The growing popularity of buying products direct has meant big
business for those companies that can get the balance right between
convenience and service. Consumers like the ease with which they can buy
direct, but many need the reassurance they get from a face-to-face
Dell Computers is tapping into this market and is successfully selling
PCs via mail order and the Internet. Its ’build your own PC’ web site is
boosting direct sales, but can it match this unique selling proposition
with solid support (see box)?
’Like everyone else, Dell’s activities on the Internet began with a
brochure site and achieved very little,’ says marketing director Dave
Moore. ’But within six months of beginning to use the Internet properly,
we were taking orders worth dollars 1m (pounds 600,000) every day, and
that doubled within the next eight weeks. Dell Computers in the US is
now taking more orders over the Net than on the phone and expects it to
grow to 50% or more of its transactional business by the year 2000.
’To use it properly it is essential to recognise that the Internet is
much more than a promotional medium. It is a two-way communication tool
which empowers its users. Visitors to the Dell Web site
(www.dell.com/uk) can configure the computer they want to purchase and
watch the price alter as they change its specification,’ he
Moore says potential buyers on the Net are more likely to complete the
purchase and have an average total purchase price 15% higher than with
other direct sales routes. What’s more, he claims, the cost of taking an
order on the Net is one-thousandth of the cost of doing it by
’A large number of people here in the UK are already using the Web as
their primary means of communications, and we would never have reached
them through conventional media. Seventy per cent of private buyers
purchasing through the Web are new customers and so are 50% of the
We are also seeing a higher proportion of private customers; they
account for 10% of our business normally but half of all our Web
The volumes of business are not insignificant. Dell is the UK’s number
two supplier of personal computers, with an 11% market share. Ten per
cent of the company’s transactional business will be via the Net by the
fourth quarter of 1997 - helping to fuel an annual growth rate of 40% -
and the share is expected to rise to 40% within three years.
’There is no magic formula for success on the Internet,’ Moore concedes,
’and even if there was, it would change by next week. But we have learnt
the importance of treating our Web activity as a separate business
rather than an add-on supplement to normal sales. Dell UK has a
dedicated Web team with six staff, which is constantly improving the
site with facilities such as troubleshooting, product upgrading, order
status checking and career opportunities.
The Internet also has the potential to address problems faced with
equipment after purchase (see box). A semi-intelligent flow chart allows
Web users to identify and resolve problems themselves at any time of the
day or night and also lets them exchange e-mail with technicians.
However, unless the equipment works in the first place, this is of
A BUYER’S VIEW
Direct-sell schemes like Dell’s depend on solid after-sales support to
build consumer confidence. Tessa Curtis was recently persuaded to buy a
Dell PC direct, but when she ran into problems, Dell’s support was
nowhere to be found.
’I chose Dell because it seemed to offer a lot for the price and
promised much the same after-sales support as everyone else. So I bit
the bullet and bought by mail order.
Thirteen days later it arrived, with a stack of booklets but only one on
how to get started. Ten days later, disaster struck. After using a
CD-ROM for the kids - that claimed to work with Windows 95 but clearly
didn’t - the system crashed.
The documents were no help, so I rang Dell’s technical support line.
I rang not once but every day for six days trying to get through. Each
time I waited in a queue for up to an hour before having to hang up.
Finally, I rang just before the line opened and pleaded with the first
real person I spoke to for emergency help.
I was told Windows 95 had crashed and would have to be reinstalled by
me. Also, I learnt one of the hard drives on the computer may have
I was advised to buy an anti-virus kit (cost pounds 29.99 upwards)
before trying to re-install Windows. For this I would need some floppy
discs Dell would send, which should arrive in a week.
I was extremely unhappy, and urgently needed a working PC. I turned to
the small print of Dell’s support services. I found details of on-site
help (costs extra) and a ’total satisfaction’ return for refund promise
lasting 30 days (US and Canada only). Even the helpline is only free for
the first month - after that you pay.
My PC was finally fixed by a friendly techie. Now I know what I missed
when I bought direct.’
Tessa Curtis is BBC business correspondent
Dell’s marketing director Dave Moore says the company accepts that in
the last two months its technical support service has had problems.
Having taken on 15 more people to man the phones, Dell now hopes to deal
with 95% of calls within five minutes. Moore agrees that mail-order
customers get the same support as those buying PCs over the Net:
’Regardless of how you buy, we aim to provide the same level of