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Survey: Dell customer satisfaction unsatisfactory

The PC maker relinquishes its first-place spot in services for business customers--a rare slip.

PC maker Dell continued to have difficulty meeting all of its business customers' expectations for service during the first quarter, according to a survey.

The Round Rock, Texas, PC maker's overall customer service and support satisfaction rating, as measured by Technology Business Research's Corporate IT Service and Support Customer Satisfaction Study, fell slightly from the fourth quarter of 2003 to the first quarter of 2004.

The slip helped Dell rival Hewlett-Packard take the satisfaction lead among the three major PC makers for the first time since TBR began the quarterly study in 2000. Dell, which had led or been tied for the lead in satisfaction among the PC makers since the study's inception, fell back to a tie for second place.

While HP moved into the top position among the PC makers, with a score of 81.85 out of a possible 100 points, Dell garnered an 80.32, and IBM scored an 80.94. Dell and IBM were considered to be in a statistical tie for second place, according to the survey, as TBR requires a distance of at least 1 percent between vendors in order to rank them separately.

Even though PC makers' scores tend to fluctuate from quarter to quarter and Dell's first quarter score was only slightly lower than its performance in the fourth quarter of 2003, the change in rank is significant in that Dell had either led or been tied for the lead in satisfaction during 14 of the previous 15 quarters.

Thus the latest survey shows Dell, which TBR analyst Julie Perron says practically wrote the book on customer service in the PC industry, exhibiting a continued downward trend in customer satisfaction ratings. The decline comes despite efforts such as beefing up its telephone support staff and training and re-routing business tech support calls away from its call center in India.

TBR's study surveys, on a quarterly basis, hundreds of corporate IT buyers on eight aspects of service support. TBR takes into account factors such as phone support, replacement parts availability, warranty upgrade price and overall satisfaction, and assigns each one a weighted score for a total of 100 possible points. The survey, which does not include consumers or professional services organizations such as IBM Global Services, basically measures the current opinions of people who are paid to buy and administer to computers from companies like Dell, HP and IBM.

Along with tracking the top three PC makers, TBR's survey also measures satisfaction with companies' in-house tech support operations. In-house support, which is considered to be the closest to an ideal situation for many companies, typically ranks the highest in the TBR survey (though at times, Dell has come close to the scores of in-house support organizations). In-house operations received a score of 85.40 out of 100 during the first quarter.

On a sequential basis, Dell's first-quarter 80.32 score is only somewhat lower than its fourth-quarter 2003 performance of 81.33. But it represents a relatively large decrease when compared to its first quarter 2003 score of 84.08. HP and IBM also saw their scores fall during the fourth quarter, hitting 81.5 and 80.72 respectively, but they bounced back in the first quarter to hit the 81.85 and 80.94 marks.

Some of Dell's slide is reflective of factors it cannot control, such as more competitive pricing by its rivals and also changing attitudes among those surveyed about the value of service and support, the TBR report says. Other factors, including how phone support is delivered, are more easily controlled by Dell.

To its credit, and its downfall in this case, people seem to expect more from Dell. At the same time, the company has acquired many new customers and its support organization has had to keep up with its huge growth over the last few years while continuing to operate in a low-cost manner.

"Dell set a precedent quite some time ago--and not just for customers that have been with it--it's also well-publicized so that any new customer would have high expectations (for service) just because of its reputation," Perron said. But, "If you're not satisfied with some aspect of support, then you're not going to be as satisfied overall."

Dell says it is working hard to address customers' concerns, with multiple programs designed to improve service, including collecting more customer feedback and beefing up phone support.

"We're totally committed to producing a world-class customer experience, from sales to technical support," said Dell spokesman Bob Kaufman. "This is an issue that's being focused on at all levels of the company. We are planning on and are making the investments and improvements necessary to continue to provide the best service in the industry."

Dell's efforts may be beginning to work: TBR has seen some improvement in customers' perception of Dell in second-quarter surveys, Perron said.

Based on that information, "I think (Dell) may have hit bottom in the first quarter," Perron said.

TBR's second-quarter customer satisfaction report is due in August.

The company compiled its report from surveys of 688 IT, technical support, purchasing and infrastructure managers from 688 companies in North America between Oct. 1, 2003 and March 31, 2004.