SAP Global Report: Dell's Lionel Menchaca

         [Lionel Menchaca. Photo from File]

[NOTE-Jan 11, 2008. I rewrote the intro to this piece. It needed it. I also fixed a broken link. Lionel's Q&A remains unchanged.]

The Dell script pretty much follows the classic Hollywood formula: Sin, Suffer, Repent the Flourish.  Dell's sin was clear. In order to win a hardware price war it scrimped more than it should have on product  and service. It suffered by watching loyal customers migrate to such rivals as HP who overtook it for category leadership. It suffered further from seeing it's revenues and stock priced plummet into a prolonged and well-publicized freefall.

Dell is just now concluding an 18-month period of penitence. The CEO who steered the Dell Supertanker nearly onto the rocks was unceremoniously replaced at the helm by Dell Founder Michael Dell.  The company is buying back its still tepidly priced stock. It has begun a reinvestment program of $1 billion into support.  Reviews of new Dell products are mildly favorable but not quite laudatory.

Dell is most certainly coming back. Dents in its reputation have been hammered out. But the company has not yet returned to the sort of flourishing it enjoyed for more than a decade.

What makes this all so interesting to me is the role that blogging has played in this apparent comeback. The company started a blog in June 2006. Now called Direct2Dell, it has become the most popular blog published by a major global enterprise.

Direct2Dell is a team blog, but the face of D2D, as many people, including Dell folk call it, is Lionel Menchaca, who is the team's most prolific, passionate and frequent contributor. Lionel seems to specialize in the hottest of issues and he handles them in a calm authentic voice. His, interview appears below.

Will Dell actually enter Hollywood's predicatbly closing scene, the one where everyone flourishes and manufacturer and customers live happily ever after?  That remains to be seen. But because of Dell's new faces of social media, there are a whole lot more people cheering for the company than was the case 18 months ago.

Here is the result of my interview with him:

1. First, tell me a bit about yourself. Where were you born and raised?  When did you join Dell? What did you do at Dell before you became the primary blogger?

I was born and raised in Texas. I’ve been a hardware and technology geek since before high school. My career with Dell started 14 Years ago, in technical support—I was a front line hardware tech for two years, and an OS tech for a year after that. Back then, I thought excellent service and support was the best way to create loyal customers. I still do.

I spent the next several years managing and supporting product reviews for Dell, starting  with PowerEdge servers in 1997.  In the years since, I’ve been responsible for reviews and product PR for many of our product lines—everything from storage products to notebooks and desktops. Just before my current role, I also spent a couple of years doing media relations on the corporate side.

Outside of work, I have a wife and two young kids that mean the world to me.  I’m a huge music fan and have watched the Dallas Cowboys every season since 1976.

2. Most people know the general reason why Dell started blogging, but exactly what happened? What finally made Dell decide to blog?  Who made the decision? Why were you selected?

There wasn’t one specific issue that set things in motion, but Michael Dell has been a catalyst throughout the process. He was the one who asked us to reach out to customers who blogged about their Dell experiences to offer some assistance. That led to the creation of a team of Dell Customer Advocates back in April 2006 four months before we launched Direct2Dell. That’s when we started listening and engaging in conversations with customers throughout the blogosphere. During that critical four-month formative period, we learned a lot about what kinds of conversations were going on, and how to be part of them. For us, that was an invaluable part of the process.

Many people assume that we started blogging because of Jeff Jarvis and Dell Hell [read in reverse order], but that wasn’t it. Jeff’s situation was indicative of a bigger fundamental issue that was going on—our customer service levels in the US were slipping back in July of 2005. I blogged about it here. We started blogging because we knew that customers were talking about us, and we didn’t want to sit on the sidelines any more.

Why me? I think it was a combination of things. Throughout my years here, I’ve established contacts within many parts of the company, especially on the product side. Even though I wasn’t a blogger in the beginning, I understood both the technical and conversational aspects and had been reading quite a few blogs before this job became a reality. My technical support background  was also key. That’s why I was one of the folks tasked with getting the Customer Advocate team up and running. And by the way, that team recently celebrated passing the 5,000 blog post mark.

3. When the blog first came out you faced a firestorm of cynicism and criticism. How was this received among the various internal powers in marketing, legal etc. To your knowledge did Dell ever consider abandoning the effort?

You’re right, those early days were tough ones.  We faced criticism from bloggers and from customers alike. The level of negativity scared some Dell folks initially. Our legal department has been pretty realistic about things. There are a handful of issues that need to be reviewed by them—any safety- related issue, for example.  There are a couple of others but, by and large, it’s common sense stuff.

