Dell and Their Customer Satisfaction Issues

With the latest battery recall and increased customer service numbers, can Dell survive? The quarterly American Customer Satisfaction Index (ACSI) has been released and it shows positive but challenging changes in the maturing personal computer category. The survey is produced by the American Society for Quality (ASQ), in cooperation with the University of Michigan and the CFI Group. ForeSee Results is their e-commerce sponsor.


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The quality index shown in the American Society for Quality (ASQ) Quarterly Quality Report concerns customers’ perceived quality of goods and services provided in items such as autos, personal computers, major appliances and electronics, as well as e-business. Each quarter a different sector is highlighted.

Personal computers recorded a significant increase in this quarter’s ACSI results. These results are more significant because the economy slowed this quarter and both prices and wages increased. ASQ.org reports that manufacturing costs, specifically energy and materials, increased as well.

Positive for consumers, the cost of computing power continues to decrease. Today’s personal computer costs less, is faster and has more features than computers just a year ago, although accessories, gaming features and multimedia options drive up the cost of purchases.

The personal computer category experienced a 3.8 percent increase. Dell can take credit for this rise and has gained back all of the survey losses it has seen since the second quarter of 2004, according to ASQ.org. Their scores did not top Apple, which raised their scores completing their computers’ transition to using Intel microprocessors. Dell has overtaken rival Hewlett-Packard in the latest survey.

The industry also reached a new maturity mark. Computer manufacturers now need to meet the expectations of general users versus technical types or businesses, shown by a slowing of sales growth for business computers. This will require a greater ease of use and generally more user-friendly operations, according to ASQ.org.

Other big news concerning Dell is their latest battery recall. This is the computer maker’s third major laptop battery recall since 2001, according to ARS Technica. In 2001, 284,000 notebook batteries were recalled for potential overheating and fire hazard issues. In 2005, Dell recalled 22,000 batteries for the same reason. And now 4.1 million laptop batteries are being recalled, according to FCW.com.

The cost of this recall is potentially staggering, according to Endpoint Technologies’ analyst Roger Kay. Kay estimated the total bill might increase to some $200 million, although Sony would pay most of the cost of the recall, as they manufactured the defective batteries, according to ARS Technica.

The issue behind the recall may be if and when other laptop batteries could explode as laptops incorporate more powerful features, as well as larger screens. ARS Technica reports that technological progress has been slow over the last few decades, but more powerful laptops will become more and more susceptible to hot batteries, as features grow.

In other Dell news, the company announced an investigation by the Securities and Exchange Commission (SEC) that was initiated a year ago. There are no indications that any violations of the law have occurred. It is “really just a list of questions,” according to CFO Jim Schneider, speaking to TheStreet.com. Schneider also did not disclose the types of issues being investigated.

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