Dell Inc.: Leveraging on Social Media Experience

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Excerpts

Dell, a multinational technology corporation based in Round Rock, Austin in the US, earned revenue of US$62 billion in year ended on February 3, 2012. The company was started as PC's Ltd. in 1984 by Michael when he was in his freshman year at the University of Texas , Austin . In the very first year of its establishment, the company achieved sales of US$6 million. This further grew to US$69 million in fiscal year 1987. In the same year (1987), the company started its international operations by setting up a subsidiary in the UK...

Around mid-June 2005, Jarvis purchased a Dell laptop with four years' in-home service. Soon after purchase, Jarvis found that the laptop was not up to the mark. It had problems such as overheating and the network did not work. When he contacted the customer care service department of Dell, he found that there was no difference between Dell's products and services. Jarvis contacted Dell's customer care repeatedly, but to no avail. Then on June 21, 2005, he posted his experience with the Dell product and customer service on his blog cum personal website (http://buzzmachine.com)...

From the beginning, Dell had been a tech-savvy company. It was the first company to achieve sales of US$1 million through the online route. However, it did not bet on the social media till the 'Dell Hell' incident. Even after the ‘Dell Hell’ episode, the company took almost a year to join the social media network. Dell started its social media journey with blogging...

After Dell started using the social media, the percentage of negative blog posts about the company went down to 22% from the earlier 49% when ‘Dell Hell’ was at its peak. In his Bloomberg Businessweek article, Jarvis wrote, "The Dell Hell posts on my blog, which used to come up high on a Google search for the company, are now relegated to second-page search-engine Siberia." In an internal measurement, the company found that customer satisfaction had also improved significantly from 58% in 2006 to 74% in 2007 among core customers of the company...

Experts stated that there was no doubt that in its over six-year-long (July 2006 - December, 2012) social media journey, the company had successfully changed to a leader from a laager. The company had also tasted a lot of intangible and tangible benefits. However, Dell had to encash its expertise and experience in the social media quickly as it was a high margin business and it was continuing to lose its PC business to the competitor. The company’s revenue had also fallen 11% from Q3FY12 to Q3FY13. Its share price had also shrunk by about 32% in the calendar year 2012...

Exhibit I: About Social Media
Exhibit II: Social Media Time Line of Dell Inc.
Exhibit III: Typical Ratings and Reviews Page At www.dell.com
Exhibit IV: Dell's Social Media Listening Command Center
Exhibit V: Selected Financial Graphs of Dell Inc.
Exhibit VI: Social Media Services by Dell

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