Dell Response to Wall Street Journal Article

Some of you may have seen yesterday's story that appeared in the Wall Street Journal (subscription required). Our view is that it only tells part of the Dell story. What’s missing is the progress we’re making against four key areas for consumer and small-business customers: post-sales customer experience, sales customer experience, pricing simplification, and improving how we reach customers through marketing.

The online community is important to us. More than half of our consumer customers buy from us through the Internet. You’ll be hearing more from me and other members of the Dell blog team about changes we’re making for the better across the business. Meanwhile, here’s the letter I sent to the Wall Street Journal in response:

Letter to the Editor: “It’s Time for the Full Story”
Wall Street Journal, August 30, 2006

After reading Wednesday’s A-1 story on Dell, we wondered what happened to the other half of the article. To the Journal’s credit, it factually rehashed many of the issues we have acknowledged and addressed for some time. We long have explained how our business is split between corporate and consumer customers, the former comprising about 85 percent of our sales. In fact, we are larger in corporate segments than the next three competitors combined.

What was missing in the story is more fundamental. U.S. consumer customers, like all customers, are important to Dell—we sell more PC’s to them than any other company in the world. They are a part of the reason we widened our lead last quarter to a global industry leading overall share of 19.2 percent. We are quite proud of this result and we are very committed to each and every customer.

Our U.S. Consumer business grew from 6 percent share in 2000 to nearly 29 percent share this past year. This is perhaps the best reflection that consumers believe in the Direct Model. We don’t know a better measure.

Dell is also growing faster than the industry in all high-growth international markets and recently earned the No. 2 share position in Asia and No. 2 in Japan. Critics and pundits may find it interesting to question our model, but customers are not and the results continue to show this progress.

The best is yet to come for our customers, employees and all stakeholders. We look forward to seeing the Journal write the other half of the story soon.

