Dell’s Self-Inflicted Reputation Crisis

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    Has the onetime industry leader completely stopped caring?

    Black Friday presents a great opportunity to grab new customers or bring old ones back with exciting deals. As with many opportunities, this one can also be a double-edged sword, as failure to meet expectations can lead to serious crisis management concerns. For example, Dell Computers, whose bottom line is already hurting due to the trend towards tablets and more capable smartphones, created a major reputation crisis for itself when it pulled an (allegedly) unintentional bait and switch on excited shoppers.

    Here are more details, from a Huffington Post article by Catherine New:

    The Austin-based PC-maker oversold its widely promoted “doorbuster” laptop deal — a 14-inch Inspiron 14z marked down to $299 from $599. Now, instead of canceling or delaying orders, Dell is trying to pass on a different, bigger model to customers.

    In nearly two dozen emails to The Huffington Post on Wednesday, some anguished customers said Dell’s delayed and minimal response to the issue prevented them from scooping up other laptop deals. Some reported losing out on cash-back deals with their credit cards after Dell switched their orders. Other customers agonized that the confusion and time spent trying to sort out their order has meant lost quality time with loved ones over the holiday.

    If you’d like a glimpse of the type of negative sentiment that Dell brought out in its customer base, just have a quick look at the comments on Catherine’s HuffPost article. Suffice to say, people were extremely upset and felt, understandably, that they had been duped into buying an inferior laptop by the promise of an amazing Black Friday deal, especially because it took Dell almost three full days to notify customers of the problem – a move that many felt was designed to have them miss out on other sales.

    So where’s the apology from Dell? The promise to honor all purchases, even if some must be delayed? Well, apparently it’s not coming. Dell simply shrugged and blamed computer problems while bringing on extra customer service reps to handle phone lines overloaded with customers futilely trying to get the product they ordered.

    The bottom line here is that if Dell can’t even be bothered to care about its own reputation, then losing market share to handheld devices is the least of its concerns. The company needs a change of corporate culture, and fast.

    For more resources, see the Free Management Library topic: Crisis Management

    [Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]