March 1, 2007 4:00 AM PST
Dell's new focus: Don't look back
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Dell is expected to unveil its financial report for its 2007 fiscal year Thursday after the stock market closes, bringing an end to one of the worst years in the company's history. It's also expected to disclose some of the findings from an internal investigation into its accounting practices, one of the darker clouds hanging over the company.
A lot has changed at Dell over the last fiscal year. Kevin Rollins, the management wizard brought in a decade ago to help run the company, is spending more time with his family after resigning in January. Rollins is just one of several Dell executives to head for the exits after a tumultuous year that included several earnings misses, an enormous battery recall, the accounting investigation, and the loss of its status as the leading PC company on the planet.
IDC analyst
So what's next? With a new management team in place, Dell & Co. are likely to focus on strategy. The company has already warned investors that its fourth-quarter revenue and profits would be worse than expected, but Dell has shown a penchant for making big product announcements along with bad earnings news, such as adopting Advanced Micro Devices' processors and sinking $150 million into new customer support problems.
While it's hard to say if another big announcement is coming, it's clear to some that Dell has to show it can change, maybe even tweak its devotion to selling directly to customers and controlling as much of its own manufacturing process as possible.
"For years they didn't have to do that," said Richard Shim, an analyst with IDC, "because they kept winning."
During its rise to the top of the PC market, Dell boasted of its manufacturing and supply-chain efficiency. It still builds just about all of its PCs internally in manufacturing plants
But Dell and the market have changed. Notebooks make up an increasing percentage of PC sales, and Dell's costs to build a notebook itself are actually a little higher than those elsewhere in the industry. And for all the talk about efficiency, Dell has lost a little of its momentum in this area and is actively looking for ways to improve, said Roger Kay, an analyst with Endpoint Technologies Associates.
Enter Michael Cannon, the former CEO of outsourcing powerhouse Solectron. Cannon was given control of Dell's entire manufacturing organization, which was previously run on a regional basis. Given his background, Cannon's appointment has touched off a lively discussion within Dell about the merits of how far Dell should go in a potential shift toward using more of the "ODM (original design manufacturer)" model used by HP and others, Kay said.
But the most prominent change at Dell could involve a change in its distribution model. The company has been experimenting with a Dell-branded store in Dallas, and plans to open others in upstate New York and Austin later this year. These stores don't carry inventory, but allow consumers to get their hands on Dell's products before making a purchase.
This is especially important for products like notebooks and gaming desktops like Dell's XPS line, which look better in person than they do on a Web page. But these types of stores don't allow for instant gratification, always high on a shopper's mind, said Samir Bhavnani, an analyst with Current Analysis that tracks the retail PC industry.
If Dell wants to reach more consumers--and decides to shed the direct-model dogma--there are a few routes it could take, Bhavnani said.
See more CNET content tagged:
manufacturing, Richard Shim, Kevin Rollins, supply chain, Dell
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BUT, we are a different customer base than most since we have our own in-house Dell certified Techs and don't have to go through the "Support call to hell" channel that I have also been through to support personal use customers and that I do not want to repeat.
If Dell honestly wants to gain more market share then they need to take a more radical approach to their "Listening to the customer". Currently their mainstay is business customers and they have regular meetings with Fortune 500 company reps to discuss their want and needs and tailor the systems to that crowd for the Dell OptiPlex line.
I propose that Dell have the same regular meetings but with a diverse end-user base including:
1. White box builders - A potential base for their XPS line. These people would represent a more tech saavy group and bring that to the table.
2. Past Dell customers that have not gone back to Dell for repurchase because of bad experiences. This would could include tech saavy users but also a focus group of non-technical users should be included since Techies don't rely on Dell's tech support as much and can bring that to the table.
3. People that have never bought a Dell because of their perceived repuation. This would be a diverse audience and would probably bring the most to the table since they will have reasons either passed to them or perceptions that can be changed in ALL aspects of Dell's operations.
This group should comprise a wide demographic as well since preferences sometime lay with loyalties to more local companies.
The group should be kept together for as long as possible and used as testers for potential new products as well as been made aware of customer feedback about support.
This would be a "Slam Dunk" for Dell both in getting real world data and as a Marketing tool once the feedback starts to pay off.
Michael, you are in between a rock and a hard place and this is one of your few options to get a real foothold back into the end-user personal computer market. Am I betting that you will do this, 'NO' since History has shown the only people you listen to are Intel and Microsoft on the business side and fortuen 500 companies on the sales side.
I too am a white box builder and I know the "quality" (or lack thereof) of Dell's personal line but if I knew that I could buy a system that would be of the same quality that I could build then I would probably be buying Dell's personally.
END-USER FOCUS GROUP MICHAEL!
