Say the phrase "Dell Hell" and images of exploding laptops, defective motherboards, and crappy customer support spring immediately to mind. But the truth is that for the last couple of years it's Dell itself that's been trapped in the fiery inferno.
During that time the Round Rock reprobates lost their standing as the number one PC maker, suffered through a series of public relations gaffes, were ravaged on the blogosphere for ignoring their customers, and are struggling to avoid being delisted by the NASDAQ.
But there are signs the Dellies are making a comeback -- and they're doing it by listening and responding to their customers. Last July, the company launched its Direct2Dell blog, which now boasts 3 million unique visitors a month, according to head blogger Lionel Menchaca. (The blog just launched a Spanish sister site earlier this week.) In February, the company launched IdeaStorm, where customers could tell new/old boss Michael Dell how to run his company.
The results are tangible. Thanks to IdeaStorm, Dell is now going to offer Ubuntu Linux on some of its desktops, and will extend the Windows XP window through the end of the year. On the blog, Menchaca recently announced exchange programs for users who've been underwhelmed with the perfomance of its XPS 700 motherboards and defective notebook LCDs. The company has also ventured out onto the wider Web, trying to identify unhappy customers (like the 300+ at Dellverticalline.com) and soothe their ruffled feathers. That's a vast improvement over Dell's online Forums, where posts from angry customers have often outnumbered those from Dell reps by more than 100 to 1.
Menchaca says a few thousand or more unhappy customers can exert an enormous influence on executive decision making. But he also notes that Dell has received an influx of great ideas from satisfied customers.
Case in point, the decision to offer Linux on the desktop. Menchaca says many people inside Dell were behind the move, but that the overwhelming support from IdeaStorm contributors helped to seal the deal. "We had some folks here who didn't believe Linux was that big an issue," he says. "We just pointed them to the activity [on IdeaStorm], and that stopped the conversation."
But Dell's not climbing out of the pit any time soon. Analyst Andrew Daily of MGI Research says high levels of defective parts are still making it onto Dell's assembly line -- and that's not going to change for the foreseeable future.
Dell's official response is a classic bit of PR speak:
Analyst research of this type is looking at historical performance rather than future performance, and Dell has made significant investments in both quality improvement and customer experience.
(OK everyone, sing along with me: "The sun will come out tomorrow, bet your bottom dollar that tomorrow, there'll be sun.")
Daily does see Dell making a comeback in 2008 -- provided Michael Dell makes some bold Larry Ellison-like acquisitions. (Something Dell hinted at in the memo his PR team strategically leaked to the press last week.) But that's a tale for another time.
Is Dell on the rebound or going down down down? Give me your take here or post a comment below. Top tipsters will receive a bag suitable for stuffing with delisted Dell stock.
[Note: An earlier version of this post implied that XPS 700 motherboards were defective and that Dell's decision to offer Ubuntu was spurred by unhappy customers. According to Lionel Menchaca, those statements were inaccurate.]
Posted by Robert X. Cringely on May 2, 2007 07:53 AM
