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12/18/2007
03:08 PM
Alexander Wolfe
Alexander Wolfe
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How Dell Is (Far Too Much) Like Starbucks

What can a powerhouse PC vendor and a high-priced coffee destination possibly have in common? Both have capitalized on promising beginnings and pushed them to the limit. Then each continued onward into uncharted territory, where additional growth came at the expensive of some of the stuff that made them great in the first place.

What can a powerhouse PC vendor and a high-priced coffee destination possibly have in common? Both have capitalized on promising beginnings and pushed them to the limit. Then each continued onward into uncharted territory, where additional growth came at the expensive of some of the stuff that made them great in the first place.Which leaves Dell and Starbucks where they are today: In each case, the basic product is still good; the reputation for a stellar customer experience, not so much. Now, pay attention to precisely what I'm saying here. I did not state that the customer experience isn't good anymore. I said that both Dell's and Starbuck's reputations for providing an unparalleled environment in which to purchase computers or to sip lattes has declined. And that's undeniably true.

Take Dell. It has taken major hits in public, beginning most prominently with blogger Jeff Jarvis' infamous "Dell Hell" posts of 2005. Since you rarely get a second chance to correct a really bad impression, that meme has been replicated in the blogosphere right down to the present day. (See Ed Burnette's ZDNet post, "How Dell screwed up my order," from last week.)

Is this kind of stuff fair? On a macro basis, of course not. There will always be some customers who have problems, notwithstanding that the majority of buyers are happy. Hey, if that wasn't the case, then Dell would go out of business.

Me, I was a Dell fan early on, buying a machine from it in 1994. Back then, Gateway was the PC vendor of choice for the less-knowledgeable masses, and Dell was the geekier option. Ultimately, Dell evolved into a reliable, mainstream vendor for PC buyers of all stripes.

Today, unfortunately, I'm not sure exactly what Dell's market positioning is supposed to be. Dell certainly isn't the cheapest. It's not the coolest, either. Which is why the perception that it no longer has super customer service may be so damaging. That alone would be reason enough to get me to give Dell another try, but quite frankly I'm hesitant, even if that's unfair.

Then there's Starbucks, and I have to say the similarities to Dell are striking. Howard Schultz and company took a great coffee-drinking experience, and, through overexpansion, morphed it into the mediocrity it is today. Indifferent service, long lines, messy cream-and-sugar stations, loud talkers, and faux writers with laptop hogging up the (too few) tables all day. (Interestingly, Starbucks' shares have taken a beating recently, though more for overexpansion than for my specific gripes.)

Me, I still go there for the coffee, but what seems like a case of piling on after the tackle, some folks are beginning to bash the coffee, too. Consumer Reports last February rated McDonald's coffee higher than Starbucks, characterizing the latter as "burnt and bitter." (This kind of stuff has inspired the urban legend that Starbucks deliberately "burns" its beans, the better to get you to buy sugary drinks.)

So what's a Dell (and a Starbucks) to do? Who knows? The law of large, entropic systems says that there's no easy way to right a large corporation barreling down a bad track. However, in each case, both Michael Dell and Howard Schultz hold enough power that, if they wanted to focus on improving the customer-service component of their respective corporate cultures, they could.

Here's a final thought; try this thought experiment: If you flipped them -- if Dell sold coffee and Starbucks computers -- would the respective customer experiences be any different? Probably not, huh?

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