Michael Dell founded Dell Technologies in 1984, while he was still studying at the University of Texas. At that time, personal computers were still in their infancy, and Dell identified an opportunity to improve the design and functionality of computer systems. He started assembling computers in his dormitory room, and within a year, his business exceeded $6 million in sales. In 1988, Dell took his company public and became the youngest CEO to lead a Fortune 500 company at the age of 27.
Michael Dell stepped down from being the CEO of Dell in 2004 - at that time, Dell was the world’s largest PC maker. But in the next few years, it all went to shambles as the company lost its vision and missed the transition from desktops to notebooks, product quality suffered, and customer service became worse and worse.
Dell’s net profit fell by 72% in a single year in 2006! From 2004 to 2007, its stock price fell by 50%! Michael, who owned 16% of the company, lost a fortune!
The Dell Hell Wake Up Call
The power started to shift to customers with the rise of blogging in the late 1990s. As technology made it easy to publish web content (and Moore’s Law made it free with services like Blogger), people flocked to platforms to get their thoughts out into the ether.
Dell Computers initially did not understand this shift. A journalist named Jeff Jarvis started a blog called Dell Hell. In it, he painstakingly documented his ongoing customer service troubles with a lemon laptop he had purchased from the company.
It turns out at the time that Dell had serious customer support issues. But being a global business, it simply was not tuned into customer needs or rather have the processes in place to truly empathize and act on what it was putting its customers through.
Jarvis, using his blog, did not just attract a few angry fans. Instead, he ignited a movement in June 2005 with its cross-hairs squarely on Dell. Tired of being ignored, brushed off, or feeling helpless in the cycle of overseas customer support call centres, embittered Dell customers cheered for Jarvis.
And the New York Times picked up the story. Then Business Week. Dell suddenly did not just have an angry customer on their hands. They almost overnight had a huge public relations firestorm to put out.
After the Dell Hell debacle, former VP of Global Services, Jan Uhrish, talked about the importance of customer feedback: “We believe that through customer feedback, we are able to grow and evolve our solutions for increased efficiency and ever-better Customer satisfaction. Consistent results across multiple categories exemplify Dell’s dedication to putting customers first.”
The Importance of Customer Focus in Michael Dell's Strategy
What sets Dell Technologies apart from its competitors is its strong focus on the customer, which has been a major factor in Dell's success. Turning the entire business model around for the customers, Dell has been able to win the hearts of millions of customers around the world, making it one of the most trusted brands in the tech industry
At the time, Michael Dell thought, “Why not make computers when people want them?” So, he came up with a clever plan. He started taking orders for computers and only built them after people ordered. This way, he didn’t have a bunch of computers just sitting around. This was the beginning of Dell’s “build-to-order” approach.
Dell's business model is centred around providing customisable technology solutions to its customers. The company focuses on direct sales, eliminating the need for intermediaries.
Initially direct sales were handled by phone. The direct sales model allowed Dell to build computers when they were ordered, allowing inventory costs to be kept at a minimum, compared to competitors who build thousands of computers in different configurations for sales in stores or by catalogues.
Over the next 10 years inventory control of components through the supply chain of subcontractors and products was cut from a week to fewer than 24 hours. Dell incorporated transportation and logistics management of its international manufacturing to include all forms of transportation for efficiency, creating an integrated physical distribution concept. The customers, when making an order, choose the final physical distribution based upon how quickly they want delivery of their computer. Empowering the buyer with the decisions of the computer components, delivery, and service increased customer satisfaction.
How Dell Supply Chain Works
The company is known for how it manages its supply chain and e-commerce. It is super-efficient - when you order a Dell computer, their network of suppliers, make parts like memory chips, hard drives and screens, & then assemble these parts into your computer.
This “build-to-order” supply chain reduces excess inventory and provides remarkable cost efficiency on storage, inventory resulting in minimized waste and competitive pricing.
Listening to & serving Customers
Dell's customer focus is not limited to just product development and delivery. The company also places great emphasis on providing excellent customer service. The team is known for its responsiveness, expertise, and willingness to go above and beyond to solve customer problems. This has resulted in high levels of customer satisfaction and loyalty, with many customers returning to Dell for their future technology needs.
The company has made big strides to connect with customers, understand their needs, and make improvements within the company. It learned that customers can be powerful brand advocates or critics, depending on whether or not the company is willing to not only take the time to interact with them but, actually, act on their complaints and suggestions. In this way, Dell provides every business with an important lesson on the need to stay open to customer feedback, putting that feedback at the heart of its operations
The key to Dell’s turnaround lies in its efforts to provide customers with an opportunity to provide feedback and more importantly, they leverage that feedback to make improvements in their products and services. The feedback is collated to -
· Find out what customers think about Dell’s products and services
· Identify unhappy customers and address whatever problems are causing the unhappiness
· Proactively respond to and eliminate customer problems, ensuring that they will not occur again in the future
· Provide customers with round-the-clock access to the company, increasing satisfaction & retention
Some strategies deployed by them to gather feedback are –
a. Feedback surveys –
Surveys enable the company to tap into the full value of its customers who can, at any time, alert the company to problems, make suggestions, and share knowledge about Dell’s products and services
b. Ideastorm -
its dedicated customer feedback website mentions Ideastorm -“to gauge which ideas are most relevant” to the public. Users can leave suggestions and requests which others can rank according to what they consider to be most important.
c. Customer Advisory Panel -
Dell’s CAP provides opportunities for top customers and key managers across various industries to give advice and provide insights into how Dell should direct resources and provide increased value to customers
d. Loyalty Rating -
Dell maintained a especially high relationship with 83% users planning to make a second purchase and 80% likely to make a recommendation
Environmental Initiatives
Dell knows the Earth is important, so they take steps to be kind to our planet. They use less electricity in their factories and make their computers use less energy when you use them. This helps reduce pollution and saves energy, which is great for the environment. They also try to use materials that are good for the Earth, like recycled plastics.
Another cool thing Dell does is take back old computers when you’re done with them. They recycle the parts and reduce waste. This way, your old computer doesn’t end up in a big junkyard harming the planet.
Dell's decision to utilize "Green" technologies to become a carbon neutral company increased customer satisfaction with companies and individuals concerned with the environment.
A Force to Reckon with
Today, Dell Technologies is a multinational technology company with operations in more than 180 countries. The company employs over 165,000 people worldwide and has annual revenues of over $90 billion. Despite its growth and success, Dell Technologies remains committed to its founding principles of customer focus, innovation, and entrepreneurship
The company's strategy revolves around listening to customers, understanding their needs and delivering products that exceed their expectations. This approach has won the hearts of millions of customers around the world, making Dell one of the most trusted brands in the tech industry.
*Information Courtesy - https://skeepers.io/en/blog/how-listening-to-customers-helped-dell-leap-from-worst-to-first/
* Information Courtesy- https://en.wikipedia.org/wiki/Dell#:~:text=Dell%20sells%20personal%20computers%20(PCs,supply%20chain%20and%20electronic%20commerce.
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