Dell builds sales success around strong customer relationships

Dell Computer Corp. blew away the competition on the General Services Administration schedule last year.

The gap between Dell and its closest competitor, Gateway Inc., spread from about $40 million in 1997 to almost $248 million in 1998.

In sales reported from July 1996 through June 1997, the company had more than $270 million in sales. In the same period for 1998, sales jumped to almost $462 million, and during the summer of 1998 Dell racked up more than $208 million in sales.

Dell officials said the GSA schedule sales growth is a sign that Dell delivers a better, faster and less expensive product than anyone else. That, coupled with the number of people they send out every day into the federal market to keep in contact with customers, is a strong draw, said Bob McFarland, vice president and general manager of Dell Federal sales and marketing.

So why are companies such as Gateway and Micron, who also have a direct-sales model, unable to catch up? Dell has been in the federal market for almost 15 years, working with the same customers and getting to know them and their problems, and that makes a difference, McFarland said.

"Until you can manage your inventory and understand your customer base...you're not going to be like Dell," he said. "There's more to this than copying our business plan."

Over the next year, Dell is planning to push away from the desktop image many people have of the company. "You're going to see a lot of emphasis on enterprise solutions, and you're going to see emphasis on services," McFarland said.

Dell has worked hard on building a good reputation in the federal government by fixing Year 2000 problems, prompting many customers to become repeat buyers, McFarland said. And Dell has taken its custom configuration concept to the company's service packages as well.

"As we do custom configurations, we customize your service packages," said Jody Weinbrandt, senior marketing manager at Dell Federal. "Whatever the customer needs, they can collect. They're not forced to take one size fits all."

But the company expects that reputation to carry beyond the Year 2000. "The relationship you establish in the buying process has a lot of do with the consideration you get in the future past 2001," McFarland said.