I have previously written about some of the problems that Dell has been having, but the problems just seem to continue to mount each week as the once number one computer manufacturer appears to be struggling more and more. So what really has happened? Does it appear that a going out of business sale could be on the horizon?

Putting aside the current problems of replacing the CEO, employee lawsuits, investor lawsuits, managers leaving, and so forth, there are some underlying problems that Dell missed completely. No matter how many advertisements you put on the television, or place in magazines and newspapers, your best form of advertising is word of mouth. And with the advent of the Internet, this becomes even more important.

In years gone by, Dell had always been noted for its customer service. Though you may have paid a few bucks more for the computer, you knew if there was a problem, Dell would be there to help. But in its quest to becoming the number one PC company, several things occurred. Prices were cut, which was good for the consumer, but profit margins were slim for Dell. I read an article where the profit margin on a new Dell PC had dropped to about $100.00 per sale. To make up for this slim pickings, two steps were taken:

1. Technical service was farmed out to non English speaking countries.
2. Dell was dumped by HP after Dell decided making its own brand of printer would help its profit margins.

People started complaining about the lack of service when they called Dell, and posted their displeasure on the Internet, as well as telling their friends and family. And when Dell started having Lexmark make the Dell printers with the Dell logo, I recalled saying to myself that it was a bad move. HP makes a fine printer and IMHO, Lexmark is just OK.

One of the problems that occurred was you had to order print cartridges directly from Dell. You just couldn’t walk into a Staples or Office Depot and get a replacement. For some, this turned into being problematic. I recall one person telling me that it took three shipments before they finally received the correct ink cartridge. Meanwhile, they were without a printer. I know, they should have had replacements on hand, but they didn’t.

I believe that Dell needs to get back to the theme that customer service should be its number one concern. All systems from the OEMs are basically the same; you need to distinguish your product from the herd. Customer loyalty cannot be bought - it must be earned.

Going out of business? I hope not. But changes must occur before the Dell customer base completely erodes.

Tags: dell, customer satisfaction, customer service, oem, dell printer