Ro Parra
Sr. VP, Home & Small Business
Dell

Comments  Comment RSS Feed

patmcgraw said:
I look forward to details.
John said:
I am glad to see that Dell has responded and it is madeavailable to your customers. You have used the ideal forum. This transparency is welcomed. Since you're the SVP of Home & Small Business, I am your customer. I am waiting to upgrade my Inspiron 300M but find that Dell's laptop offerings lack pizzazz. I am willing to pay more for better industrial design or even a Tablet PC. I will not upgrade until Vista is available. By that time, I hope there are more appealing models out, otherwise my business goes to Sony or Lenovo. I have been a loyal Dell customer for years and hope to continue that way, but the ball is in your court. BTW, buying online does not bother me. I would rather have my exact specs than compromising. Please keep up the blogging. Thank you.
Yuhan said:
I'm glad WSJ wrote an article on this. Good job GBAKMARS!!! Dell, STOP trying to defend yourselves. Everything said was TRUE.
Sean C said:
Thanks for all the blogging but we would appreciate if you keep reaching out to customers more as thats what I think you should address immediately. We are willing to pay more but we need better services . Regular day in a Storage Professionals Office Life - interesting blog http://storage-jobs.blogspot.com
Brian Neal said:
The most glaring omission in the consumer lineup is the availability of a Tablet PC. Why? Are there any plans to introduce a Tablet model in the future?
M3 Sweatt said:
Good to see the post. It will be interesting to see what you and other members of the Dell blog team have to say about the changes you're making to improve the customer experince... hopefully a continuing dialogue.
Dell Lied said:
I've recently been very outspoken on anti-consumer issues I've experienced with Dell. The "Dell Lied" username I've chosen makes this quite evident. And, I've written some harsh but true statements in response to some of this blogs posts, as well as on my web page/blog and in other forums. However, I have also experienced the efforts Dell is making, on an individual basis, to improve customer relations. I can say they are honestly trying hard. There is a still a great deal of work for them to do in this area, and they seriously need to rein in the phrasing their marketing department uses to describe products, as it has ranged from outright inaccurate, to unwholesomely deceptive. But, as I said, I can see where they are making efforts to both rectify their internal problems, and make amends with their customers. I now have hope in the few individuals at Dell that have recently been in touch with me to address the problems I have faced with Dell services. And, they have proven to me that they can achieve sweeping change . An example would be getting improper product phrasing altered across all of Dell Sales and Dell Outlet websites. Unfortunately, they still have some major problems to work on. But, fortunately, they are actively doing so. As I am a Dell customer, I look forward to the service improvements, and hope they can make me as happy with their service, as they have with their hardware and pricing. Because honestly, other vendors have made me happier with their service. I just find Dells product mix tends to fit my needs best. If they acheive this turn around to even a level of "adequate", from the previous "horrible"service levels, then I will be happy to recommend Dell as a vendor once again, which is not something I have done in many years. So for now I have hope. But, here's to seeing what the future holds, because promises only mean something if they're kept. -DL
Diverse said:
I read the Wall Street Journal article and have an anecdote to add. Repair of my notebook computer took almost ***three weeks***. This is a great example Dell's lack of "customer consideration" by totally ignoring the needs of the customer. The fact that Dell's repairs are done by Solectron and that Solectron uses DHL for shipments is immaterial. To me, the customer, it's all Dell regardless of who the sub-contractor is. DHL does not service my part of the country. The nearest DHL depot is in Spokane, Washington, a three hour drive from where I live. When I spoke with the Dell rep on August 17, I begged him not to use DHL for the shipment. Of course, to no avail. Dell has its system and if it inconveniences the customer that too bad. Keep in mind that UPS and Fedex drive past my house every day. Here's the chronology of a three week repair. Thursday, August 17, I spoke with tech support (took my entire day) and they arranged for repair. Thursday, August 17, the return carton is shipped to me via DHL. DHL delivers to Spokane and DHL hands off the package to UPS for final delivery to me. I receive the carton on Tuesday, August 22 and immediately call DHL for pick up. I wait all day Wednesday for pick up but no pick up. At 4 pm on Wednesday I call DHL and am told that they use an independent contractor to pick up in my area and he reported that he left a message for me to bring my pick up down to the Napa store on the main highway. I was home all day and received no message about that pick up from this independent contractor face of Dell. Note UPS and Fedex drive by my house everyday but DHL's guy can't be bothered. I rush the package down to the Napa store. Its picked up by DHL's (Dell's) contractor on Thursday, August 24, but doesn't get into the tracking system until Friday August 25. On Monday, I receive a message from a Dell support rep telling me the he sees that I have not sent the return. Note the arrogance--he doesn't say that Dell hasn't received the return--its I haven't sent the return. On Tuesday, August 29, I am notified that my computer was received by Dell. The next day, Wednesday, August 30, I am notified that my computer was shipped to me by DHL 2 day delivery. Today, Sept 1, I check the tracking and find that my package arrived in Spokane at 6:30 am today and is scheduled for delivery today. Well, 6:30 am is too late for DHL to hand off the package to UPS for delivery to me today. Monday being labor day, I will probably receive delivery on Tuesday September 5. That means the process of repair started on August 17 and I will receive the computer about 5 pm an September 5. Three weeks for a repair. DHL knows they don't cover this this area very well. Probably so does Solectron. Now Dell knows. The big question is: Does anybody at Dell really care? I'll make sure all of my neighbors and acquaintances in this area also know that they can expect three weeks for a Dell repair. What other recourse do I have?
J to the O said:
