Nick Carr writes that while Dell was able to innovate with its made-when-you-order supply chain and direct sales to cut costs, they also need to have a direct support channel, since they have no dealers. And the money would have earned with this innovation now needs to be spent on customer support. They did put up a blog this month.
But there’s another side to the PC business: the support side. And here, the direct model looks less attractive. If, after all, you’re selling directly to customers, you have to shoulder all the related support costs, from handling information requests before the sale to taking and tracking orders to handling service inquiries after the sale. You can’t offload any of those costs onto resellers or retailers or other distribution partners – because you don’t have any distribution partners.
Off-shoring the call center to India is not as innovative at their just-in-time supply chain, and now they are paying the price since this was not factored in. I think the lesson is to innovate in as many areas as they can. One commenter writes that if they let users support each other through message boards and wikis, they might not have this innovation imblanace. It appears Dell does have a community forum. Could a wiki really be the tipping point? Is Dell doing all it can to recommend the support forum to its customers, or is this just an afterthought? Could Dell create a support strategy around using a wiki and looking at customer support as a strategy to cut costs instead of incur costs? Motorola has put up a wiki for its new Q phone. I am eagerly awaiting a report from Motorola on the number of calls and e-mails they receive on this model in comparison to others.
Again, (I seem to do this with a lot of posts) we look at Apple’s strategy. Non-commodity parts may cost more, but it means there are less variables (fewer models) for the support channels to deal with (keep it simple). Apple Stores provide the Genius Bar, a way to talk to a support rep in person. The Apple forums are used by many dedicated users. User experience is baked into every aspect of the business.
Good user experience is not only good for the customer and the brand, but it keeps revenue in the company. As you can see, market share is not everything. I would go as far to say that market share is not sustainable over the long term if your user experience is bad. Who’s the real rock star here, Michale Dell or Steve Jobs? Sure, Michael Dell is the rock star in the supply chain management world, but most end users do not see Dell as the rock star, they see Jobs as the rock star. Jobs’ strategy continues to touch the customer well after the purchase. Dell’s just does it by delivering it to you when you want it, a one time thing.
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