By Connie Guglielmo and Jonathan Thaw
Aug. 16 (Bloomberg) -- Dell Inc.'s customer satisfaction fell this year as consumers complained of long-wait times for help and trouble getting questions answered.
Customer satisfaction at Dell, the world's largest personal- computer maker, declined 6.3 percent, based on the University of Michigan's American Customer Satisfaction Index. Dell fell further behind Apple Computer Inc., which grabbed the top spot in 2004.
Dell's ``dramatic'' decline may be a sign the company is poised to lose sales, said Claes Fornell, marketing professor and head of the university's National Quality Research Center. Apple's customer satisfaction rating was unchanged at 81; Dell's declined to 74 from 79 last year. Among Internet companies, Time Warner Inc.'s America Online had the biggest gain.
``Dell is dropping in large part because of call-center problems, including long-wait times and difficulty with consumers getting their questions answered,'' Fornell said yesterday in an interview from Ann Arbor, Michigan. ``Consumers are also questioning the reliability of their PCs.''
Based in Round Rock, Texas, Dell gets about 20 percent of sales from consumers and said last week ``overly aggressive'' price cuts on PCs to woo customers contributed to a shortfall in second-quarter revenue.
``We take it very seriously and we're focused on improving the quality of our service,'' Dell spokesman Mike Maher said in an interview yesterday. Dell over the past year has hired additional service staff, offered more training and opened four customer- service centers around the world, he said.
Poll of 80,000
The University of Michigan polls about 80,000 consumers annually to ask how U.S. companies are faring in terms of customer service, Fornell said.
Apple, maker of the Macintosh PC, kept customer satisfaction at the highest level since 1994, the first year of the survey. Its Mac shipments are at a five-year high. Dell's customer satisfaction is at the lowest since 1998, based on the index.
Shares of Dell fell 6 cents to $36.58 yesterday in Nasdaq Stock Market composite trading and have lost 13 percent this year. The company said last week revenue rose 15 percent to $13.4 billion, the smallest sales gain in three years and less than the 17 percent analysts' estimated.
Cupertino, California-based Apple's shares, up 48 percent this year, rose $1.58 to $47.68.
Hewlett-Packard Co., the No. 2 PC maker, had a 2.8 percent gain in its customer satisfaction rating, with the score rising two points to 73.
Leading Indicator
``The satisfaction of customers is pretty much a leading indicator as to whether customers will come back and buy more,'' Fornell said. ``Apple looks good. Dell is facing challenges. If I were a Dell shareholder, I'd look at the results.''
Dell Chairman Michael Dell told analysts last week internal surveys showed customer satisfaction ``improved'' in the past quarter even as PC shipments rose and the number of consumers being served increased.
Though he didn't participate in the survey, Fornell said his wife, a Dell customer, has waited on hold for an hour at a time to get the help she was promised under a paid technical support program. Fornell said he'll probably consider Apple when buying his next PC.
America Online, a unit of Time Warner Inc., had the largest gain in customer satisfaction among Internet companies, rising 6 percent to 71 from 67 a year ago. AOL had a score of 56 in 2000.
New Services
The company, based in Dulles, Virginia, is rolling out new free services, such as a revamped Web site as part of a strategy to lure advertisers and users. New content such as on-demand video of the Live 8 concerts helped bolster AOL's customer satisfaction score, said Larry Freed, chief executive officer of ForeSee Results, a market researcher in Ann Arbor that uses the survey to advise clients.
For the third year in a row, Google Inc., the most-used Internet search engine, had a score of 82, the highest rating of any Internet company measured.
Yahoo! Inc., the most-visited Web site and No. 2 search engine, closed the gap with Mountain View, California-based Google, rising to 80 from 78 last year, the study found.
New products, such as a digital music download service and a tool for creating Web logs, boosted Sunnyvale, California-based Yahoo's score, said Freed.
Microsoft Corp.'s MSN this year had a score of 75, unchanged from a year earlier.
Walt Disney Co.'s ABCNews.com had a score of 74 and was the highest-ranked online news site. MSNBC.com, a joint venture of Microsoft and General Electric Co., had a score of 73. Time Warner's CNN, Gannett Co.'s USAToday.com and the Web site of the New York Times Co. all had scores of 72.
Freed said the narrow range of scores for online news sites stemmed from the difficulty media companies face creating a ``personality'' to foster customer loyalty for their sites.
To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net; Jonathan Thaw in San Francisco at jthaw@bloomberg.net.
Last Updated: August 16, 2005 00:01 EDT
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