Dells Reputation Tipping Point

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All sorts of opinions are flying around about Dell’s recall of over four million laptop computer batteries announced Monday.

A quick scan of blog posts in Technorati show some people saying it’s the largest product recall in consumer electronics history. Others say Dell has issued a recall for the computers themselves (no, it’s just the batteries).

Many posts I see make reference to the recent cases where Dell laptops have burst into flames, events that clearly triggered the recall announcement.

It’s worth mentioning that the batteries are manufactured by Sony not by Dell. But will anyone make any differentiation in relation to that? It’s doubtful. As far as most people will care, it’s a Dell computer battery. So on the face of it, it’s Dell’s issue not Sony’s, although Bloomberg reports that Sony may share the costs of Dell’s recall.

If I had a Dell laptop, I’d think twice about leaving it running unattended whether or not that laptop is on the list of models affected by the battery recall. And if I were in the market for a new laptop, this battery issue would add a big negative for Dell when I compare different brands and models.

Anyway, they’ve announced the recall and have launched a special website with detailed information.

Some people are saying this is a crisis for Dell.

Yes, I think it is. A crisis to do with Dell’s overall reputation and a crisis of customer confidence in the products they’ve bought.

It’s not the battery recall itself that makes for the crisis, though. I think this latest high-visibility issue just adds icing to Dell’s cake of woes. That’s the crisis.

Last year’s saga of poor Dell customer service has become enshrined in the phrase Dell Hell – just Google that and see what you get. Most recently, there is Dell’s questionable behaviour in China over PCs people bought being different to what was advertised. Dell has started to address that one by apologizing and offering refunds.

Yet all these things leave a bad taste in your mouth. You start to wonder whether this really is a company you want to do business with. Or invest in.

What Dell does now, and how it communicates what it’s doing, could be a tipping point in salving the company’s reputation. It could easily go the other way, too. Direct2Dell, the corporate blog Dell launched last month, should play a prominent role in their overall communication, as no doubt it will. For instance, there are two good posts there
about the battery recall with the beginnings of conversations with customers.

But it’s what Dell do rather than what they say that will have a lasting impact on what people think of Dell. And that will impact Dell’s fortunes. The company will report its latest financial results in two days’ time. More interesting, perhaps, will be the future earnings guidance they offer and what they say about their marketplace.

What will be equally interesting about that earnings announcement will be the people who will write about it and blog it, either live or subsequently, whether they are bloggers or mainstream media journalists. What opinions will people form? What will they say in relation to the cake of reputation woes? And what will those opinions contribute to any reputation tipping point?

For the record, I own a Dell desktop PC which I bought last year and with which I am extremely happy. I have had my own exasperating experience with Dell recently, but that’s another story.

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Neville Hobson is the author of the popular NevilleHobson.com blog which focuses on business communication and technology.

Neville is currentlly the VP of New Marketing at Crayon. Visit Neville Hobson’s blog: NevilleHobson.com.

Dells Reputation Tipping Point
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