According to a recent article on cnet news.com, Dell's market leadership has come at a price:
Dell continues to win market share and turn out record quarterly profits, but two recent surveys show that the company has slipped, when it comes to a more subjective measurement: customer service.
According to two new reports that rate the satisfaction of PC buyers, Dell's scores have declined in recent months. While statistically, the results are not catastrophic for a company that prides itself on offering superior service, it's a potentially troubling trend Dell executives acknowledge and have taken steps to address...
While all PC companies talk about the importance of customer service, Dell has been particularly vocal for several reasons. By cutting out the middleman, Dell has a closer relationship with customers, thus taking all the praise from happy buyers--and all the blame when things go wrong. In addition, the PC business is becoming increasingly commoditized, marked by similarly equipped machines and price erosion. One way to stand out from the crowd is to pamper buyers by offering better service and support than competitors.
Isn't this the truth for any business that sells directly to customers? Too many options often lead to commoditization, especially when one competitor starts a price war. I've had several clients who discovered -- rather reluctantly -- that they were in a commodity business after we did some customer research. Customers often don't see any meaningful difference between various options, much to the dismay of execs and product managers. (For more on this topic, see my post on "Stop the Madness!")
Do you know whether your business has a meaningful point of difference that customers are willing to pay extra for? If not, you have one of three options: continue battling the price war, differentiate on service, or do something radically innovative that addresses pent-up demand. #1 really isn't an option if you want to stay in business, and #3 isn't a short-term or cheap solution. The future of business, according to The Support Economy, is providing deep support that goes beyond today's shallow definition of customer service. (I'll write up a recap when I'm finished reading it!)