Dell Attempts to Placate Disgruntled Laptop Buyers in China

Dell is facing a wave of fraud lawsuits in China after shipping laptop computers to customers that contained CPUs other than those advertised in the company’s marketing literature.

The company first apologized for what it described as a marketing omission, and now it has offered full refunds to disgruntled buyers. That isn’t enough for some customers, however, who will take the company to court in pursuit of punitive and compensatory reparations.

Dell, yet again, has nobody to blame but itself. The company should know that a technology company — any company, for that matter — must ensure that what’s on the product manifest is what the customer receives when he or she opens the box. In this instance, Dell failed that test, and the resulting backlash is predictable and warranted.

What’s the crux of the current controversy?

Well, according to lawsuits filed on behalf of aggrieved customers, Dell’s Inspiron 640M laptops were marketed and sold as featuring Intel Corp.’s Core Duo T2300 microprocessors, but the computers actually were powered by Intel’s Core Duo T2300E chips. Dell says it switched microprocessors because the latter CPU, which is $32 less expensive than the former, provides better value to customers.

Customers, though, don’t see it that way. They feel they were deceived by Dell, sold computers with less-capable processing functionality than they believed they were getting. Dell counters that there isn’t much difference between the two microprocessors, that the one chosen is more suitable for laptop models, and that the additional features of the Core Duo T2300 are irrelevant to the vast majority of laptop customers.

That might be correct, but Dell is missing the point — and not for the first time.

In business, believe it or not, integrity and trust matter. If your marketing literature indicates that your company’s laptop PC is powered by a Core Duo T2300 microprocessor, that had better be the case. If it isn’t, customers will rightly wonder about other inaccuracies and deceptions that might be embedded in your marketing propaganda.

It’s quite irrelevant as to whether you, as a vendor, believe customers really need the virtualization features the T2300 offers and the T2300E doesn’t. That’s for customers to decide; and they should be able to make that decision based on accurate product information contained in data sheets for your products and those of your competitors.

Dell seems to think an apology, and now a refund, makes everything right, but I’m not sure it does.

I think this issue is a microcosm of the problems at Dell. The company has become complacent, myopic, arrogant, and focused overwhelmingly on its own internal imperatives for operational efficiency and cost savings rather than on making and selling products that satisfy customers.

The company seems to have forgotten that its direct-sales model and build-to-order supply chain were means to an end: customer satisfaction. Now, it seems, the model and the operational methodology have become ends in themselves. Dell doesn’t seem to care what products fall out of the process, or whether customers enjoy using them.

It’s what happens when a company maniacally puts operational process ahead of everything else.

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