The Customer Service Survey
VocaLabs' weblog providing news and commentary on the challenges of providing good customer service.
Dell Continues to Dig
Monday - November 28, 2005 11:46 AM in
Del''s continuing customer service nightmare has been a recurring topic here for a while. For those who haven't been following the story, after a prominent blogger wrote at length about the terrible customer service he received when trying to get his Dell laptop fixed under warranty, it drew other horror stories out of the woodwork, and eventually became an article in Business Week.
We've been using this as something of a case study of the very tangible costs of cutting customer service. Two things are clear: Dell has been cutting back on the level of customer service it provides, and the company is receiving lots of bad publicity as a result.
How much did the company save by cutting back on service? I don't know, but I'm guessing that it is less than $200 million per quarter. $200 million is the amount the company's sales fell behind forecast for its third fiscal quarter. Second quarter sales also came up short.
How much of that $200 million shortfall is due to customers staying away because of bad publicity over customer service? Again, I don't know, but I'm guessing that the company's bad press is a significant factor.
Dell used to have a reputation for stellar service. But good reputations are earned by the teaspoon and lost by the gallon. By trying to save some money on service, the company has (unfortunately) worked itself into a corner: even if it begins spending lavishly on service, it will take a long time (probably years) to overcome all the bad publicity it is receiving today.
And yet....things are not getting better for Dell, as another prominent blogger has written about service problems he received from Dell, and has vowed never again to buy a Dell. Tens of thousands of people read his blog on a regular basis, and each of those people now has a more negative impression of Dell than before.
In the age of the Internet, trying to save money by skimping on customer service is truly penny-wise and pound-foolish.
Posted by Peter Leppik
How much did the company save by cutting back on service? I don't know, but I'm guessing that it is less than $200 million per quarter. $200 million is the amount the company's sales fell behind forecast for its third fiscal quarter. Second quarter sales also came up short.
How much of that $200 million shortfall is due to customers staying away because of bad publicity over customer service? Again, I don't know, but I'm guessing that the company's bad press is a significant factor.
Dell used to have a reputation for stellar service. But good reputations are earned by the teaspoon and lost by the gallon. By trying to save some money on service, the company has (unfortunately) worked itself into a corner: even if it begins spending lavishly on service, it will take a long time (probably years) to overcome all the bad publicity it is receiving today.
And yet....things are not getting better for Dell, as another prominent blogger has written about service problems he received from Dell, and has vowed never again to buy a Dell. Tens of thousands of people read his blog on a regular basis, and each of those people now has a more negative impression of Dell than before.
In the age of the Internet, trying to save money by skimping on customer service is truly penny-wise and pound-foolish.
Posted by Peter Leppik
Posted at 11:46 AM by | | | |