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 having more to do with Dell’s troubles and the changes among the company’s top managers. The company did not keep up with the changes in the marketplace as competitors reduced their cost structure and built better designed personal computers, leaving Dell without a key differentiator if no longer able to compete on price, as design has not been one of Dell’s strong points. Competitors such as 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, what effect the blog story had on overall sales we will never know, we do know that Dell eventually responded, one by developing a blog direct2dell that at first failed to focus on customer service, and after a few complaints, again from Jeff Jarvis, focused their efforts on solving customer service problems. This discussion between a David H. Deans of the Digital Lifescapes blog, and Dell employee Richard at Dell demonstrates how much Dell has changed in the last year. Dell still has a long way to go, Michael Dell in his e-mail 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 reduce from 20 to 12 in a major company restructure. 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 otherwise face the danger of poor results. Though hard to bear at the moment Dell will benefit from responding to customer feedback, and in turn Dell customers will benefit in return. If Dell becomes the new gold standard for online customer service and technology customer service through blogging, its competitors will have a lot to be concerned about if they fail to keep up and follow the same conversational marketing strategies.