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Talking Back:
Dell Discusses its Growing Pains

By Anne Zieger
ConsumerAffairs.com

August 30, 2004
Sure, they made more than $45 billion over the last year -- but still, sometimes it's not easy being Dell. Rapid sales growth can be very challenging to handle, and management knows that this has had some impact on the service customers get, according to Dell spokesperson Jennifer Davis.

Dell Computers • Advertising • Credit Card Fraud • Dell Finance • "No-Interest" Offers • Rebates • Restocking Fee • Sales Practices • "Surprise" Loans Service • Customer Service • Tech Support • 30-Day Return Policy • Warranty • Extended Warranty Products • Laptops • Printers • Plasma TV Customers • Deployed Military • Small Business Customers • Dell Defenders --- News • Dell To Pay New York $4 Million In Fraud Charges Settlement • Dell Flubs Online Prices • Dell to Pay $3.3 Million to Resolve Deceptive Practice Claims • Judge Rules Dell Deceived Consumers • Dell Closes Sales Kiosks • Wal-Mart To Sell Dell Computers • New York Sues Dell on Consumer Fraud Charges • Dell Breaks Microsoft Stranglehold • Dell Settles Class Action Over Financing Practices • Dell Recalls Notebook Computer Batteries • Chinese Consumers Sue Dell • "Exploding" Dell Laptop Destroys Truck, Imperils Outsdoorsmen • Dell Denies It Knew of Overheating Battery Problem for Years • Dell Cuts Rebate Program Amid Complaints • Seeking Sizzle, Dell Goes Alien • Dell Sales & Earnings Down, Complaints Up • Computer Vendors Charge More For Less Service • Class Action Accuses Dell of Defrauding Customers --- Recalls • Dell Recalls Notebook Computer Batteries • Dell Recalls More Notebook AC Adapters • Dell Recalls Notebook Power Adapters Analysis • Dell Wins Complaint Derby • To Dell & Back • Dell Talks Back

True, Dell is far from alone in its customer service struggles. After years of price wars, all of the PC manufacturers are struggling to provide adequate service, says Rob Enderle, principal analyst with San Jose, CA research firm The Enderle Group. While the PC makers once made hundreds of dollars on each machine, generating enough profit to pay for routine customer service, these days, PC makers may see as little as $50 in profit on low-end machines. Meanwhile, with spam, spyware and viruses playing havoc with machines, the PC companies actually have to handle more calls than they did in the past. Something, it seems, has to give.

Dell leads every other computer company in complaints filed with ConsumerAffairs.com, complaints ranging from misplaced finance charges to disppearing rebates and, most particularly, to abysmal tech support and customer service for defective machines. But Dell is working hard to get all of these things right, Davis told us.

Rebate runaround

For one thing, Dell has made the rebate process much simpler. These days, customers fill out only one brief form to submit a rebate claim, even if they're applying for multiple rebates at the same time.

Also, Dell has changed the way it handles the information on the rebate form. For example, customer reps at the rebate fulfillment house must enter the data twice, to make sure they're getting the details right. "This has increased the accuracy on processing rebate claims," Davis said.

These days, in fact, Dell is hoping to get rebates into customers' hands within 30 days of the postmarked date on the application, rather than the eight to 10 week payment cycle typical of most retailers.

So what's up, then, with the missing rebates -- and repeated requests for rebate information from buyers -- reported by scores of ConsumerAffairs.com readers? The truth is, the answers don't lie directly within Dell.

Like virtually all other retailers, Dell doesn't process the rebate claims itself. Instead, it farms out the claim validation and rebate check cutting process to Scottsdale, Arizona-based Continental Promotions Group, a $1.3 billion "promotion management" company. (Dell customers, if you're visiting www.rebatestatus.com to find out when you'll get paid, you're actually talking to CPG.)

While ConsumerAffairs.com couldn't confirm this independently, other news organizations have reported that CPG uses loosely supervised home workers to verify rebates, paying them only 8.5 cents per rebate form. Such low rates would appear to encourage the contractors to hurry through rebate applications, and possibly introduce errors.

When we called CPG to ask questions about the rebate process, and how it's possible customers may have been asked for rebate documentation four times or more, we were referred to the company's lawyer. And as of this writing, no one from CPG had called back. However, Phoenix' KPHO-TV recently provided a telling look behind the rebate screen.

Collapsed support?

Another sore spot for many Dell customers is what they see as extremely inefficient, careless or downright insulting experiences with the company's tech support and customer service reps.

There's no doubt Dell faces a major challenge in managing customer support, with 20 support centers spread across the globe. (About 25 percent of those centers are in the U.S.) With reps scattered around the planet,"at the end of the day, it provides a very uneven customer experience," Enderle says. "When customers call in, it may be that they're talking to someone for whom English isn't their first language."

And the growth in PC-related gadgets isn't helping things. As customers struggle to mix and match photo quality printers, MP3 players, laptops, PCs, handhelds and other digital marvels, they're running into lots of new problems, which continue to pump up customer support call volume. There's been a 40 percent growth in the number of "digital home" questions posed to Dell reps over the past year alone, Davis says.

So as it deals with broader tech industry issues, what is Dell doing to cope with some of the more urgent problems consumers say they are having -- such as being stonewalled when they need on-site, under-warranty repairs or struggling to get back a working machine when they send defective hardware into Dell?

Davis didn't have any specific information on how Dell is addressing repair and warranty issues. However, she noted that the company is, at least, working to de-clutter the customer support process, with an effort to cut down on the number of reps a customer must speak to when they call in.

Under this "handle in place" initiative, Dell reps are being told that rather than bounce the call from person to person, they are to pull a "virtual partner" if they don't know how to handle a customer complaint. The virtual team is supposed to schedule a callback appointment with the customer, then get back in touch together. (In several complaints, our readers have said that the callback didn't happen.)

Dell insists it is focused on hiring reps with stronger people skills. "We are focused on communication issues," she says. "We really want them to know how to work with a customer...We figure we can teach them about the products," Davis said.

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