The Customer Service Survey
VocaLabs' weblog providing news and commentary on the challenges of providing good customer service.
Dell Pays the Price
Wednesday - August 30, 2006 10:59 AM in
As the tech downturn ended around 2003, Dell continued cutting costs and focused on being efficient. Around that time, Dell executives decided to hire temporary workers to man their five U.S. call centers, rather than recruit more-expensive full-time staff. By 2005, 75% of Dell's call-center staff -- those who take calls from customers wanting to buy a PC -- were temporary workers. Three years earlier, the majority of those staffers were full-time employees.
The move backfired. By late 2005, Dell noticed its U.S. consumer sales were flattening. Ro Parra, a Dell senior vice president who was asked to look into the problem, pinpointed call-center problems as one cause. He discovered that the temporary call-center workers who wanted full-time jobs weren't being promoted. Turnover in the centers had soared to 300% a year from 30% in 2002.
"We were very efficient, and we made those decisions that work with the short term, but they were really damaging to us over the long term," says Mr. Parra.
Of course, it is no surprise that Dell's service levels the past few years have plummetted--I've written about it several times on this blog. Still, every time I hear something like this, I have to shake my head. So many companies and people claimto understand that customer service is critical to building and maintaining customer relationships, yet often they fail to act on it.
Here is a company which spends millions on advertising, yet when a customer calls to buy something, odds are the call is answered by a demoralized part-time employee with only a few months experience in a dead-end job who can't get promoted because the company's policy is to not promote call center employees to full-time status.
What, exactly, did Dell expect would happen?
Posted by Peter Leppik
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