Please answer these two questions, based on the case study: Dell Gets Closer Through Social Media

Q1: What is Dell's value proposition to consumer and business markets?

Q2: What is Dell's growth strategy?

Case Study 6 Dell gets closer to its customers through its social media strategy Dell is well known as a technology company, offering . We are committed to being environmentally respon- a broad range of product categories, including desktop sible in all areas of our business. We have built envi- computer systems, storage, servers and networking ronmental consideration into every stage of the Dell products, mobility products, software and peripher- product lifecycle - from developing and designing als, and services to manage IT infrastructure for large energy-efficient products, to reducing the footprint of organisations. our manufacturing and operations, to customer use and product recovery. Dell business strategy Dell's vision is to 'strive to provide the best possible Dell's sales and marketing customer experience by offering: superior value; high- Dell sells products and services directly to customers quality, relevant technology; customised systems; through dedicated sales representatives, telephone- superior service and support; and differentiated prod- based sales and online at www.dell.com. Customer ucts and services that are easy to buy and use'. segments include large corporate, government, health- The core elements of the strategy which are evident care and education accounts, as well as small-to- in Dell's marketing communications are: medium businesses and individual consumers. We simplify information technology for customers. Dell stresses the importance of its direct business Making quality personal computers, servers, storage model in providing direct and continuous feedback from and services affordable is Dell's legacy. We are fo- customers, thereby allowing products and marketing cussed on making information technology affordable programmes to be developed and refined for specific for millions of customers around the world. As a re- customer groups. sult of our direct relationships with customers, or 'cus- In its SEC filing, Dell emphasises how it listens to tomer intimacy, we are best positioned to simplify how customers to develop relevant innovative technology customers implement and maintain information tech- and services they trust and value. Evidence for using nology and deliver hardware, services and software the participative nature of Web 2.0 is that customers can solutions tailored for their businesses and homes. offer suggestions for current and future Dell products, We offer customers choice. Customers can pur- services and operations on an interactive portion of the chase systems and services from Dell via telephone, Dell website called Dell IdeaStorm. It says: 'This constant kiosks and our website, www.dell.com, where they flow of communication, which is unique to our direct may review, configure and price systems within our business model, also allows us to rapidly gauge customer entire product line; order systems online, and track satisfaction and target new or existing products.' orders from manufacturing through shipping. We For large business and institutional customers, Dell have recently launched a retail initiative and plan maintains a field sales force throughout the world. to expand that initiative by adding new distribution Dedicated account teams, which include field-based channels to reach additional consumers and small system engineers and consultants, form long-term businesses through retail partners and value-added relationships to provide our largest customers with resellers globally. a single source of assistance and develop specific Customers can purchase custom-built products tailored solutions for these customers. Dell also and custom-tailored services. Historically our flex- maintains specific sales and marketing programmes ible, build-to-order manufacturing process enabled targeted at federal, state and local governmental us to turn over inventory every five days on average, agencies as well as specific healthcare and educa- thereby reducing inventory levels and rapidly bring tional markets. the latest technology to our customers. The market and our competition has evolved and we are now Dell Premier exploring the utilisation of original design manufac- For large organisational customers, Dell offers turers and new distribution strategies to better meet Premier (http://premier.dell.com), which is a secure, customer needs and reduce product cycle times. Our customisable procurement and support site or extranet goal is to introduce the latest relevant technology designed to save organisations time and money through more quickly and to rapidly pass on component cost all phases of I/T product ownership. The main benefits savings to a broader set of our customers worldwide. of Dell Premier are described as: Chapter 6 Relationship marketing using digital platforms 345 Easy ordering - a custom online store ensures free upgrades (e.g. memory); access to your products at your price. free accessories; Easy tracking - view real-time order status, online finance offers; invoices and purchase history details. service upgrades. Easy control - custom access groups define what The presenter also noted how, across Europe, the users can see and do within Premier. promotional mix has to vary to reflect the differences Marketing communications in buying psychology. He summarised the main differ- ences between customers as follows: Dell markets its products and services to small-to- medium businesses and consumers primarily by adver- UK - all about price; tising on television and the Internet, advertising in a CH - add value over price; variety of print media and by mailing a broad range of .DE - all about high-end products in mix; direct marketing publications, such as promotional . IT - design is important (); pieces, catalogues and customer newsletters. In certain DK - cheap is good; locations Dell also operate stores or kiosks, typically.NO - added value is key; located within shopping centres, that allow customers FR - tailored for France. to view its products in person and purchase online with the assistance of a Dell expert. Dell's use of digital media channels The main digital media channels used by Dell.com in Dell online communications Europe are: The management of the consumer site was presented to Paid search through programmes such as Google EConsultancy (2008). Dell has a three-stage order funnel: AdWords, which are used to promote value through marketing communications execution measured by time-limited offers related to the phrase searched site visits; upon. For example, a Google search for 'cheapest site merchandising measured by consideration% Dell' displays an ad: 'Discount Dell Laptops www. (site visits to e-store visits); dell.co.uk/laptop - Save up to 300 on selected Dell store merchandising measured by conversion% Laptops from 329. Buy online now! (e-store visits to e-receipts). Display advertising - for example, advertising on The presenter explained how Dell aims to understand technology websites - is particularly important for and act on customer behaviour based on identifica- the corporate market. tion of a series of consideration drivers - for example, Affiliate marketing - used to protect the Dell brand by the quality of online advertising; path quality through enabling affiliates to bid on terms such as 'Dell lap- tops' and to target niche audiences such as owners site; merchandising/offers - and conversion drivers - of gaming machines. for example, configurator 'ease of use'; accessibility Email marketing - an e-newsletter is used to keep in of decision support tools and consistency of message touch with existing customers and deliver targeted through the entire path. offers when their hardware may be renewed. Dell will invest in strategic improvements to the site to improve these levers - examples mentioned included How Dell use social media marketing new merchandising approaches such as customer ratings and reviews, videos, major 'path' or customer Cory Edwards, director of social media and reputation journey changes created through decision support tools team (SMART) at Dell has explained Dell's approach to to 'Help me choose'. There are also more tactical initia- social media marketing. He stresses the importance of tives to help deliver the right message to each customer commitment from senior managers which is exemplified including customisation/personalisation, real estate for Dell by CEO Michael Dell, who frequently empha- optimisation and message balancing. sises the importance of social media marketing to Dell. More tactical persuasion of site visitors is based on Edwards (2011) contains this quote from Michael Dell: price moves/optimised price position to market and the Engaging in honest, direct conversations with mix of product features. A wide range of different offers customers and stakeholders is a part of who we are, need to be managed. Tactical promotions which are who we've always been. The social web amplifies our driven by promotional 'end dates' which are weekly or opportunity to listen and learn and invest ourselves in bi-weekly include varying: a two-way dialogue, enabling us to become a better free shipping; company with more to offer the people who depend money-off discounts; on us. 346 Part 2 Digital marketing strategy development Edwards simply says, 'If content is king, then listening is queen' As an indication of the importance of social media listening to Dell, Dell has created a Social Media Listening Command Centre which has six wall moni- tors tracking what Dell's most influential customers are saying, trending topics relating to Dell, market perfor- mance including share of voice and ratings of senti- ment expressed about Dell. Around 25,000 posts in 11 languages are monitored daily by Dell's 'Ground Control Team'. Dell has a social media governance workflow which reviews the potential importance of these customer comments and identifies those it is worth following up with. The Ground Control Team is tightly integrated with the@DellCares Twitter team who engage around 1000 customers per week. Their role is to reach out to people complaining about Dell on Twitter. Edwards notes that the team has a 30 per cent rate of converting ranters to ravers. As well as responding to negative mentions as part of customer service, Dell has created an Online Influencer Relations Program. This is managed by identifying influ- encers across business unit, region or topic area. Key influencers are identified using a Conversation tracker, which is part of Dell's social media listening tool Radian 6. Influencers are provided with content and products which they may review or share. Dell has gone beyond virtual relationships introducing Dell Customer Advisory Panel (CAP) which Edwards describes as 'a ranters and ravers event'. Invitees are prioritised based on size of social media reach and their affinity with Dell. Relationship owners are designated and involved with ongoing efforts to build advocates. Within CAP days, Dell not only listens, but gives feedback on how problems are addressed. For example, Dell heard that there were too many dropped calls and unnecessary transfers, so it explained how ePhone CRM software is being launched across sites, which will improve reporting capability to track telecom issues and queue mergers to eliminate certain types of transfer. The reputation management we have described is only part of the social media marketing activities. If we review these activities according to the RACE frame- work (Chapter 1), we can see that Dell is involved in social media marketing activities across the customer lifecycle: Reach: Research, network and advertise to reach and interact with customers and prospects on the social outposts, communities and blogs relevant to your audience. (Inter) Act: This involves determining your goals and then working out the engagement tools that will encourage your customers to interact and will inspire them. Dell has clear goals around a number of financial and non-financial measures. They look at measures including operational savings through paid search and support savings and boosting customer loyalty measured through the Net Promoter Score. When customers interact with Dell, their experi- ences are shared via their social graph of followers or fans, so there is this viral effect which helps customer acquisition Convert: Here Dell is trying to leverage initial interac- tion to go through into real value of leads or sales. At a practical level, Dell has a clearance channel, Dell Outlet, that it uses to sell through Twitter. It may also offer promotional coupons through social media like Groupon or deals sites to encourage sales. Engage: This is the big challenge with social media: how to keep customers engaged. For Dell, engage- ment occurs on several platforms, but in particular within community forums, which are user-to-user support postings where topics range from support to pre-purchase or enthusiast discussions. There are millions of members with tens of thousands of discussions and accepted solutions each week. The Direct2Dell Network is also used for B2B customers with separate blogs for Enterprise IT, Small Business, Education, Investors, etc. They encourage guest influencers to join the discussion. Finally, another big part of engagement for Dell is IdeaStorm - one of the best examples of crowdsourcing through social media, which encourages ideas, feedback, innova- tion and dialogue. Over tens of thousands of ideas have been generated, with around 100,000 com- ments added, and a viral effect occurring through a Facebook app. Only several hundred ideas have been implemented, but the secret is that Dell closes the loop by feeding back to customers what has worked and what hasn't. Source: 2011 SEC Filing Econsultancy (2008): Dell case study: Online Marketing Masterclass, presented at the Royal Institute of British Architects, November 2008. Edwards (2011); Tackling corporate reputation with social media, presentation by Cory Edwards, director of social media and reputation team (SMART) February 2011, available to view online at www.slideshare.net/KerryatDell/dell-social-media- nma-event-london-v2-feb-2011 See also: www.slideshare.net /KerryatDell/dells-social-media-journey-econsultancy-master- classes-november-2009 http://content.dell.com/us/en/corp lour-story-company-timeline.aspx Question Describe approaches used by Dell within its site design and promotion to deliver relevant offers for different types of online customers