I sometimes wonder if people think about what it is they say. Yuhan said "Dell STOP trying to defend yourselves." To me, that makes absolutely no sense. If someone writes something about you, and you feel it isnt true, are you just going to let it slide or are you going to say something? I think that comment was idiotic. **I said that to see if Yuhan comes back to defend himself.**
Stephen said:
I know this may be off topic, but since you are a VP of Home & Small Business, I address my question to you: Why has Dell stopped shipping the Symantec System Restore on Dimensions ordered through the Home Division? My post in your forum is here: http://forums.us.dell.com/supportforums/board/message?board.id=sw_other&message.id=53538 It doesn't make sense why you are still installing it on Small Business Dimensions, but not Home Dimensions. I need to order another computer from Dell, but I *cannot* do that until I have a restore utility on the computer like it used to be a couple of weeks ago.
diverse said:
I think Dell is still making excuses for its cheap hardware and failures of service to the consumer. Dell is a culture of arrogance and you, the moderator of this comment section, prove it so because you wouldn't publish my example of Dell's failure--taking 3 weeks to get my notebook computer repaired and back to me.
Dell Lied said:
Hi diverse, I've posted quite a few comments in this blog, not just the one on this thread. It takes some time for Dell to approve comments, as someone at Dell has to read through them, filtering the ones with naughty language, or customer-personal information that shouldn't be posted to the public. I know one or two of my comments haven't been accepted for posting, but a majority of them have, including some rather scathing and negative commentary against Dell. So, just be patient. It sometimes takes days, not hours for Dell to review and approve comments, but from what I see, the most pertinent comments do get through, and are published. I dodn't mean that in a egotistical manner because mine have been posted, I meant that I try to keep them on-topic for that particular post/thread. Oh, and I noticed that both your posts were approved, and your backlash was issued 9 hours after your first post. So, I'll say this.. Dell does have a big problem with responding in a timely manner across the board, from e-mail to this forum. But, that may just be due to the sheer volume of e-mail they receive. Hopefully, this will be one of the issues they strive to address. Because even though it's "understandable", it's not always acceptable. And, good luck with getting an improved shipping method established with Dell for your area. I hope they find a way to enable the use of multiple shipping companies everywhere. -DL
Fred said:
I don't know if this is just an EMEA issue, but anyway, Dell really needs to terminate the deal with Schenker Logistics. They're a serious detriment to the overall customer experience. First, their online tracking is a complete scam. It's only available during business hours, if you log in after 6 PM you get this message: "The service is closed for maintenance (17:55 - 23:59). Please try again later." But if you do try again after 23:59, you get this: "The service is closed for maintenance (00:00 - 05:59). Please try again later." (Like they couldn't have told me that already at 17:55). So it's closed for "maintenance" for 12+ hours every night, but they make it look like it's "only" 6 hours when in fact it's 6+6. Wow, that's some heavy maintenance. My online bank closes for maintenance for one hour once a month. Schenker, why not just write "Sorry, our system sucks" instead of lying? Second, they take forever to deliver and they cheat while doing it. Now, I'm in Sweden and the products are shipped from Ireland. Here's how it goes: Day 1 - shipped from Ireland in the afternoon, arrives in Denmark in the early morning hours. Day 2 - from Denmark in the morning to a depot in Sweden in the afternoon, roughly 24 hours after leaving Ireland. Day 3 - After speeding across Europe it suddenly gets stuck at the depot for a whole business day, just for the heck of it. Day 4 - Early morning (about 3 AM) it arrives in my neighboring town 25 miles away. Do I get it in the morning? No, they call me and ask if they can deliver on the following business day or even the day after that (e.g. if the following day is not a Tuesday or Thursday, add another day). Then they have the nerve to write in their log that I the customer requested the later delivery date (so that it will appear to their superiors that they're doing their job). Day 5 or 6 - delivery (around 2-3 PM) And of course, since 5 business day nearly always overlap a weekend it's actually 7-8 days total. In summary, the package travels 900 miles on the first day, then it takes 4-5 (6-7) days to make the remaining 300 miles! A one legged bike messenger could get it here quicker. Now, here's the punch line: when I order stuff from Apple Store, it too gets shipped from Ireland (Cork). But: the shipment is free, it only takes two business days, and through TNT's online services I can track the package 24/7. The effect of Schenker's miserable services is that when a Dell package finally arrives, you're no longer excited, just annoyed. Why spice the experience with this extra dash of badwill, when you could just employ some other logistics provider who actually cares? It's this kind of attention to detail that's lacking at Dell. A flimsy button here. Snail-paced shipment there. And the silent prayer that customers won't notice.
Networks said:
Diverse as posted elsewhere on this blog: -- I had a "performance standards" issue (next-day-onsite was ?seven days later?) -- an attempt to 'complain' resulted in absolutely no response for 45 days -- after I finally had a 'supervisor' point out the way to communicate a 'concern' ---- I received: "And in this matter let me tell you that the promise of a Next-business-day services it all seems to be a misperception because you purchase a BancTech Service Corporation Contract, this states that the Next-business-day has a principal period of maintenance." email datestamped Aug 1, 2006 9:53 PM from a person identifying themself as a representative of Dell --- and I have yet to figure out (or receive a translation) what the Dell Representative was trying to communicate
diverse: My apologies for the frustration you have experienced up to this point.  If you can send me another comment (that I won't publish) with your e-mail address and your order number, customer number, or service tag, I'll have someone from the support team follow up with you.

