can "dell hell" be avoided?

Jeff Jarvis was an ordinary guy. And as many other ordinary guys, he decided to get a Dell computer sometime in 2005. He was unlucky: his laptop turned out to be a lemon and he ended up enduring the usual after sales nightmare that you get when you happen to buy pretty much any defective high tech item.

Jeff Jarvis was an ordinary guy but he was also a blogger, one with reasonable exposure. He started blogging about his pains and getting massive response from his readers and the friends of readers (measured in hundreds of comments). Soon he captured the media attention and by the time he wrote an open letter to founder and CEO Michael Dell, "Dell Hell" was already a catchy slogan that eventually made its way to an independent web page. 

A picture is worth a 1,000 words, and the picture below can be revealing:

As you can see, after "all hell broke lose" in the blogosphere Dell shares went from over $40 to a minimum of $20 in 1 year. Mr. Dell finally agreed to meet Jeff Jarvis in October 2007 (over 2 years after the open letter) after various attempts to fix Dell's customer service but most of the damaged was made.

The million dollar questions (or should I say, the $20 per share questions) are: could this be avoided and how so?

The answer to the first one is certainly yes!

The answer to the "how" is more tricky.

1. Engage in the the dialog
It is clear enough that Dell has misread the importance of Jeff Jarvis' lemon laptop and understated the impact that this one incident could have in its public image through the virulent effect of the blog world. So an obvious prescription to Mr. Dell (and any other consumer goods producers for that matter...) is: get on your marketing or IT budget room for a bunch of people to run through the blogs, social networks, online news and, arguably, even relevant chat rooms and forums to check and respond to what is being said about your company and your products. Engaging in the dialog is sometimes your customers want and can make a such a difference and make a world of difference in preventing PR misery.

2. Go back to basics
Even if Dell had been top of the tops in ePR, if their products are bad or, as it appears to be more correct in this case, your after sales is appalling then you are in for trouble.

I suspect that Dell's woes between 2005 and 2007 were not chiefly related to post sales "Jeff Jarvis' Dell Hell" case but rather to continuously missing investors' expectations of which this June 2006 article is an example. And this was probably more related to the decline of Dell's original sales model (sales to end customers via 3rd party stores) in light of the rise of the more cost efficient direct online sales than to its post sales misery.

Having said that, laptops are, nowadays, pretty much a commodity. And the 2 key competitive advantages that you can have in commodity business are 1) lowest cost + large scale and/or 2) superior customer service (if you are lucky to have this option, because coffee makers and cement producers don't).

In 2005 Dell had neither of the two so its market value had only one way to go...