Will Dell
Meanwhile, up on Wall Street, Rollins-rage is becoming endemic among institutional investors who have lost money on Dell. In a "Heard on the Street" column yesterday, The Wall Street Journal cited no fewer than five analysts -- from such heavyweight investors as Bear Stearns
Personally, I haven't been along for the entirety of the 60% slide under Rollins' administration, but I feel the pain of those who have. Dell's depressing demise has me bummed for two reasons:
1. It was recommended in the February 2004 issue of Motley Fool Stock Advisor.
2. Two years later, it received back-to-back recommendations from Motley Fool Inside Value.
But I'm a firm believer in the philosophy of "one bad turn deserves a ... good one." So, for each of the bad turns listed above, I'm offering up a piece of Foolish advice to Dell, to help transform it from a "once" back into the "future" king of the PC space.
Tip No. 1: Two birds, one stone -- you do the math
What's the No. 1 criticism leveled at Dell? All together now: shoddy customer service. Customer service reps sitting who knows where, picking up and answering the phone who knows when, and providing advice that may or may not work.
Criticism No. 1 is usually followed by a second. There's nary a Lou Dobbs sound-a-like on TV, the radio, or in the blogosphere, but follows his xenophobic tirade against "offshore outsourcing" with a mention of Dell and its phone banks staffed by anonymous Indian techies. Oh, sure, companies like GE and Microsoft
We can boil these two critiques down to one: the fact that Dell's offshore customer service reps aren't doing a great job of "thrilling the customer." One solution to this problem, which i wrote about back in July of last year, is to hire more customer service reps here in the States. But that costs money, and Dell is trying to cut costs even as it improves "quality." A more cost-effective solution, I believe, would be to adopt a model such as the one that fellow Stock Advisor recommendation CDW
What makes CDW special ... is their "experts." An expert is a person I'm able to talk to about a certain IT topic, such as SPAM controls. I call up my rep asking which SPAM software they recommend and have experience with, he says "Hold on, I'll see if one of the Security Experts is available." Sometimes not, but I get a call back in an hour or they schedule a conference call ... It's not often that you get any kind of extra support like this.
Dell could imitate CDW's approach by reorganizing and retraining the customer service reps it already has. It could train teams of experts, qualifying them to handle particular hardware and software problems, and remove them from the day-to-day frontline ranks of phone reps. Then, back on the front line, the company could assign each of its customers -- "consumer" and "business" customers both -- a specific contact person to call when anything goes wrong. Or better yet, one contact at a call center here in the States, and another, 10.5 hours ahead of Eastern Standard Time in India. This would emphasize that Dell's Bangalore call center isn't about "service-on-the-cheap," but about ensuring there's always someone available to help, day (U.S.) or night (India).
Such a strategy would benefit Dell in two ways. First, it would ensure that a customer with a problem gets connected to a techie qualified to fix that problem. Second, it would eliminate the feeling of "distance" that a customer gets when speaking to a disembodied voice on the other side of the world. It's easy to rant against anonymous "phone reps in India." Once you attach a name to the voice, however, and let a customer talk with the same person whenever there's a problem, the distance contracts and customers begin to feel an attachment to "their" representative -- and to Dell as well. Such a strategy could boost customer satisfaction even as it cements customer loyalty (and promotes repeat sales).
Tip No. 2: Follow through
Of course, keeping the customer is just half the battle (and the second half, at that.) Before you can keep the customer, you must attract the customer. Judging from its market share decline in Q1 and its flat market share (according to IDC and Gartner) in Q2, Dell's having some trouble here, at least among non-corporate customers. (Meanwhile, Hewlett-Packard
In my Foolish opinion, this happened in large part because Dell lost its mojo. With the tiny exception of wrapping a snake around an LCD TV on its homepage, there's very little about Dell that evokes the concept of "cool" these days. While Apple
Earlier this year, it made a highly publicized purchase of Alienware, a maker of colorful, stylish, high-end machines. Theories as to the plan behind the action abound, but it seems pretty obvious to me that Dell was aiming to spiff up its bland beige box image and buy itself a little cool. So, my question would be: "Well?"
As in: "Well, you bought yourself the cool. So, when are you going to use it?" There was a time when -- beige boxes and all -- the company really was cool. Remember the Dell Dude? Sure, not everyone loved the on-air shill, but whatever you thought of the messenger -- or even of the bland, beige facts behind the message -- the message itself came across loud and clear: Dell is cool. You want one. You should buy one.
So I say again: Dell, now that you actually are cool, with your Alienware operation and all, why aren't we seeing you advertise that fact? I know there will be people who disagree with me for saying this, but I'm going to say it anyway: Bring back the Dell Dude, Dell.
Beaten-down stocks like Dell are precisely the kind we seek out at Motley Fool Inside Value . The stock has fallen 31% in price since we recommended it, but Philip Durell likes its long-term prospects. Read why with a free 30-day trial . Microsoft is also an Inside Value pick.
Much to his (short-term) chagrin, Fool contributor Rich Smith owns shares of Dell. In contrast to that stock, Fool's Rules (Ticker: DaRULZ) are up 40% in the past 52 weeks.
