The CLEMMER Group has been purchasing our computer equipment from Dell since we began in 1994. We like their technology, customizing equipment to our needs, value, and next day onsite service. That may change. I just got off the phone from a painful hour of experiencing Dell’s inward focused bureaucracy as Gary, our IT support guy, and I purchased a notebook computer for Heather.
After building the system we wanted through their web site, we called their business line to ask a few final questions and place the order. That’s when we were told that this model was only available through their consumer’s line. So we were transferred. For sixty frustrating minutes, we were bounced back and forth between four different agents, half of whom were very difficult to understand. We were cut off, and left on hold for extended periods of time as the different agents in sales, customer service and finance tried to reconcile our simple request with their specific department requirements. It was a lot of work to get someone to take our money.
An hour later, we finally succeeded in purchasing the computer we’d already pre-built!
Sound familiar? Everyone did his or her job. But the customer was made to dance to that old familiar tune, “The Bureaucratic Boogie.” Like so many organizations, Dell is clearly organized for its own convenience rather than for their customers’. Looking from the inside out, everyone did his or her job. Looking from the outside in, we were greeted with a confusing mish‑mash of departments and “customer service agents (an oxymoron?)” Like the proverbial elephant, each agent has his or her arms around one leg, but only the customer sees the whole animal.
A previous post, The Three Rings of Perceived Value: An Integrated Customer Focus showed our service/quality model with the Basic Product/Service (notebook computer and onsite service) as the inner ring. It was in the next two rings (Support and Enhanced Service) that we experienced the big break down. Our Dell dance was an example of how customers often experience the Three Rings exactly opposite to the way people inside an organization look at them. Customers start on the outside and move into the Basic Product from the Third Ring. If the Third Ring is large, first impressions will be very positive. That builds great momentum as customers move into the inner rings. Even the odd failure in one of the inner rings will be forgiven if everyone is delighting customers in the outer ring of Enhanced Service.
Understanding the intertwined relationship among the Three Rings is at the heart of Toyota’s remarkable sales growth in the past two decades. Back in the late eighties customer research by Toyota Motor Sales USA showed that “those customers who have a positive sales experience are more likely to also have a positive service experience.” Toyota’s research showed that when customers rated their sales experience as positive, 84% went on to rate their service experience as positive. But of those who had a negative sales experience, only 43% rated their subsequent service experience as positive.
Toyota’s customer research illustrates how product, support, and enhanced service all blur together for customers into one total experience — good, bad, or otherwise. When a Toyota customer had a good sales and service experience the intention to repurchase from that dealer was 85%. However, if those same customers have both a bad sales and a bad service experience, their likelihood of repurchasing from that dealer is just 1%!! Robert Schrandt, then Vice President Customer Relations, explained how this research proves that the outer rings profoundly influence the inner product ring; “The quality of the sales and service experience not only determines where customers will purchase their next vehicle, but whether they’ll purchase a Toyota at all. Customers having a good sales and service experience have intent to repurchase Toyotas of 83% versus only 38% if those experiences are bad.”
A critical part of the journey to higher customer perceived value — as well as cost reduction — is breaking down the “vertical chimneys” or silos between departments. This means looking at customer, production, and support processes from the inside out as they flow across functional and departmental boundaries.
As we’ve seen with cars over the past few decades, it’s getting harder for computer companies to differentiate their core products like desktop or notebook computers. An ever more crowded field of competitors is engaged in a “price and features” race in the inner ring. If Dell can refocus their sales and service from the outside in they’ll have a major growth edge. If not, customers like me will go find a company that gets it.