Fred: I'll be sure to flag it to the EMEA team.  If you still have an open issue, please do submit a comment with your e-mail (it will not be published).

Networks: Saw your comment with your e-mail.  As promised, I'll have someone get back to you.
Dell Shareholder said:
Mr. Parra's letter is not responsive to the WSJ article and its identification of some of Dell's serious corporate culture and business climate problems. In fact, the letter only typifies them. The article didn't purport to tell Dell's "full story". It aspired to identify a subset of serious problems and company mistakes that are reflected in the destruction of shareholder value. Thus Mr. Parra's complaint about the absence of "the full story" is not really responsive. The WSJ article pivots around Dell's falling behind in the high growth consumer notebook and consumer area generally as symptomatic of a lack of vision and innovation (as in, Kevin "the iPod is a fad" Rollins) and business model problems. As a result of these and other problems, e.g. service, Dell has shuffled and dodged in five quarters of earnings reports and its leaders now have zero credibility with investors. Mr. Parra says the article, " factually rehashed many of the issues we have acknowledged and addressed for some time". Has Dell acknowledged that running its reputation for quality and service into the ground in a mere 2 years, a stupid squandering of an irreplaceable asset, is the stuff of b'school case studies? Has Dell acknowledged any connection between Rollins' tenure (at a mere $40 million/year compensation) and a 50% plunge in shareholder value? Michael Dell stands by him and says he's an excellent executive. How's that exactly? Mr. Parra's complaint that the Journal didn't tell the "full story" misses these particular problems and is typical of the company's state of denial, "we know best" mentality -- a fundamental part of the problem. (Look, for example, elsewhere on this blog at the company's defense of its unimaginative, tacky looking retail store in Dallas. "We designed it for Dell", they say, i.e., Dell has nothing to learn from Apple whose industrial design is about 5 categories above Dell's.)
Checking the news for customer service this morning, the first news line I came across was “Dell, Flamed by Customers, Pours $150 Million to Boost Service”. I know I’ve talked before about how Dell (DELL) is trying
Dell Shareholder said:
In connection with the WS Journal article to which Ro Parra responds, we have another example this week of Dell's damage control in an interview of Michael Delland, reported on-line, by a Fortune magazine journalist, "This Has Been a Wake-up Call for Us" and "The Challenge Ahead for Dell".   Mr. Dell wastes this opportunity to get the company's side of its  problems before the public by talking about Incas and Mayans and how they would throw victims onto fires.  What is he talking about??!!

Maybe Mr. Dell has a long-standing interest in ancient Mesoamerica but his references are so obscure, so weird that they connote nothing to the average reader.  What is communicated by this bizarre Inca imagery that has nothing to do with Dell's situation?   (Mr. Dell was talking about media exaggeration of Dell's problems.  By the way, Michael Dell noticeably did not say a word about the financial analysts  whose one-sided and misleading trashing of the company is much more damaging than that of the journalists.  The journalists take their lead from the analysts.  Mr. Dell's failure to criticize the analysts in this visible forum is not exactlly a profile in courage.)

