'Damn it where is my computer"-London Financial Times INTERVIEW: Michael Dell
(source:Financial Times,London Nov.5th,98)
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Actually this is not for you but for those who don't get it.<vbg>
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"The entrepreneur who pioneered the sale of PCs on the internet tells Tony Jackson how it is possible to get the customer to do much of the work.
There are two good reasons for listening to Michael Dell on the topic of customers in the digital age. The first is that his company pioneered the selling of computers over the internet. The second is that Mr Dell is the fourth-richest man in America at 33, which makes him worth listening to on most things.
The speciality of Dell Computer Corporation is direct selling of its personal computers. In the beginning, this was done exclusively over the phone. But internet sales are rising steeply, and by the company's own reckoning will account for half its sales by 2000.
Its customer web site, www.dell.com, repays study. It allows you to pick the performance details of your computer, plus peripherals and software, and tots up the cost as you go along. Once you have entered your address and credit card number, an e-mail comes back confirming your order and the machine arrives, with luck, in two or three days.
If this is a good deal for the customer, it is an excellent one for the company. In the old days, as Mr Dell puts it, "if we in the computer industry didn't know what people were going to buy, we'd take a guess - often wrong - build these machines, send them out to stores all over the countryside, and hope that people would actually come and buy them."
Direct selling, by contrast, means that "we've been able to extract a lot of capital that used to be tied up in retail stores, inventory and things which were a substitute for having good information".
This was mainly true, of course, when Dell was still selling exclusively by phone. Mr Dell does not dispute this. What the internet does, he says, is broaden the company's reach and allow a further level of efficiency.
"People try to draw a line," he says, "and compare selling this way rather than that. We look at it more broadly. We work with customers face to face, on the telephone or over the internet. Depending on the customer, some or all of those techniques will be used. They're all intertwined."
For big customers, Dell operates "premier pages" - dedicated sites with details of orders, pricing and deliveries. "If I'm the account manager on the Shell Oil account," Mr Dell says, "instead of transacting all the bits of information I used to, I've got the web page to do that. Now I can find new opportunities in other divisions of Shell, and convince them to buy things. So our entire organisation becomes more productive."
So, he argues, does the customer. "If you're responsible for rolling out a common desktop platform in a company, this is a big project management exercise. You've got software, hardware, logistics and delivery, and everything has to be in a certain place at a certain time.
"On our premier page, we empower the customer to get on line and say 'I want 50 of these going to this location on this date'. Click, here goes the order, and the customer is in the central position."
The clever bit is that the customer does the work. Mr Dell does not deny this. "There is an element of self-serve versus full-serve, to use a gas station analogy," he says.
"But that doesn't tell the full story. It forces us to add more value, not less. Take the simplest example. A customer calls us on the phone and says 'damn it, where's my computer?' A human picks up the phone; the information goes through that human's ear, gets processed in the brain, and the human types it into our computer system. The answer comes out on the screen, goes back into the brain and out the mouth to the customer. How much added value is that? Not a whole lot.
"If we can give that customer the very same information on the screen, will the customer be happier? Absolutely. But we're not forcing the customer to do that. If you still want to call us on the phone, and hear a voice telling you what's on the screen, we're happy to do that."
So what comes next? The big thing, he says, is e-service.
"Suppose you've got some problem with your machine. You click on support, and the state of your machine is captured and sent to a server which analyses it, tells you what's wrong and helps you fix it.
"We have rudimentary forms of this today, but it can get a whole lot better. If you're a support person in Dell, you've got a tremendous set of tools right there in front of you when somebody calls you on the phone. The basic concept is we want to take all those tools and put them on the internet."
Again, he claims, this helps his corporate customers. "They may have first-line support themselves, but there's no way they could develop these kind of tools internally.
"We're shipping 7m* machines this year. When there's a problem with an XYZ printer or a special kind of card, that shows up all over the world. All our technicians contribute to a knowledge base on how to solve those problems, and everyone has access to it.""
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PS:Change 7m to 10m please in the last paragraph-Cap'n we got warp 9.
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