We had signed up for the white box, too the little online quizzes, and never sold a one. Perhaps our customer base were the cheapest on the planet, perhaps they were just more savvy. But in every case the question was "Why should we buy from you when we can buy from Dell for $200 less?"
Now granted, we made money from re-imaging the Dells for their environment (even if a SOHO 1-user environment), but at the end of the day to be competitive we had to take a loss on each Dell white box in order to get the deal away from Dell.
During a phone survey, I told the Dell channel rep that what we needed were competitive machines that couldn?t be had for $200 less from the 1-800 order takers. He laughed. Said if the reseller channel dried up tomorrow it wouldn't hurt Dell a nickel.
Dell's recent efforts to shore up their tech support are noteworthy, primarily as they are offering $12 - $17 an hour in a $35- $40 an hour market for phone support techs. I have been contacted by no less than 3 recruiting firms who want me to bring 18+ years of experience to the phone for $12 an hour. Get real!
BUT, we are a different customer base than most since we have our own in-house Dell certified Techs and don't have to go through the "Support call to hell" channel that I have also been through to support personal use customers and that I do not want to repeat.
If Dell honestly wants to gain more market share then they need to take a more radical approach to their "Listening to the customer". Currently their mainstay is business customers and they have regular meetings with Fortune 500 company reps to discuss their want and needs and tailor the systems to that crowd for the Dell OptiPlex line.
I propose that Dell have the same regular meetings but with a diverse end-user base including:
1. White box builders - A potential base for their XPS line. These people would represent a more tech saavy group and bring that to the table.
2. Past Dell customers that have not gone back to Dell for repurchase because of bad experiences. This would could include tech saavy users but also a focus group of non-technical users should be included since Techies don't rely on Dell's tech support as much and can bring that to the table.
3. People that have never bought a Dell because of their perceived repuation. This would be a diverse audience and would probably bring the most to the table since they will have reasons either passed to them or perceptions that can be changed in ALL aspects of Dell's operations.
This group should comprise a wide demographic as well since preferences sometime lay with loyalties to more local companies.
The group should be kept together for as long as possible and used as testers for potential new products as well as been made aware of customer feedback about support.
This would be a "Slam Dunk" for Dell both in getting real world data and as a Marketing tool once the feedback starts to pay off.
Michael, you are in between a rock and a hard place and this is one of your few options to get a real foothold back into the end-user personal computer market. Am I betting that you will do this, 'NO' since History has shown the only people you listen to are Intel and Microsoft on the business side and fortuen 500 companies on the sales side.
I too am a white box builder and I know the "quality" (or lack thereof) of Dell's personal line but if I knew that I could buy a system that would be of the same quality that I could build then I would probably be buying Dell's personally.
END-USER FOCUS GROUP MICHAEL!
We had signed up for the white box, too the little online quizzes, and never sold a one. Perhaps our customer base were the cheapest on the planet, perhaps they were just more savvy. But in every case the question was "Why should we buy from you when we can buy from Dell for $200 less?"
Now granted, we made money from re-imaging the Dells for their environment (even if a SOHO 1-user environment), but at the end of the day to be competitive we had to take a loss on each Dell white box in order to get the deal away from Dell.
During a phone survey, I told the Dell channel rep that what we needed were competitive machines that couldn?t be had for $200 less from the 1-800 order takers. He laughed. Said if the reseller channel dried up tomorrow it wouldn't hurt Dell a nickel.
Dell's recent efforts to shore up their tech support are noteworthy, primarily as they are offering $12 - $17 an hour in a $35- $40 an hour market for phone support techs. I have been contacted by no less than 3 recruiting firms who want me to bring 18+ years of experience to the phone for $12 an hour. Get real!
<a class="jive-link-external" href="http://www.goodells.net/dellrestore/fixes.htm" target="_newWindow">http://www.goodells.net/dellrestore/fixes.htm</a>
<a class="jive-link-external" href="http://www.goodells.net/dellrestore/fixes.htm" target="_newWindow">http://www.goodells.net/dellrestore/fixes.htm</a>
I've seen dell desktops accumilate so much dust that they catch fire or blow out their power supply.
I just love telling customers that their 230W power supply will cost over $120 to replace because it's a dell power supply and it's the only one that will fit in the case!
I also love their samsung memory, which keeps shorting out.
Their laptops, however, seem to be very solid. I have an old inspiron 7000 which I still use to surf the net and diagnose network problems and a friend of mime recently got herself a new laptop with a very nice widescreen.
I can NOT stand their Latitude series. They turned into **** around 2003 or so. Esp their touchpad. Moving from Synaptics to Alps was the worst decision they could make. I have to bring an external mouse with me when I'm setting up a new Latitude. The mouse drives me completely NUTS.
