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Customer Satisfaction Research July 2003

Dell receives top ranking in reliability and customer satisfactor in July 2003 analyst report.

EXECUTIVE SUMMARY

The Score Analysis of the Wave I 2003 data shows Dell�s and IBM�s weighted satisfaction indices have remained essentially constant, while HP�s weighted score has declined by a moderate level of 1.3% from its 4Q02 position. While the three vendors� ranks remain in their respective 1, 2 and 3 positions (Dell, HP and IBM), there has been a shift in the distances between their satisfaction indices. The distance between Dell�s and HP�s indices has increased and that between HP and IBM has narrowed. The distance between Dell�s and HP�s weighted satisfaction indices has nearly doubled from that of 4Q02, when the two competitors� scores were at a rare and marginal distance from one another. The current study results show the 1.9% distance separating them (up from 1.1% in the preceding quarter) runs about even with the average distance of the past year, while approaching the average 2.4% distance of the past two years. As the �Future Outlook� section demonstrates, this movement appears to be the beginning of a trend. Defined as a revival of customer support for Dell�s desktop products and services, this trend minimizes concerns for Dell regarding intensifying competition coming from its closest rival, HP. It appears the threat from HP may be cooling off, based predominantly on Dell�s ability to do a more convincing job at driving its value proposition message, while HP continues to work toward effectively improving its manufacturing and delivery efficiencies. While the gap between HP�s and IBM�s satisfaction indices has narrowed, the magnitude of that distance remains extreme at 5.7%.

The principal explanation of Dell�s increasingly competitive advantage over HP has to do with the perception of value. The single greatest contributor to the difference between the two vendors� scores, according to TBR�s weighted model, is desktop price/performance. Secondary contributors include out-of-box quality (where Dell�s performance was exceptional this reporting period, averaging at or above the �A-� level), delivery time, total cost of ownership and ease of doing business. Clearly, the Dell versus HP rivalry on the desktop does not resemble that of either the notebook or server segments this quarter, where substantial differences in customer perception between the two brands were difficult to extract from the data. IBM�s No. 3 ranking position has been determined by significant point losses against the competition across the areas of delivery time, price/performance, total cost of ownership and ease of doing business.

Full report [pdf]