Dell Case Study: Missing the Mark on Customer-Centricity

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Posted on May 23, 2012 by Chris Lau Posted as Blogosphere Discussion Customer-centricity

Many companies that face business challenges will review their strategy and corporate vision to ensure that they deliver a solid product or service in the marketplace. Failure to do so is catastrophic: competitors evolve, get better, and weaken companies that do not adapt to their changing markets.

Companies that think they are customer-centric but really are not will face problems. Who offers a good example of a company that is not customer-centric? Dell.

Dell reported earnings last night that saw profits drop by 33% in the first quarter. Its customer group dropped 12%. The company pointed to its transition strategy in being an “end-to-end IT provider” as a reason for weakness. Anyone with a mild dose of skepticism would know that Dell’s problem grew because its strategy away from customer-centricity bloomed to the problems it has today.

Dell violated customer-centricity in 3 ways. By:

  1. Choosing the cheapest components in their line for notebooks and desktops
  2. Designing notebooks that were visually unappealing (excluding the Alienware and Precision line-up)
  3. Ignoring its fan sites in a way that would have cultivated better a communications strategy between its product and its customer

Dell weakened the link between customer-centricity and IT’s role in customer-focus in one major way. Dell outsourced its customer care to India. Ask any consumer how long it takes and how many call transfers it takes to resolve a problem when calling Dell for support. How long did it take you to resolve a problem you had with your Dell system?

No one should be surprised if it took at least an hour and several call-transfers to different service reps before getting the answer. No one should be surprised that Dell’s business is on the decline in 2012 as a result of insufficient focus on its customer.

Further debates on customer-centricity here.

Chris Lau Chris Lau (80 Posts)


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  • DonSheppard

    Good points…….kind of shows that customer-centricity is at least business-critical or in some cases even mission-critical.

    It also shows that some things that seem highly logical may not stand the test of being customer-centric.

    And it also shows how a focus o reducing costs can backfire.

    As an aside, was the Facebook IPO customer-centric (as evidenced by the law suits now happening)?  

    • http://twitter.com/chrispycrunch Chris Lau

      The IPO was definitely independent from customer-centricity. All players handled the bugs, and overload in the matching demand/supply poorly. Ironically, the botched launch benefited Facebook the company, as the company gets more cash to fund operations. The underwriters, and the IPO customers (stock buyers) ended up benefiting the least. This comes as a result of the company being priced at the maximum allowed by the markets. Any predictions as to how facebook will deliver ads on mobile or on the website, now that it has to prove its worth in growth?

  • Bruce Stewart

    Remember the old models for competition — operating efficiency (compete on cost), customer-centric (compete on service), product innovator (compete on anticipating unmet needs)? Seems to apply here, too.

  • Aviva Burstein

    Thanks for sharing!

  • http://twitter.com/joncmu Jon

    Good article.

  • Jimwirshing

    Although it is xenophobic to say so, I believe that most Americans develop negative perceptions when they hear “foreign” accents. Outsourcing your customer service is one giant spike in your coffin, if you do it.