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Why Dell has a subtle, secret strategic advantage

Rob Enderle | June 3, 2013
The company is more focused on fixing your problem than selling you a product.

At this week's Dell Annual Analyst Conference, the company has been bringing up customer after customer to praise Dell products, services and sales approach. But the one thing nearly all customers are saying is that Dell's advantage, at least the one that interests them, is none of the above. It's that Dell leads with the question-"What problem do you want to solve?"-as opposed to hardware or software product or packaged service.

When most vendors enter an engagement, their goal is to sell a product, and their response to a customer request for help is to position that product as the solution. Few, if any, actually seem to care what the core problem is, let alone craft a custom solution to address it.

This is Dell's subtle, secret strategic advantage-the company is more focused on fixing your problem than selling you a product. The reason for this focus? Applied analytics.

The A-ha Moment: 'Take on Me,' Dell Tells Customers
The light went on in my head when I heard this story. Apparently a customer in an emerging market had about 600 hardened laptops that needed to be replaced. Most companies would bid the closest thing they had to what the customer apparently wanted.

Dell didn't. It first analyzed the core problem the customer was trying to solve, then bid a software solution instead so employees could use any number of personal electronic devices to better get the job done.

The result: Massive savings, since the customer didn't make any unnecessary hardware purchases, and a user base far more content to carry lighter, more portable products and not the expensive, heavy products it apparently didn't want in the first place.

By focusing on the actual core problem, and not just its products, Dell came up with a far cheaper way to address the problem. And end users, far from feeling cheated, liked the results better. It's a win for the IT department, a win for the often-forgotten user and a clear win for Dell.

Any Way Customers Want It? That's Not the Way They Need It
Dell is one of two technology companies aggressively using analytics to measure employees, customers and partners. (The other is EMC, a former close partner of Dell.)

These analytics showcase the need to understand and focus on the core problems. Doing so results in happier, more loyal customers and partners-and, as it turns out, the resulting engagements result in happier, more loyal employees as well.

Analytics helped Dell see that the traditional "lead with a product" approach was counter-strategic to building and retaining customers over time. If Dell instead leads with understanding the problem and then crafts an ideal solution from its analyses, then everyone's happier-and, importantly, customers more likely to stay with Dell are also more likely to sing Dell's praises to other customers. Turning customers into advocates is one of the most powerful ways to cut the costs of both customer replacement and acquisition.

 

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