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The Path from Customer Champion to Scapegoat: Can Dell Find Its Way Back?

By Bill Cusick
© January 27, 2009

A look at how Dell’s customer experience has shifted over the last decade.

In 1999, the magazine FastCompany published an article by Scott Kirsner titled “The Customer Experience.” It focused on a select group of companies that were seen as leaders in providing a high-level customer experience, with a special spotlight on Dell Computer.

At the time, Dell was seen as an organization that “gets it.” The article noted that, hanging in a majority of the cubicles in the company’s headquarters in Round Rock, Texas, was a sign stating simply: “The Customer Experience: Own It.” Those first three words, “The Customer Experience,” were, Dell founder Michael Dell declared at the time, the key to determining who would win or lose in the Web world.

Flash forward ten years: Dell recently agreed to pay $3.85 million under a settlement with 46 states, involving a large number of allegations that Dell had engaged in a variety of deceptive practices to sell its products. According to a recent article in Macworld, there were a number of questionable activities that could mislead customers. Specifically, “Some customers never received rebates they were promised, while those who applied for zero-percent financing were charged higher interest rates. Some consumers also had trouble obtaining warranty service on the Dell PCs, according to the Washington State Attorney General’s Office.”

A Long, Strange Road

One wonders, looking back over the last eventful decade, if Michael Dell still thinks the three words that will define future success in 2009 are “The Customer Experience.” A lot has happened in the intervening years, of course. The Dell Computer of 1999 (at that time the largest seller of personal computers in the world) has become Dell, Inc. to accommodate the more ambitious breadth of its products and service. Along the way the company has seen its share or twists and turns. As recently as 2006, it was still considered one of the premiere companies in the world, ranking 25th largest and 8th most admired on Fortune’s annual lists.

But it seems that by 2005 Dell started losing its way. Financially, it was feeling pressure as shortfalls on its earnings forecasts were giving Wall Street analysts pause, especially after years of hitting or surpassing estimates. 2006 brought more financial disappointment, and by 2007, Michael Dell had had enough, and stepped back into the CEO role he had vacated three years earlier.

Then, in 2007, Dell was named as a subject of a formal investigation by the US Securities and Exchange Commission and failed to file formal financial disclosures on time. Add on some problems and false starts on products and partnerships, as well as the most recent customer-related settlement, and one wonders: What happened?

I don’t doubt that Michael Dell cares deeply about customers and their experience. But over the years there was a fundamental shift – inadvertent or not – in the company culture and approach. The company has grown exponentially. It seems pretty easy to find customers who are having an issue – right now – with Dell’s products or its services. A quick search on Twitter showed at least 12 people talking (unsolicited) about their problems with Dell within the last two days, everything from endless service calls that end in futility, to product design that invites frustration.

Rehabilitation, and Hope?

That’s not to say that Dell isn’t aggressively trying to navigate its way back to the path it was once on. There are several efforts underway to more directly and compassionately connect with its customers. On Twitter for instance, there are several Dell employees (like @RichardatDell) who are reaching out to that community, attempting to understand and, if possible, fix problems before they have a chance to fester. Another company that had become a customer pariah in the past, Comcast, has had some success on Twitter, first with @comcastcares, and now others. By putting actual people out in the mix with its customers, instead of impersonal channels (like Contact Us sections on its website) Comcast and Dell have created human faces for their companies, which makes the interactions real for customers, and creates real accountability for the company.

In addition, Dell has set up an innovative site, www.ideastorm.com, for the express purpose of soliciting customer feedback and ideas on their products and services. Ideas are grouped in categories and customers can, in effect, vote for what they think are the most valuable ideas. This gives the company a new conduit to its customer base, and empowers customers. There is back and forth on the site, with customers making recommendations, and Dell responding with real information – both good and bad – that begins to create the most valuable relationship dynamic: trust. Time will tell whether this is a fundamental shift back to a focus on the customer, or a “flavor of the month” initiative. We can hope it’s the real thing.

Without Relentless Focus, the Importance of the Customer Quickly Fades

Dell is like many companies: the deterioration or lack of customer experience focus wasn’t really a conscious decision. It was more a devolution, a gradual erosion that’s almost impossible to detect day-to-day, but so easy to see over time and on the larger scale. In short, it’s this: people stop caring. Instead of saying, “if we deliver an unbelievable customer experience, the revenue and profit will follow,” (as Dell clearly did early in its lifetime) management starts jumping to “we need to increase profit,” and the focus on customer experience is inadvertently left behind, forgotten on the side of the road.

Ten years ago Dell seemed different; it appeared to really “get it.” They understood the value of the customer experience. In that 1999 FastCompany article, Richard Owen, the vice president of Dell online at the time, said, “Sure we want people to think our computers are great. But what matters is the totality of customers’ experiences with us: talking with our call-center representatives, visiting our website, buying a PC, owning a PC. The customer experience reflects all those transactions.”

While there is evidence that the company “gets it” again, one wonders if it might be too late. Hopefully not, but in the last few years, damage has been done.

Seems like Michael Dell and the folks at Dell, Inc. know what the answer is to change course and get back on top. They’ve known it all along.

They just forgot.

Bill Cusick is CEO of Vox, Inc., a customer experience research and consulting firm. Contact him through the feedback form on our Contact Us page.

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