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Lesson #2: Develop a Customer-Focused Philosophy

Article Overview: “Let’s say you decide to buy a car – red, two-door,” says Dell. “All sold out – four months to get one – but a really convincing salesperson talks you into the blue, four-door and probably the rust-proofing too. The salesperson gets a nice commission, when she actually sold you a car you didn’t want. Then, the dealer sends a signal back to the factory that blue four-doors are selling really well – build some more!” Contrary to this, Dell’s philosophy is that, “We’ll listen, and we’ll respond…It’s about the customer. It’s that simple.”

Lesson #2: Develop a Customer-Focused Philosophy

“Let’s say you decide to buy a car – red, two-door,” says Dell. “All sold out – four months to get one – but a really convincing salesperson talks you into the blue, four-door and probably the rust-proofing too. The salesperson gets a nice commission, when she actually sold you a car you didn’t want. Then, the dealer sends a signal back to the factory that blue four-doors are selling really well – build some more!” Contrary to this, Dell’s philosophy is that, “We’ll listen, and we’ll respond…It’s about the customer. It’s that simple.”

From day one, Dell has built his company up on the premise that what the customer says, goes. When he first started Dell Computer at the age of 19 in his University of Texas dorm room, Dell says his concept was simple: buy parts, assemble them, and sell the finished products directly to customers. He effectively eliminated big distributors and was able to reduce the end price he could charge.

“You tell us what you want – how fast you want the programs to operate, how much memory, how expandable – and we will build it for you and ship it out, usually within three days,” he says. “And if ever you have a question or a problem about your system, you call us direct. We take direct responsibility for the complete satisfaction of each and every customer.”

After his company had been in business for three years, Dell created the industry’s first on-site-service program. If there was a problem with your computer, you didn’t have to return to the store to have it looked at. You simply called Dell and a serviceman would come to your house and fix it. “That was a pretty important plus because we didn’t have any stores,” Dell jokingly recalls.

Dell claims that his company operates on a relatively simple concept: “The most important thing is to satisfy our customers,” he says. “The second most important is to be profitable. If we don't do the first one well, the second one won't happen.” Thus, the focus of his company remains on concrete issues, such as improving delivery time, cutting operating costs and maintaining customer service. Dell believes in the importance of adding value “beyond the box”, looking at the customer’s total experience. To this end, he often aligns his company with complementary partners for increased efficiency.

Today, Dell builds computers only in response to orders that the company has actually received from users, either by phone or the Internet. Users are able to dictate the company’s supply, relieving Dell of the risk that comes along with trying to predict market demand in the extremely unpredictable computer industry. Because Dell customizes its products, the company is also able to provide unmatched levels of customer service.

For instance, on October 27, 1997, after the Asian economic crisis overwhelmed Nasdaq’s online trading site, Nasdaq called Dell, which proceeded to build eight custom-made PowerEdge servers in just 36 hours. Three days later, they were up and running for Nasdaq.

By prioritizing his customers, Dell was rewarded with their business and loyalty.

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Article Tags: dell computer, doors, dorm room, finished products, four months, memory, philosophy, premise, rust, salesperson, satisfaction, serviceman, university of texas



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