The biggest deal prior to the pentium M and the Core series was the rate at which Dell laptops overheat.
Consistently we are replacing motherboards due to heat issues. Again this is on older hardware and such issues have diminished with the Core series of CPU's but still.
PS- The 5150 series of Inspirons are a joke.
I've seen dell desktops accumilate so much dust that they catch fire or blow out their power supply.
I just love telling customers that their 230W power supply will cost over $120 to replace because it's a dell power supply and it's the only one that will fit in the case!
I also love their samsung memory, which keeps shorting out.
Their laptops, however, seem to be very solid. I have an old inspiron 7000 which I still use to surf the net and diagnose network problems and a friend of mime recently got herself a new laptop with a very nice widescreen.
I can NOT stand their Latitude series. They turned into **** around 2003 or so. Esp their touchpad. Moving from Synaptics to Alps was the worst decision they could make. I have to bring an external mouse with me when I'm setting up a new Latitude. The mouse drives me completely NUTS.
The biggest deal prior to the pentium M and the Core series was the rate at which Dell laptops overheat.
Consistently we are replacing motherboards due to heat issues. Again this is on older hardware and such issues have diminished with the Core series of CPU's but still.
PS- The 5150 series of Inspirons are a joke.
<a class="jive-link-external" href="http://www.onehandshake.blogspot.com/" target="_newWindow">http://www.onehandshake.blogspot.com/</a>
Dont take any notice of the online vote fiasco - it was gate crashed by open source fanatics and cross posted on virtually every Linux / legacy software mailing list and blog in existence.
Real Dell customers want an OS that just works.
Lol at trying to tell them they have to compile software before they can run it on Linux. And that they have to patch their PCs 3 times more often than with Windows. Linux is making zero impact of Windows sales for those and many other reasons.
And in the server market, the pace of migrations from Linux / UNIX to Windows is increasing. Apache just dropped below 60% market share for the first time in years as a direct result of cumulative Linux to Windows migrations.
Companies are fed up with being constantly hacked and having servers defaced and having to install zillions of patches with resulting compatability issues in the Linux / LAMP world.
<a class="jive-link-external" href="http://www.onehandshake.blogspot.com/" target="_newWindow">http://www.onehandshake.blogspot.com/</a>
Dont take any notice of the online vote fiasco - it was gate crashed by open source fanatics and cross posted on virtually every Linux / legacy software mailing list and blog in existence.
Real Dell customers want an OS that just works.
Lol at trying to tell them they have to compile software before they can run it on Linux. And that they have to patch their PCs 3 times more often than with Windows. Linux is making zero impact of Windows sales for those and many other reasons.
And in the server market, the pace of migrations from Linux / UNIX to Windows is increasing. Apache just dropped below 60% market share for the first time in years as a direct result of cumulative Linux to Windows migrations.
Companies are fed up with being constantly hacked and having servers defaced and having to install zillions of patches with resulting compatability issues in the Linux / LAMP world.
Dell used to have great customer service before they offshored it. Now it's absolute hell dealing with them. Rude, ignorant staff who don't speak English, transfer you endlessly, won't take responsibility for your problem, and don't live up to their commitments. The only way to get service for a Dell now is to take it to a local service shop and pay for the repairs.
Dell used to have great customer service before they offshored it. Now it's absolute hell dealing with them. Rude, ignorant staff who don't speak English, transfer you endlessly, won't take responsibility for your problem, and don't live up to their commitments. The only way to get service for a Dell now is to take it to a local service shop and pay for the repairs.
I've posted some of the conversation with Rep_Jeremy who told me to download Microsoft Virtual PC and then install XP under Vista.
<a class="jive-link-external" href="http://billpstudios.blogspot.com/2007/02/dell-say-no-to-xp-recommends-virtual.html" target="_newWindow">http://billpstudios.blogspot.com/2007/02/dell-say-no-to-xp-recommends-virtual.html</a>
I've posted some of the conversation with Rep_Jeremy who told me to download Microsoft Virtual PC and then install XP under Vista.
<a class="jive-link-external" href="http://billpstudios.blogspot.com/2007/02/dell-say-no-to-xp-recommends-virtual.html" target="_newWindow">http://billpstudios.blogspot.com/2007/02/dell-say-no-to-xp-recommends-virtual.html</a>
I understand their customer service is outsourced to India and as far as Im concened Dell can move to India and sell to that market...theur service sucks....
I work at a University and we have a contract for our standardized imaged systems with Dell and the ONLY reason it is working out is because we have in-house Dell trained techs that can get what we need in either hours or within a day at most and don't have to go to India to get it.
But one of our components even with that had enough and DID go to Gateway so consider your comments as not just a joke but reality with a smile.
I am a white box builder for my personal systems only because I want quality reliable components and not what some company can get for the lowest bid.
