.

But this good news comes with a warning. You can retain the new channels you’ve acquired only if you keep up with customer expectations. If you fail to meet client needs, someone else will step in and do the job for you.

Conclusion

Your ideal customer has changed. Clients started direct relationships with you, and you can now market to them directly in turn.

Look at everything your customers require and see how many roles you can step into to meet those needs. Not only will you be diversifying your business, you’ll also be sustaining the benefits of the channel disruption.

You might even make the current channel disruption the new normal.