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Customers `Must Be Pleased, Not Just Satisfied'


Cover Story: DELL COMPUTER

CUSTOMERS `MUST BE PLEASED, NOT JUST SATISFIED'

Friday, 7:30 a.m.: Time for Dell Computer Corp.'s weekly Customer Advocate Meeting, "The Hour of Horror." Employees, from top managers down to assembly workers, pore over customer complaints and employee suggestions. At a recent meeting, participants hear how a customer received the wrong order; how too many calls reached voice mail; and how 80 internal test calls resulted in four unsatisfactory answers. Whatever problems aren't fixed in a week get reviewed every Friday until they are solved.

Such unending scrutiny of customer needs is the key to success at Dell Computer, the eight-year-old mail-order PC marketer. Dell's first-quarter profits rose 96%, to $20 million, on a doubling of sales, to $366 million. Behind the stellar numbers is a company credo that makes every employee focus on selling. All employees memorize the "Dell Vision," which states in part that a customer "must have a quality experience, and must be pleased, not just satisfied." Says Michael S. Dell, the company's 27-year-old founder, CEO, and author of the creed: "People who come here and don't gravitate to that don't last long."

DETAIL WORK. Now, the Dell Vision faces its toughest test. Compaq Computer Corp., once a seller of high-priced PCs, is meeting Dell on its own turf with a new PC priced at a low $899 and beefed-up customer services. Dell has cut prices on its own line, and its 100 highest-paid executives have taken a 5% pay cut. Most analysts expect the Austin (Tex.) company to suffer margin erosion but keep its market share, thanks to its mail-order cost advantage. At Dell, operating costs are 18% of revenues vs. 26% at Compaq. But Michael Dell, who hawked IBM clones from his University of Texas dorm, is also adding new services and stressing his credo more than ever.

Company credos, of course, are just so much corporate corn unless they're backed up by the sort of detail work Dell stresses. When one customer complained that he had ordered a Word for Windows package but received a Word for Windows License Pack instead, a customer-advocate meeting redesigned an internal form, distinguishing the two products by placing one in italics. Such actions have helped Dell cut purchase-order errors from 30% of all orders 17 months ago to 3% in June.

Constant training helps Dell maintain its edge. A core program lasting up to five weeks includes course work and such exercises as having an employee unpack a Dell computer. The idea is that staffers experience what customers go through when they open the box. Later, sales employees receive advanced training in such skills as handling big accounts and creating a new sales territory. Students completing each of six courses can check off each course on a T-shirt. A shirt with all the courses checked off is a badge of honor.

Nonsales executives often team up with salespeople to clinch a deal. Last year, for example, G. Glenn Henry, senior vice-president of the product group, helped Dell salespeople land the Price Waterhouse account. The accounting firm wanted to know more about Dell's upcoming products, so Henry produced a prototype of a future Dell PC for a Price Waterhouse team to examine. Henry, an IBM veteran, rarely had such customer contact in his 21 years with Big Blue. "At IBM, I got the impression that the sales force wanted to control the customer. Here, the sales force sees my team as an advantage," he says.

At Dell, the contact with customers can reach a high level indeed. Mark Hildebrand, manager of network and computer operations for Banyan Systems Inc., a software services provider that uses more than 100 Dell PCs, rarely gets to meet with CEOs of the companies he deals with. But recently he met with Michael Dell, who surprised Hildebrand: "He asked me what I'd like to see in the machines. He actually took notes." With Dell's superior brand of selling, no wonder some of the company's biggest established rivals are taking notes, too.Stephanie Anderson Forest in Austin


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