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Dell's customer satisfaction rating dips

After rebounding last year, Dell's ratings in a nationwide=20 customer-satisfaction index dropped again.

By Dan=20 Zehr
AMERICAN-STATESMAN = STAFF
Tuesday, August 14, 2007

Dell Inc.'s customer-satisfaction ranking dropped sharply in a = nationwide=20 survey due out today, losing the ground it regained in last year's poll = and=20 raising new questions about the company's efforts to improve its service = levels.=20

Once the highest-ranked computer maker on the American Customer = Satisfaction=20 Index, Dell dropped to one of the PC industry's lowest scores with a 74. = The 5=20 percent drop returned its score to 2005 levels, when the company's = service and=20 support operations were the source of scorn from many consumers. =

=20

(enlarge=20 photo)

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Dell refocused on customer service last year and said it would spend = an=20 additional $150 million on improvements. The company has beefed up its = call=20 center staffs in the U.S. and overseas, and it has developed a new = arsenal of=20 tools it can use to tap into a customer's computer and remotely fix it = or give=20 it a regular tuneup.

Judging by the widely watched ACSI survey, it appeared that those = efforts=20 started to pay off last year. The company rebounded to a score of 78. =

"We've seen it from so many companies over the years," said Claes = Fornell, a=20 business administration professor at the University of Michigan, where = he=20 oversees the ACSI surveys. "When a company gets into difficulty, there = is an=20 element of fear, and they try to show they can do better. They try = harder, and=20 customers see it."

Those improvements can be short-lived, though, unless there's a more=20 fundamental change, Fornell added.

Dell said its own customer surveys show that it has improved on = several key=20 issues, including higher tech-support scores and fewer call transfers = compared=20 with the first quarter of last year.

Though it didn't dispute the ACSI methodology and findings, the = company said=20 its internal polling provides both a wider and more current picture of = its=20 service than the Michigan study.

"We do believe we've made significant progress," Dell spokeswoman = Jodi=20 Zweifler said. "But we know we have more to do to deliver a strong = customer=20 experience."

A strong customer experience once was a calling card for Dell, which = was the=20 ACSI's highest-ranking computer company from 1999 to 2003. Since then, = Dell has=20 dipped while Apple Inc. has jumped to the top spot.

But even Apple dropped this year, falling to a score of 79 from 83 = last year.=20 It remained the best among PC makers, although computer makers never = have made a=20 strong showing on the ACSI compared with other industries.

Hewlett-Packard Co., which replaced Dell as the world's largest = computer=20 maker in the second half of 2006, saw its brand names diverge in the = ranking.=20 The company's H-P line improved to a score of 76, but its lower-end = Compaq brand=20 trailed the other major PC makers with 73 points.

Gateway Inc. also showed a slight improvement, rising to 75 from 73 = last=20 year.

The University of Michigan's National Quality Research Center has = conducted=20 customer satisfaction polls since 1994, scoring different companies and=20 industries on a scale of 100. The annual surveys canvas 80,000 to 90,000 = consumers and rate their experiences with various products.

The survey, which has tracked Dell since 1997, polls personal = computer buyers=20 in the second quarter each year.

Companies have to strike a delicate balance between spending enough = to tailor=20 the best experience for each customer while not spending so much it = becomes=20 unprofitable. Dell long accomplished that balance in spades because of = its=20 ability to build customized products at low prices, Fornell said.

In recent years, rival PC makers have closed the gap on Dell's cost=20 advantages and have gotten a better grip on direct sales. That has left = Dell=20 with a smaller profit advantage =97 and without the ability to simply = lower prices=20 to keep attracting customers.

Although Apple provides less customization, Fornell said, it's able = to charge=20 higher prices for a Macintosh computer, largely because of its cool = factor.

Most of Apple's decline in this year's survey was due to production = problems=20 that came with its rapid sales growth, he said.

Unlike Apple, Dell's problems stemmed from its service.

One longtime Dell customer, Alene Meadows from outside Richmond, Va., = had a=20 billing dispute over a notebook computer she bought for her daughter in = April.=20 On the advice of a Dell agent, Meadows said, she put a purchase on hold = and=20 ended up losing a discount initially listed with her online order.

Meadows printed out the held order and then kept a list of all the = service=20 representatives with whom she talked. The list grew to 11 agents over = the next=20 four hours.

Dell has drastically reduced the number of call transfers, down more = than 60=20 percent from last year, Zweifler said. And although the company restored = part of=20 the discount Meadows felt she was entitled to, she said, the experience = has=20 steered her away Dell.

"Before, I'd never blink an eye at buying a Dell," she said Monday. = "But it=20 was just a horrific experience. I just could not get that across to" the = company=20 representatives.

Keeping old customers and getting new ones will become only more = difficult if=20 that stain of a bad customer-service reputation sets, analysts said. =

"Dell needs to bite the bullet, spend the money and step up so the = changes in=20 customer service are notable," said tech analyst Roger Kay, president of = Endpoint Technologies Associates Inc. "People need to see that it's = better than=20 it was."

dzehr@statesman.com; 912-5932

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Dell's customer satisfaction rating dips

After rebounding last year, Dell's ratings in a nationwide=20 customer-satisfaction index dropped again.

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