Is the biggest blogging story of 2007 the resignation of chief executive Kevin Rollins at Dell? As investors.com reports, did Jeff Jarvis of BuzzMachine help Dell’s earnings fall, and in the process seal the fate of key executives at Dell? No, is the simple answer to that question. Lackluster profits and a competitive marketplace had more to do with Dell’s troubles, as well as the changes among the company’s top managers. The company did not keep up with the changes in the marketplace. Competitors reduced their cost structures, leaving Dell without a key differentiator of competing based on price, as design has not been one of Dell’s strong points. Competitors like HP also earn more from services.
Yet Dell Hell did play a role in undermining the company’ s credibility in the minds of customers and investors, but what effect the blog posts had on overall sales we will never know. What we do know is that Dell eventually responded: first by developing a blog direct2dell that initially failed to focus on customer service, and then after a few complaints – again from Jeff Jarvis, by focusing its efforts on solving customer service problems. This discussion between a David H. Deans of the Digital Lifescapes blog, and Dell employee, ‘Richard’ demonstrates how much Dell has changed in the last year. Dell still has a long way to go. Michael Dell in his email to employees as re-published on the Austin American-Statesman said, “To summarize, we will differentiate with CE (customer experience); deliver value, but go beyond this with our unique understanding of customers; move to Solutions and Services; use database marketing and targeting for smaller customers; leverage our unique supply chain; regain our cost position; and build some new sources of sustainable profit including using intellectual property to differentiate. The Dallas Morning News reports Dell is spending $150 million on beefing up customer service, and bringing more customer service in-house.
Five senior executives at the company have resigned or are retiring, and the number of executives reporting to Michael Dell will be reduced from 20 to 12 in a major company restructuring. Falling earnings and profits were the reason for the changes at the executive level, but those financial results probably would not have happened so quickly if it were not for Jeff Jarvis and Dell Hell.
The story demonstrates that any company working in a competitive technology market must pay attention to the content customers generate online, or face the repercussions of poor results. Though hard to bear at the moment, Dell will benefit from responding to customer feedback, and in turn Dell customers will also benefit. If Dell becomes the new gold standard for online customer service and technical customer support through blogging, its competitors have a lot to be concerned about if they fail to keep up and follow the same conversational marketing strategies.
The preceding article was originally published on PR Communications.