But if I had to buy an online built system it would probably be from HP at this point because they do seem to care now. Gateway may have changed but at one point they were not much better than Dell in their end-user support.
Write Michael Dell an email at michael_dell@dell.com but unless your email domain is coming from a large company you will never hear anything back. If you do write him from a large buyer of their products then you will hear from your sales rep within a day or so.
So goes to prove that they don't care about what end-users think, rather only large buyers.
Fred Dunn
I understand their customer service is outsourced to India and as far as Im concened Dell can move to India and sell to that market...theur service sucks....
I work at a University and we have a contract for our standardized imaged systems with Dell and the ONLY reason it is working out is because we have in-house Dell trained techs that can get what we need in either hours or within a day at most and don't have to go to India to get it.
But one of our components even with that had enough and DID go to Gateway so consider your comments as not just a joke but reality with a smile.
I am a white box builder for my personal systems only because I want quality reliable components and not what some company can get for the lowest bid.
But if I had to buy an online built system it would probably be from HP at this point because they do seem to care now. Gateway may have changed but at one point they were not much better than Dell in their end-user support.
Write Michael Dell an email at michael_dell@dell.com but unless your email domain is coming from a large company you will never hear anything back. If you do write him from a large buyer of their products then you will hear from your sales rep within a day or so.
So goes to prove that they don't care about what end-users think, rather only large buyers.
Fred Dunn
1. Being on the phone an average of 2 hours.
2. CSR's who are crabby or outright arrogant pricks.
3. Accents so thick you need a machete to cut through it.
4. Troubleshooting processes that really are above what the average customer is capable of. (PS. OK we are expected to take ESD precautions but the customer is not?)
5. CSR's who are NOT experienced enough. Some of the people I run across are geeks. Some even have BA's in computer science. Consistently I'm being told that the people on the phone are script readers. Not trouble shooters. So for the average person this may be fine. For the geeks of the world it?s just pissing them off something fierce when they already told the CSR that they ran the diagnostics, but they need to do it again....because. Just because. Many of the things they are being asked to do to their system could easily be dismissed with someone competent in troubleshooting.
If Dell is serious about regaining that market share from HP they NEED to do something about their customer service. I do my damnedest to mend the relationship while on site but there is only so much I can do for a truly pissed off customer who basically tells me they will never buy another Dell ever again. If they don't fix this Dell will continue to bleed customers to HP/Apple/Toshiba/Etc.
Customer SERVICE. Taking care of customers so that they become repeat customers.
their loyal customers to other manufacturers. Their earnings will
continue to decline and will soon be buried in debt and end up
losing factories, other assets and IP to India and China. To top it
off, government regulators currently investigating Dell, will
probably dig-up some nasty accounting practices which usually
happens to troubled companies as they try to get "creative" in
balancing their numbers. Best final thing for them to do is...
1. sell all inventory to clearance shops and internet stores such
as computergeeks.com
2. after selling all assets and IP, give the money back to stock
holders and close shop
what goes around, comes around :P
1. Being on the phone an average of 2 hours.
2. CSR's who are crabby or outright arrogant pricks.
3. Accents so thick you need a machete to cut through it.
4. Troubleshooting processes that really are above what the average customer is capable of. (PS. OK we are expected to take ESD precautions but the customer is not?)
5. CSR's who are NOT experienced enough. Some of the people I run across are geeks. Some even have BA's in computer science. Consistently I'm being told that the people on the phone are script readers. Not trouble shooters. So for the average person this may be fine. For the geeks of the world it?s just pissing them off something fierce when they already told the CSR that they ran the diagnostics, but they need to do it again....because. Just because. Many of the things they are being asked to do to their system could easily be dismissed with someone competent in troubleshooting.
If Dell is serious about regaining that market share from HP they NEED to do something about their customer service. I do my damnedest to mend the relationship while on site but there is only so much I can do for a truly pissed off customer who basically tells me they will never buy another Dell ever again. If they don't fix this Dell will continue to bleed customers to HP/Apple/Toshiba/Etc.
Customer SERVICE. Taking care of customers so that they become repeat customers.
their loyal customers to other manufacturers. Their earnings will
continue to decline and will soon be buried in debt and end up
losing factories, other assets and IP to India and China. To top it
off, government regulators currently investigating Dell, will
probably dig-up some nasty accounting practices which usually
happens to troubled companies as they try to get "creative" in
balancing their numbers. Best final thing for them to do is...
1. sell all inventory to clearance shops and internet stores such
as computergeeks.com
2. after selling all assets and IP, give the money back to stock
holders and close shop
what goes around, comes around :P
As for me anything Dell does is a lost cause. Once burned, twice shy!
As for me anything Dell does is a lost cause. Once burned, twice shy!