Dell Hell

On 21 June 2005, Jeff Javis posted a blog stating that Dell’s machine is a lemon and their service is a lie which further progressed into a collective blogging which led to a devastating impact on Dell. Dell at that point of time did not realize the power of blogs as they were not widely used and thought that they could address issues at their convenience. In this blog, we will analyze what went wrong and how Dell should have responded to this crisis.

Prior to the Dell Hell saga, Dell was expanding aggressively and was involved in cost cutting through outsourcing various stages of its value chain at the expense of customer satisfaction. The entire underlying issue was therefore the failure of Dell’s customer support services and its inferior product quality as shown below:

1. Speed --> The response time in answering customers issues and delivery of products was extremely slow and inefficient

2. Off-shoring --> Customers were encountering languages difficulty towards the technical support services relocation to India and other countries from US and UK

3. Blunders --> Incorrect delivery details and loss of items

4. Technical Incompetence --> Dell’s technical support team were not proficient in solving technical issues

5. Inferior products --> Due to cost cutting, products were outsourced without sufficient quality control which led to defected goods

All these issues could have been easily resolved if Dell had placed more emphasis in customer support services and had enforced quality control on its products. To be more specific, Dell could have expanded the capacity of its customer services support to decrease the response time and demand standards from the distribution companies which Dell had outsourced to if not seek for liquidated damages if these companies were unable to uphold the standards. Furthermore, Dell could have provided language training for its customer services officers who were not proficient in English. Dell should also had recruited better engineers and provide training to ensure technical competency of its technical support team. All this can be solved by investing the right amount of money. Clearly, the management do not see these issues as their main priorities. They were just focusing on cutting cost and couldn’t care less about the rest. This might also be one of the main reasons why Michael Dell was asked to resume CEO role after being out of the company for 2 years.

Now, moving into what happened after the introduction of Dell Hell, we identify some outstanding issues or concerns which blew up the situation and led to the downfall of Dell.

1. Not tracking and responding to critical issues not only on the blogs but on the internet

2. Not being honest in admitting their faults --> pushing the blames to others (eg. It was the distributors’ fault in delivering the product slow or to the wrong address)

3. Misconception of the sellers being in control rather than the buyers --> not putting sufficient emphasis in listening to the customers

4. Not having sufficient channels for customers to voice their concerns

5. Inactive in engaging its customers to find out their problems

Thus, we see that if Dell had been more honest, admitted its mistakes, and resolved the issues promptly as in response to Jeff Javis’s blog. But before solving the issues, Dell should first find means to track customers concerns efficiently, and the most effective and efficient manner is to provide more channels for customers to voice their concerns. In the model context, we see companies using various online platforms such as Facebook, Skype, Blogs etc in communicating with their customers in receiving feedbacks.

On the positive note, Dell did tried to tackle the about issues by taking the initiative of investing $150m in their customer service operations in improving it. Furthermore, the launch of Dell’s official customer services blog coupled social media site IdeaStorm also helped lesser the impact.

In conclusion, we learned the power of internet and more importantly, never take customers inputs lightly. It is very difficult to rebuild a reputation but destroying it is extremely simple. Word of mouth is a very power tool or element in a business and one would want it to go the negative way as shown in Dell Hell.