This difficult period presents new challenges for Dell, the company, and constitutes a battle being fought out on terrain where Dell had no known, previous aptitudes:  Crisis control, strategic vision, innovation, etc.  These media inter-actions show the need for the company to add yet one more weapon to its current offensive -- some sharp-elbowed Strategic Communications personnel and plans -- that seem to be sorely missing.

By the way, it's good to hear someone state the obvious like the product designer quoted in the Fortune article: The Dell XPS line is "ugly".  If that represents the new, industrial design-conscious Dell, there's a problem.
D. Harrison said:

When one of our computers, under warantee, was broken, we telephone Dell support for an answer.  A new hard drive was prescribed.  It arrived, some days later, along with a telephone request to send the old one back.

We had time, a couple of weeks later, to try to install the new solution.  No directions were supplied.  No instructions.  We tried to get through to the Dell help line, but several half-hour waits later, we were unable to get through.

When  we finally did get through, some weeks later, we were told that Dell had made the wrong diagnosis the first time, and that we needed a new motherboard, but that, in the interim, our warantee had run out.

So Dell would do nothing.

When we returned telephone calls, Dell hung up on us.

Would you let your company depend upon Dell?

Lionel Menchaca, Chief Blogger said:
D. Harrison: I am sorry for the experience you've had up to this point. I will be glad to put you in touch with someone on our Tech Support team if you will please submit another comment with the email address completed. Until then, we don't have a way to contact you.
Elif ERYUKSEL said:
        Excuse me to bother you at your working !
 

    I'm a student in Kadir Has University in Turkey. I want to research your succesful and developed Dell Corporation Inc.to explain my teacher in Kadir Has University  in Istanbul. I have use your Dell Computer. I'm very pleased to produce your product but I erase the operating system by mistake of my Dell Computer and I don't have that system's CD or drivers Cds.

    Can you give me an idea and can you help me what I'm doing? I have some exam questions of my University Life. I must answer immediately this questions to give a lecture in Kadir Has University in Turkey.
 
         When you can help me , I' m really very happy person in this world. When you give an answer of this questions I practise and explain to my teachers.
 
                                                                                                                                                             Yours  Respectfully.....
    QUESTIONS :
 
