November 21st, 2006
Dell: Our customer service has improved
If you call Dell's customer service department you'll be on hold one-third as long as you would have been this time last year.
Tucked away–actually second to last paragraph–in Dell's earnings release was a tidbit on the customer service. Dell has invested $150 million into fixing its customer service operations, which have drawn the ire of customers.
Dell said it "is seeing signs of improvement in key external and internal indicators. By increasing the number of agents, average hold times for U.S. customers have been reduced from nine minutes to three minutes in the past year. In addition, the company has reduced call transfers by over 30 percent and has improved first contact resolution rates by 20 percent."
How that translates into how customers perceive Dell–the only thing that really matters–remains to be seen. Once you screw up customer service it takes a long time to woo customers again.
Meanwhile, Dell said it will stick with its customer service investment even if it dings the company's profit outlook. Dell said its customer service investment is one of the factors that may cloud its financial outlook.
Dell's best move: Invest heavily in customer service pronto. Why? For starters, Dell has no choice. But Dell's financial picture is muddy at best. Why not ramp up your investing when Wall Street is expecting absolutely nothing but bad news from you?
Among other odds and ends in its fiscal third quarter report:
–The company reported preliminary earnings per share of 30 cents on revenue of $14.4 billion. Those results were well above Thomson Financial estimates calling for earnings of 24 cents a share. But take these financials with a grain of salt. Dell is being investigated by the Securities and Exchange Commission and financial reports may be restated.
–Dell began shipping two new PowerEdge servers with AMD Opteron processors. Server revenue was $1.5 billion with 12 percent growth in units. The company got whacked on desktop revenue, which was $4.7 billion, as unit growth fell 5 percent.
–One bright spot was Dell's unit growth in China, which was up 33 percent. In India, unit growth was up 93 percent. Dell added it plans to open manufacturing plants in India next year. In the Asia-Pacific and Japan region overall revenue was $1.9 billion.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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