Many attribute Dell's fall from grace to its insensitive customer service policies which were largely magnified in tech celeb, Jeff Jarvis' blog in '05.
Back in the fall of 2000, Dell released a brilliant ad campaign featuring Steven, a goofy kid able to persuade his parents and others to buy a Dell. By the way I cannot resist mentioning Steven's fate (aka Benjamin Curtis), in 2003 he was arrested for purchasing pot in LES, he's been m.i.a. since.
I remember buying my first laptop before college in the summer of 2001, after consulting a techie friend I chose Dell. The feeling of owning my first laptop was indescribable, I felt important, powerful, "Duuuude, I got a Dell!!" My first Dell Inspiron lasted 4 years, my second Dell Inspiron lasted 4 years and my third Dell Studio, well it's nearly 1 and a half years. For me it is not that I am a Dell fanatic there is just no other company that has convinced me to switch and I cannot go Mac yet, pride will not let me. While I have known about Dell's general demise through diminishing shelf space and lack of gripping campaigns (Justin Long was a good attempt), I have no idea how it's happened. In basic Google research two main causes emerge, however, for the sake of appealing to a powerful authority I will focus on Jeff Jarvis and the consumer's voice, as this cause is the one in which we are in control of and need to address daily as future business and political leaders.
Few facts on Jeff Jarvis:
1) American journalist
2) creator of Entertainment Weekly
3) 9/11 experience (live reporter) leads him to early blogging
4) BuzzMachine, his blog
So Jeff is an aberration, a blogging baby boomer, blogging years before most knew what blogging was. It is summer 2005 and following a slew of vicious blogs against Dell after purchasing a lemon, Jarvis burns the brand. The tech world is shocked by Jarvis' power as a blogger and moreover shocked by Dell's ignorance and lack of foresight in handling customer complaints. Dell replies, creating an in house blogging position, filled by Lionel Menchaca, a 14yr Dell veteran. Where was Lionel when the nasty complaints were coming in? After the incident (Jarvis was refunded) BuzzMachine's traffic doubled to nearly 10,000 daily visits. Jeff set a precedent, his blog did lasting damage and suddenly the blogging world had tangible evidence of a new channel in which the consumer could be heard and felt. Today among thousands and thousands of blogs we realize Jarvis' triumph over Dell came largely through his credibility and large following and while blogs give individuals virtual voices, most are not heard. To be clear, giving an unknown a virtual voice did not change the landscape, it was giving a credible voice a virtual mic that gave him power unlike ever before!!
How should Dell have handled Jarvis' blogs? Is it clear Dell knew fully of Jarvis' posts throughout the summer of 2005? Dell like every other company was aware of customer dissatisfaction, but what I do not understand was their trite, passive approach to dealing with customer issues. The company with all the young appeal of "Dude, I got a Dell." to "We're aware of the problem and we're seeking a solution." is where I get confused. Was there no one in the Dell ranks that suggested a company blog or at least someone who could follow the blogging community and spread the word at work? Why was Micheal Dell at the start of the rumors over poor service not directly addressing customer issues publicly and talking about the setbacks and ways the company was working to overcome the issues? Dell's handling or rather mishandling of early rumors in 2005 is similar to an accountant who cannot balance her checkbook. Why were the corporates hiding? What was so wrong with being forthcoming about product issues? A simple answer, a big company with many issues and too many employees too close to the problems to have perspective, also fear of a tumbling stock price and lower bonuses. Michael Dell's problem was not that he was unaware or even underestimated the power of blogging, it was his inability to convince the public he was on top of the issues.
The second blow to Dell's reputation that deserves mentioning and may be more of the reason for a hit in stock price came at the end of 2005. Dell in 2004 had emailed Intel, complaining of expensive and slow parts leading to being uncompetitive in the market. This email as mentioned in Intel's antitrust suit, may have been interpreted as a threat to switch to AMD as a part source. With Intel controlling a huge part of the processor market any complaints may have given them incentive to cut volume deals with a more loyal customer and major Dell competitor, HP. Ultimately, HP proved to be able to outperform Dell based on manufacturing costs. Coincidence, mmmm I think not?!
The exercise for companies today is the same as it was 100 years ago. They must deal with customer satisfaction, unless of course they are Intel and control the market, in which case they need to focus on evading antitrust suits. Dell lost site of pleasing its customer and the blog left a nasty wound, one that may have cost Dell its life in the end. Companies must follow their customers, if customers are blogging, they must be there. If customers are going to the moon, they better offer deals when they get there.
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