    1- CORPORATE MISSION AND OBJECTIVES
     - Does the mission statement offer a clear guide to the product-markets of interests to the firm?
     - Have objectives been established for the corporation?
     - Is information available for the review of corporate progress toward objectives, and are the reviews conducted on a regular (e.g.,quarterly, monthly) basis?
     - Has corporate strategy been successful in meeting objectives?
     - Are opportunities or problems pending that may require altering marketing strategy?
     - What are the responsibilities of the chief marketing executive in corporate strategic planning?
    2- BUSİNESS COMPOSITION AND STRATEGIES
     - What is the composition of the business (business segments, strategic planning units, and specific product- markets)?
     - Have business strength and product-market attractiveness analyses been conducted for each planning unit? What are the results of the analyses?
     - What is the corporate strategy for each planning unit (e.g.,develop, stabilize, turn around, or harvest)?
     - What objectives are assigned to each planning unit?
     - Does each unit have a strategic plan?
     - For each unit what objectives and responsibilities have been assigned to marketing?
    3- MARKETİNG STRATEGY (FOR EACH PLANNİNG UNİT)
     A- Strategic Planning and Marketing :
     - Is marketing 's role and responsibility in corporate strategic planning clearly specified?
     - Are responsibility and authority for marketing strategy assigned to one executive?
     - How well is the firm's marketing strategy working?
     - Are changes likely to occur in the corporate / marketing environment that may affect the firm's marketing strategy?
     - Are there major contingencies that should be included in the strategic marketing plan?
     B- Marketing Planning and Organizational Structure :
     - Are annual and longer - range strategic marketing plans developed, and are they being used?
     - Are the responsibilities of the various units in the marketing organization clearly specified?
     - What are the strengths and limitations of the key members of the marketing organization? What is being done to develop people? What gaps in experience and capabilities exist on the marketing staff?
     - Is the organizational structure for marketing effective for implementing marketing plans?
     C- Market Target Strategy :
     - Has each market target been clearly defined and its importance to the firm established?
     - Have demand, industry, and competition in each market target been analyzed and key trends, opportunities, and threats identified?
     - Has the proper market target stratgy been adopted?
     - Should repositioning or exit from any product - market be considered?
     D- Objectives :
     - Are objectives established for each market target, and are these consistent with planning- unit objectives and the available resources? Are the objectives  realistic?
     - Are sales, cost, and other performance information available for monitoring the progress of planned performance against actual results?
     - Are regular appraisals made of marketing performance?
     - Where do gaps exist between planned and actual results? What are the probable causes of the performance gaps?
     E- Marketing Program Positioning Strategy :
     - Does the firm have an integrated positioning strategy made up of product, channel, price, advertising, and sales force strategies? Is the role selected for each mix element consistent with the overall program objectives, nd does it properly complement other mix elements?
     - Are adequate resorces available to carry out the marketing program? Are resources committed to market targets according to the importance of each?
     - Are allocations to the various marketing mix components too low, too high, or about right in terms of what each is expected to accomplish?
     - Is the effectiveness of the marketing program appraised on a regular basis?
    4- MARKETİNG PROGRAM ACTIVITIES
     A- Product Strategy :
     - Is the product mix geared to the needs and preferences that the firm wants to meet in each product- market?
     - What branding strategy is being used?
     - Are products properly positioned against competing brands?
     - Does the firm have a sound approach to product planning and management, and is maketing involved in product decisions?
     - Are additions to modifications of, or deletions from the product mix needed to make the firm more competitive in the marketplace?
     - Is the performance of each product evaluated on a regular basis?
     B- Channel of Distribution Strategy :
     - Has the firm selected the type ( conventional or vertically coordinated ) and intensity of distribution appropriate for each of its product- markets?
     - How well does each channel access its market target? Is an effective channel configuration being used?
     - Are channel organizations carrying out their assigned functions properly?
     - How is the channel of distribution being managed? What improvements are needed?
     - Are desired customer service levels being reached, and are the costs of doing this acceptable?
     C- Price Starategy :
     - How responsive is each market target to price variations?
     - What role and objectives does price have in the marketing mix?
     - Should price play an active or passive role in program positioning strategy?
     - How do the firm's price strategy and tactics compare to those of the competition?
     - Is a logical approach used to establish prices?
     - Are there indications that changes may be needed in price strategy or tactics?
     D- Advertising and Sales Promotion Strategies :
     - Have a role and objectives been established for advertising and sales promotion in the marketing mix?
     - Is the creative strategy consistent with the positioning strategy that is being used?
     - Is the budget adequate to carry out the objectives assigned to advertising and sales promotion?
     - Do the media and programming strategies represent the most cost- effective means of communicating with market targets?
     - Do advertising copy and content effectively communicate the intended messages?
     - How well does the advertising program measure up in meeting its objectives?
     E- Sales Force Strategy :
     - Are the role and objectives of personel selling in the marketing program positioning strategy clearly specified and understood by the sales organization?
     - Do the qualifications of salespeople correspond to their assigned roles?
     - Is the sales force of the proper size to carry out its function and is it efficiently deployed?
     - Are sales force results in line with management's expectations?
     - Is each salesperson assigned performance targets, and are incentives offered to reward performance?
     - Are compensation levels and ranges competitive?
    5-IMPLEMENTATION AND MANAGEMENT
     - Have the causes of all performance gaps been identified?
     - Is implementation of planned actions taking place as intended? Is implementation being hampered by marketing or other functional areas of the firm (e.g, operations,finance) ?
     - Has the strategic audit revealed areas requiring additional study before action is taken?

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