Business Principles

Companies can satisfy customers in many ways. Most buyers want a high-quality product at the lowest possible price and immediate help when trouble occurs with a product. Successful firms in recent years
have introduced innovative ways to meet customer expectations. Not only pizza businesses make home deliveries; now many furniture companies make deliveries to the customer’s home on the day of purchase. United Parcel Service and Federal Express not only make door-to-door deliveries but also pick up packages to be shipped from customers’ homes. Best Buy offers home repairs of computers and other electronic equipment using their Geek Squad.

Dell Computer Corporation, however, was the first to do what everyone said would surely fail—sell computers using a toll-free phone number. Michael Dell, the founder of the firm, was told that people want to see, touch, and try highly technical products before they buy. However, those critics were proven wrong.

Michael Dell, who had always looked for easier and faster ways to get things done, got an idea while in college that he believed would serve the computer customer well. He would provide customers with a
catalog of computers and computer parts. When they knew what they wanted, they could call his toll-free number, place the order with a credit card, and expect to have the computer shipped directly to their
homes or offices within a brief period. Dell worked with computer parts suppliers and assemblers to quickly build the specific computer for each customer once the order was received. Because he didn’t incur the expense of maintaining a physical store or a large inventory of parts and supplies, Dell was able to keep prices low.

To further make customers happy, he provided a guarantee, and later an extended repair contract offering efficient mail-in or local service if anything went wrong. The idea worked beyond anyone’s imagination. Within a few years, his business was profitable and growing rapidly. With the development of the Internet as a method for customers to quickly locate and purchase products, Dell extended its direct sales efforts through an interactive website. Dell is now one of America’s largest firms, with computers sold around the world using many of the same ideas that Michael Dell created in 1983, when the business was launched.

Many other computer firms have copied his low cost, fast service, and customer satisfaction guarantee and have initiated direct-sales efforts. Many other firms in different businesses soon adopted Michael Dell’s ideas to gain the effectiveness and efficiency that lead to satisfied customers.