Law Office Computing
September 2005
Winton Woods
Ding Dong Dell-The Emperor’s Clothes
For years, Dell Computer Corp. (now Dell Inc.) was at the top of the heap. They sold more product and had a higher profits than most anybody in the industry. They actually ran a lot of people out of business with aggressive pricing and quality service. But that was then and now is now. Last week, the Wall Street Journal reported that Dell had record sales, but its profits were down. The stock dropped 3% on the news. Sales up, stock down? What's happening here? I have an idea and it comes from personal experience: declining product quality, declining levels of customer support, off-shore strategies and overly aggressive price cutting.
You might have read just a year ago, that Michael Dell retired as the CEO of Dell Computer Corp. and turned the company over to the then President Kevin Rollins. Rollins had been Michael Dell's right hand man for many years. Dell's focus was upon creativity and customer service, and that was how he built the company. Rollins on the other hand was renowned as a tightfisted money man, a bean counter if you will, who kept Dell's creativity in check. They made a good team but with Dell out of the picture, Rollins has instituted many cost-cutting procedures such as off shoring customer service operations and reducing the quality of customer support. At the same time, he cut prices dramatically reducing, for example, the price of the computer that sold just a year ago for $450 to just $299. Dell Inc. has sold a lot of those discounted computers. Apparently, Rollins believes that you can lose money on every sale but make it up with volume. It used to be that Dell was at the very top of the list in terms of consumer appreciation for the quality of its products and the high-level of product support. Since Rollins has taken the reins my experience has been that Dell consistently drops the ball in that respect. I base my opinion upon three transactions that have occurred within the last year. It all started with the purchase of a high-end workstation computer that turned out to be a lemon. I spent endless hours with offshore customer support folks who appeared to know almost nothing that was not on their pre-set problem-solving computer screen. After much effort and a tangle of e-mail I was able to get to talk to an actual human being in Texas, who to be fair, did her best to straighten out the mess. But the problem was too big for her, and I ultimately was forced to initiate a chargeback on my American Express card in order to get Dell to take back the defective machine.
The second transaction involved the purchase of a Dell Pocket PC that was supposed to be charged to my American Express card. Instead for some reason unbeknownst to anyone, the charge was made to my Dell charge account. Since I never use the Dell charge account, I was unaware that the mistake had been made. I discovered the mistake in a pretty bizarre way. One day I received a phone call from a really obnoxious person who was obviously calling from India claiming I owed Dell $15. He wanted immediate payment and proposed that I give him my bank account information so that he could create an electronic check for the $15. I assumed that the phone call was fraudulent, and just another of the many phishing, operations that now abound on the Internet. Indeed one of the hallmarks of Internet phishing is an attempt to get consumers to disclose personal information such as bank account numbers. And, I felt secure in my assumption because I had had no transaction with Dell that would generate a $15 charge. I hung up the phone. It turned out, however, that the fellow from India was not doing international Internet phishing, but was in fact attempting to collect a $15 late fee on the account that I had already paid by American Express. I won't go into all of the gaudy details, but the bottom line is that Dell continues to charge me a $15 late fee for every month that I have not paid. The original late fee and the late fees on the late fee now amount to about $45, and I'm starting to get aggressive telephone calls from debt collectors using automated telephone calling machines and a nasty voice. Of course, since I never had an actual balance that could incur the original late fee the following late fees on the late fee are, aside from being illegal, just plain wrong.
The only way Dell could allow its reputation to be drawn through the mud by this kind of tawdry financial mismanagement, starts at the top, where demands to increase sales at all cost originate.
The third transaction involved a GPS system that I bought for my handheld computer, thinking I could save a bundle over the cost of a built in system in my car. Unfortunately, the GPS system that Dell sold for my nice little Axim x50 pocket computer didn't work. I immediately notified Dell that it did not work and asked for a RMA number so that I could return the product to them under their “total satisfaction” guarantee. I got no response. A few days later, I tried again, this time to a different e-mail address listed on their web site. Again, I got no response. I tried a third time with the same result and was finally forced to initiate another chargeback on my credit card.
Both of my chargebacks resulted in American Express securing RMA numbers for both products so that I could return them. I did so and at this writing, while the products have been delivered to the proper return warehouse, I have not received credit on my American Express account for the products.
When I go on the Internet, I learn that, sadly, I am not alone. The deterioration in Dell customer service is a constant theme. Ten years ago, when Apple Computer went down the same ill-conceived path, they virtually dropped off the edge of the earth. It was only the return of Steve Jobs and his remarkable vision that brought them back to profitability. I don't know how bad things have to get at Dell before Michael Dell returns. But I bet he has enough of an interest in the company that he built that he will come back just as Steve Jobs did.
We shall see what happens to Dell, and to Kevin Rollins, but in the meantime all of us have concerns about where to purchase computers. Over the years, the PC Magazine customer satisfaction surveys have indicated an increasing respect for the quality and service offered by local providers. I have come to the conclusion that the amount of money saved by purchasing computers online or through the mail is more than offset by the trouble associated with fixing problems associated with low quality machines. At the same time, I have been impressed by the value of high quality service from local concerns expressed by the readers. A few years ago there was very little competition at the local level. But now that the general knowledge of computer technology is so widespread, there are many local technology concerns that can provide you with a high quality product and give you high quality service at a very competitive price. You may have to check around a bit to find companies that have good reputations for product quality and customer support but they are out there now, and when you find them I suggest you that you get to know your local geeks. That's skinny kid that used to skateboard in your driveway is probably more knowledgeable about computers than most so-called experts were 10 years ago. She has also grown up and might be running the computer store just down the street. At the moment that seems like your best bet. Like JoJo in the Beatles song it may be time to go home.