The Dell business model is direct to market, a total solution for home or business. It could be considered a cliché but they are essentially designed for the consumer by the consumer, as they have implemented over 500 ideas put forward by consumers on their online networking page, ‘IdeaStorm’ http://www.ideastorm.com/.
Dell’s target market is huge thanks to their intuitively designed interface, a potential customer simply selects if their requirements are for home or office, as they offer a solution for basic computing right through to powerful operating systems for business. This simple but effective business model gave Dell the first mover advantage, as they pioneered online sales for PC’s (Chaffey & Ellis-Chadwick, 2016, p. 214).
What makes this business model so successful? For me it is their ability to focus on the customer, by cutting out the middle man they have essentially built a business based on consumer wants and needs, as witnessed on the 2007 site ‘IdeaStorm’, were as a consumer you have the ability to suggest new products or features that you would like to see directly to Dell. Your suggestions are discussed in a virtual ‘Think Tank’ for members, Dell than closes the brainstorm loop by providing updates on improvements or products that have been added through this process.
Image source: (Ideastorm.com, 2016 http://www.ideastorm.com/)
As you can see over 25 thousand ideas submitted, over 740 thousand votes, and 549 ideas implemented. This is really innovative in my opinion and responds to the consumer needs, something most businesses find hard to do.
Michael Dell, the founder of Dell recognises that their ability to listen to their customers is what separates them from the pack, in a recent speech he was giving to students at the University of Texas. He recalls that this lesson, learnt early, shaped the business to what it is today.
“One lesson was from a failure to manage our inventory properly, and the other was from a failure to listen to our customers when it came to developing new products” – (Dell, 2016)
Their ability to recognise that the needs of their customers is the most important element to success. If you do not have the ability to retain, inform, and engage your existing customers, only attract new ones, your success will be short lived as the next new trend will dissolve your market share. This can be seen by the activity on Dell’s interactive website ‘IdeaStorm’ allowing consumers to shape new products, which not only engages them, but goes a long way to retaining them.