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Minyan Mailbag: Dell and Customer Service

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Let's hear what you think....

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Editor's Note: The following are responses to this Buzz and Banter post from April 25, 2006 at 2:12 pm:

For whom the DELL tolls...

I just got off the phone with Professor Brian Gilmartin. Among one of the stocks that we touched upon was Dell (DELL). On one side, DELL is taking the Wal-Mart (WMT) route (more on this in later articles), trying to appeal to demographics that are looking for PCs with more bells and whistles; a recent purchase of Alienware attests to that. However, Brian noted that to cut costs, DELL closed several support centers.

Thus, when Brian tried to get phone help for his newly purchased notebook, he was stranded on the credit card-like eternal hold. I heard a similar tale from other DELL owners. DELL is great at manufacturing and selling PCs but (intentionally) lacks a good support infrastructure. Brian and I both agreed that DELL's stock is very appealing at today's valuation. However, the news cycle could still get darker as consumers' disappointment with DELL's support gets louder, which could impact DELL's financials and the stock.

DELL is the best computer manufacturer out there, period. It generates a ton of cash flow as its vendors finance its inventory - just take a look at the cash conversion cycle, it is actually negative - the rarest and the best of kind. But not everybody is looking for the lowest price. Many may be willing to pay more and go with other makers such as Hewlett Packard (HPQ) or Gateway (GTW) that possibly provide better service. I understand that I am assuming that the other computer makers have a better service than DELL, they may or may not.
I'd love to hear Minyans' comments on the issue.

After talking to some friends and reading Minyans' responses, it is apparent that DELL has intentionally fallen behind on customer service and support. It is hard to say if it will ever show up in its bottom line as American consumers represent only 9% of its operating income. However, we may get a Nokia (NOK)-like opportunity here, where absence of good phones in the US, in Nokia's case (a sub par customer service for DELL in the US), created a once in a lifetime type of buying opportunity of Nokia's stock in 2004. I start seeing a good number of value sensitive guys buying the stock or at least taking initial positions at this level.

Vitaliy,

Good piece on Dell. Worst service on the planet

- Professor Bennett


Two desktops and one notebook. I have found their support to be excellent.

-Minyan Debra

Vitaliy-

I agree 100%. Their service is sub-par. If you try the website, the run around wears you out.
I vowed never to buy another DELL product again but just bought a new desktop. My firm offered 35% discount for DELL.

Best,
-Minyan Tony

While my Dell purchases have been limited over the years (two notebooks and a desktop, and recently another monitor and printer), I have always been very impressed and pleased with Dell's service and support; it's always been very prompt and responsive. I will not go to another vendor for anything needed in the future unless Dell stops meeting my expectations.

-Minyan Pete

Vitaliy, haven't needed service for six months or so but when I did, e-machines was absolutely outstanding both for telephone support and when I had to send the machine back for a hinge repair. The fed-ex box was there the next day, I sent it off and had it back 2 days later. The wait time on the phone was less than 60 seconds. The support staff actually knew what they were talking about. I was amazed.

-Minyan Michael

V - I've purchased 2 Dell PCs in the last 4 years - had problems with both - service and support was awful - I'm determined not to buy another Dell. On the other hand, I bought an eMachine PC from Gateway - a low-price machine maybe $450 and it's terrific. I recommend them highly.

- Minyan Sean

Vitaliy:

My primary experience is with IBM (IBM)/Lenovo. Even with the sales to Lenovo, its service has been exemplary.

(I had a malfunctioning laptop three months ago. I quickly reached a technical representative who was knowledgeable and spoke excellent English with a Texas accent. Once I sent in the machine for repair (via a Lenovo-supplied shipping box), and it came back with a new motherboard in two days. I had the same experience in 2003, with another laptop.)

I know that ThinkPads are pricy, but thus far, the premium paid is well worth the money – especially compared to the horror stories I have been reading about Dells.

Minyan Kurt
Position in WMT, NOK

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