The other two departments that are directly affected by social media are communications and marketing.  By that, I mean they are the organizations that have to come to grips with the loss of control. We’ve made some progress in both departments, but we still have a long way to go. So far, I think we’ve seen some internal pockets of success, but it’s clear that our continued success hinges on convincing more and more Dell folk  within those organizations that open conversations will be a competitive advantage in the future.

I’ve never thought about abandoning the effort, and no one has asked me to.

4. After a few weeks, the conversation seemed to get a lot more constructive and polite. Why? What changed?

I’d like to think that we built our credibility by blogging the right way. To me that means blogging about topics that our customers ask us to address no matter how negative. That process took time because  we had to dig ourselves out of a credibility deficit that we helped create. By working through that, we earned the right to enter the conversation. That changed things.

5. Can you give me some statistics on the blog? How many uniques? How many comments? Growth?

We’ve been tracking at about 1 million page views per week. Unique visitors have reached as high as 300,000 per month.

One of the most important metrics is the change in the tonality of the conversations. In 2006, at the low point , almost 50% of the conversations about Dell were negative. Today, we are at about 23%. I don’t attribute all that success to our digital media initiatives, but it’s clear that they have accounted for part of it.

6.  As you know, many enterprise decision makers are fearful of being shouted at, lack of adequate measurement tools, loss of message control, leaking secrets and of course--no clear ROI. How would you address each of these?

I think all of those issues are reasons why corporations stay away from joining conversations. I would argue though that the benefits of being part of the conversation  outweigh all the risks. In my view, it’s really about facing the reality of the changes that are happening in front of us.  Companies need to admit that control is shifting toward customers. More and more customers are talking about companies they either like or dislike. Those conversations happen with or without companies being actively involved.  And it’s becoming increasingly clear that those conversations have more influence over perception than much of the marketing material and PR messages that companies produce.

We wrestle with measurement tools and ROI all the time for a couple of reasons:

•    This is a new, but maturing field, and that means it will take time to develop  tools and metrics that mean something on a broad scale
•    Proving ROI in social media almost always involves looking at a topic over an extended period of time

In my view though,  the real value in social media is that it has the potential to change customer perception in ways that just weren’t possible before.  Just because that’s hard to measure doesn’t mean it’s not worth doing.  Time will tell, but it seems to me that not being part of the conversation is a far riskier proposition.

7. How has social media in general and D2D specifically changed Dell?

Direct2Dell has made us better listeners. It’s forced us to see things from a customer point of view, which we had gotten away from for a while. Direct2Dell also opened the door for us to expand into other digital media efforts like IdeaStorm and StudioDell. IdeaStorm is great because it’s community-driven. Our customers tell us how we can improve and tell us what ideas are most important through voting.

Between our own social media efforts and monitoring and engaging with customers in the blogosphere, I think we are have developed better listening skills in general. This work has shown us that how, how often and what we communicate is changing: timeliness is more important than ever and sometimes that means  setting expectations that we are working to address an issue before we have all the answers.

And while supporting our own properties is important, we realize that many communities that our customers take part in are outside Dell. What’s most important is that we ultimately join conversations wherever they occur, not just on our own properties.

8.  What are some of the stickiest issues D2D has caused you to face?

1)The exploding notebook in Osaka. It was a huge topic of conversation the first week that we had launched Direct2Dell. I blogged about it, and linked to Engadget on the third day after we had gone live. Inside the company, it caused some friction, but I think it was the right thing to do. That helped set the tone for what customers could expect from Direct2Dell—we weren’t going to shy away from negative conversations.

2) The battery recall. Back in August 2006, when Dell was the first company to announce a battery recall, we received some criticism. In the weeks and months that followed, other companies joined in after us.

3) The 22 confessions post on the Consumerist.  This was a situation that pitted the command and control philosophy vs. the new reality of the blogosphere. Here is my post that connected the dots.

4) Product delays: Starting with the XPS 700 gaming desktop which was launched before Direct2Dell existed, then products like the XPS M1330 notebook and later the Inspiron color notebooks. Making customers wait for products is a sure way to create a bad experience.

5) The XPS 700 motherboard upgrade issue. Not setting customer expectations properly created a situation of many unhappy customers. We worked through it and ultimately offered XPS 700 customers the option to upgrade to  a later product at no cost.

Comments

[Tech For Novices]

scoble is quoting you for an apple article?

[Jeremiah Owyang]

Lionel is truly one of the business blogging heroes, it's great that we're getting to see from this interview much of the behind scenes work he and other Dell folks have done.

Thanks Lionel and Shel

[Derek Abdinor]

good, honest post.
I feel Dell's presence on Twitter and DellShares (Investor relations blog) are more groundbreaking in their respective fields.