Dell (NASDAQ: DELL) cannot get some of its hottest new products to market. According to The Wall Street Journal (subscription required), the company is trying to diversify away from selling PCs to businesses and pick up a larger sales footprint in the consumer market. New models with spiffy paint jobs and pricing set for students on their way to school have been central to the plans.
The trouble is that delays in parts and bad paint jobs are murdering the program. The Journal writes that "Dell has attempted to quell the mounting frustration over delays by addressing the issue in its company blog." How that will help mollify frustrated customers is a unclear. It may just make them more angry.
The move must be a bit humiliating for Dell. The company had customer service problem three years ago when it began to outsource the function to call centers in India. Dell had to bring in a customer czar to try to solve the problems. The company is selling its new PC in retail outlets including Wal-Mart (NYSE:WMT) which is a departure from its old "direct to customer" sales channel.
But, Wal-Mart can only sell what it gets.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
8-22-2007 @ 9:33AM
roudy11z said...
If part of Dell's problem is bad parts and bad paint jobs could it be that those jobs are done by union workers in the US? I'm probably wrong on this but this has been characteristic in other industries where a union is involved. They can slow things down and its hard to fire them so I've heard. This is just an opinion.
8-23-2007 @ 10:14AM
Tim said...
@roudy: computers are primarily assembled overseas, mainly in China. Sometimes Dell is able to ship the major components here and assemble in the U.S., but they are still made overseas. I'm pretty sure the factory where painting is occurring is overseas as well.
And how does talking to customers on a blog help anyone? It gives customers the latest information on their largely backlogged orders direct from the higher ups at Dell. The reality is that the complete information on order details will not only be difficult to filter to all call centers, but every person won't portray it the same. Their reasons behind the delay will vary wildly and as these particular customers compare notes in online discussion forums, they will suspect foul play and their irritation will grow. The blog serves as a beacon for those searching for answers outside of regular channels and lets Dell get their message out. Yes there is going to be a lot of negativity directed at them in the process, that is expected from an impatient public who spends most of their time surfing the web and is used to instant-gratification. But when you consider Dell's options are to ignore their customers completely and work in silence, or tell them the straight truth and keep them informed - which do you think is the better choice for the customers, ignoring overhyping traditional media? It's funny that Reuters saw the news on the blog and the negative reaction from customers, automatically stating that Dell was having serious problems and it was part of the reason their stock fell. Any online-only news publication would realize that is one way for companies to communicate today and that Dell is just trying to keep their customers informed.
8-24-2007 @ 7:01AM
roudy11z said...
I appreciate Tim's comments (#2). I now have a clearer picture of how these things can work in the computer business. Hey,you never know till you ask I heard. Thanks again Tim.