How Dell Changed A Brand Loyalist's Mind...

Customer loyalty boils down to personal experience. No matter what a business’s size, who is on its executive team, its market cap, etc., etc., consumers become loyal to a brand and company based on their own personal experience.

I recently read an article about Michael Dell that starts off with his story. Dell founded his computer upgrade firm in his dorm at U of Texas when he was 19. At 27, in 1992, he became the youngest CEO ever on the Fortune 500. The company started with personal computer upgrades, moved to selling personal systems, moved to customizing those systems, then into selling personal systems over the net at the same time as expanding into servers. Now, in 2011 with $26.6 billion in market cap, Dell Computer is getting ready to expand into the Cloud and software markets.

That’s a great story, and I’m not knocking Michael Dell for his success, but the fact remains that before I could even finish reading the article on Michael Dell, I found myself typing my own article on an HP Compaq laptop that I had to buy when my fifth and final Dell laptop took a crap on me during its manufacturer warranty period.

So, regardless of Dell’s success, and regardless of Michael Dell’s fantastic, successful story, I am a customer who purchased five Dell laptops from 2001 to 2011, yet I am also a customer who went out in 2011 and bought an HP Compaq instead. Why?

Well, because I finally had it, that’s why. I truly believe that my Dell Inspiron 8200 that I bought in 2001 would still be going today had I not spilled a bottle of water in it. I only wish I could say the same about the subsequent four Dells I purchased.

Each time, the screen failed on me, once at three years, once at two years, once at a year and a half, and now, this last time, after nine months. So, in a decade, a decade that saw immense growth and expansion for Dell, my personal experience has been the opposite – the other direction – my laptops have been lasting a shorter and shorter period of time – a reduction, not an expansion, in my own personal experience with Dell.

Top that off with two other things I have a problem with, and I have made my case for why, while being one of the strongest brand loyalists I know, I have changed my laptop brand after 10 years.

Thing #1 – Customer Service. When I first started calling Dell customer service back in 2001, it was a pleasant, easy experience. “Yes, sir, no problem, sir, right away, sir, we’ll get that fixed for you immediately, sir. That power cord failed under warranty, we’ll send you one out at no cost immediately and I apologize for the inconvenience, sir.”

Ten years later, while the customer service people did their best, I could also tell their hands were tied by new policies that probably didn’t exist ten years ago. “Well, while your laptop is in warranty and covered, I can only send someone out to look at it if you pay for an additional year’s warranty, or pay for the service call. Other than that, you are going to have to send it in to us, but the good news is that it will only take 10 days!” Ten days? In today’s business world, I am without a laptop for 10 days? Thanks, Dell.

Thing #2 – Dell’s Philosophy. This philosophy changed, and I think that is the reason for the dip in quality and Thing #1 above. Every Dell laptop has the Dell logo on the lid. My first and second Dell both had the logo positioned in a manner that when the laptop was closed and in my lap, the logo was right-side up for me, but was upside down to the person walking by or standing in front of me (the person who had not purchased a Dell laptop yet). My third, fourth and fifth Dell laptops were the opposite – the logo was right-side up when opened and being seen by the non-Dell-owner-passer-by and upside down to me, the idiot who had purchased the laptop when it was sitting closed in my lap. What does that tell me? Somewhere along the way, Dell became much less interested in servicing the customer who had already purchased their product and much more interested in selling the next laptop to the person who had not purchased one yet.

As I said…Personal experience. Ten years ago, I was so excited to buy that first big $2000 laptop from Dell that was just as fast and robust as a desktop. The day before I spilled water in it, I would have told you to buy nothing but Dells. Yet, two years later, after Dell #2 crapped out on me, I was a little bit less vocal with my praise for Dell. By Dell #3 and #4, I had stopped talking about the brand. And now, as Dell #5, freshly back from the repair shop and its 10 day vacation sits collecting dust as my back-up machine, and I sit typing on this HP Compaq, I am singing a very different tune. Guess what I am going to say now if someone asks me if they should buy a Dell?

They Don't Make Dells Like They Used To

I'm back to blogging after a brief heitus. I won't get too deep into the details that led to a week-long break, but let me just say that they don't make Dells like they used to.

I bought an Inspiron 8200 way back in 2001 and know that it would still be going strong today had I not spilled a bottle of water on the keyboard in September of 2006.

On the other hand, the newer work-horse Inspiron 1300 that I bought in September 2006 to replace my 8200 is already on its way to the green recycling center.

I've converted my everyday "computering" over to the Inspiron 9400 that I bought some three years ago as our home computer, but have used very seldom.

It has a large and beautiful screen, but also has a huge case, and weighs about twice as much as my 1300 did, but I'll make do. We'll see how long the 9400 goes, but we might be switching brands once the 9400 has run its course.

Switching brands is not something I normally do, but like I said, they just don't make Dells like they used to.

Non-U.S. Revenue Percentages...

One of the most important aspects of investing your hard-earned dollars is to ensure that you are diversified to guard against fluctuations in sectors of your portfolio that may be overweighted, such as what happened to a lot of people in 1999 when they were overweighted in tech and what happened to people at Enron who were way overweighted in their own company stock.

It pays to do a little digging because things may not always be as they seem.

For instance, you may be invested in a U.S.-based company thinking that you have covered the U.S. portion of your portfolio, when in fact, most of that company’s revenue is coming from more unstable foreign sources.

Below, find the 15 largest U.S. firms and the percentage of their non-U.S. revenue...

Intel - 80%
ExxonMobil - 75%
Coca-Cola - 70%
Chevron - 63%
IBM - 63%
Altria Group - 62%
Proctor & Gamble - 53%
Cisco Systems - 50%
AIG - 44%
Pfizer - 43%
General Electric - 41%
Johnson & Johnson - 41%
PepsiCo - 36%
Dell - 33%
Microsoft - 32%