Dell: from social media fiasco to first-class online customer collaboration

In June 2005, disgruntled customer and outspoken technology commentator Jeff Jarvis started a rant on his blog (www.buzzmachine.com) about Dell, in response to what he felt was appalling customer service. His series of posts, known as the “Dell Hell” saga, achieved wide coverage within the blogging community.  It rapidly received strong support from fellow frustrated customers, who left hundreds of agreeing comments on the blog.

However it wasn’t until Jarvis contacted directly Michael George, then Dell’s CMO and VP for US consumer business, and wrote an online open letter to founder Michael Dell, that Dell realised the extent of its customers’ discontent and the power of social media in amplifying a corporate crisis. This finally triggered a significant turnaround in Dell’s relationship with its customers.  The company decided to start embracing the blogosphere, both to secure the goodwill of online opinion leaders and to gather valuable feedback on its products.

To reach out to customers, Dell has launched over the last couple of years three online interactive tools:

- The Direct2Dell blog, where dedicated Dell bloggers respond to customers’ issues
- The IdeaStorm forum, where customers submit ideas to improve Dell’s products
- The StudioDell blog, which provides videos and podcasts to help customers improve their Dell experience.

Today Dell gives premium importance to its customers’ advice. One of Dell’s worst problems, as expressed by Jeff Jarvis, had been that customers “were having too many of the wrong conversations with too many service technicians in too many countries”. Dell decided to increase its customer service spending by 35%, and set up the RI1 mantra: problems will have to be resolved in one call. In addition, customers are now able to rate Dell products on the Dell website, make product suggestions, warn of problem and help fellow customers fix them.

By Dell’s measure, negative blog posts by customers have dropped from 49% to 22% between 2005 and 2007, and satisfaction among core customers has increased from 58% to 74% in the year to October 2007. By Jeff Jarvis’ own admission, since it started listening to its customers, Dell “has leapt from worst to first” in terms of harnessing social media.

Read Jeff Jarvis’ Business Week article about the Dell saga here.