A number of aspects about the Dell-EMC merger are unusual.
First, Dell is private while EMC is a larger public company, and the resulting company will be private. To my knowledge this is the largest private acquisition of a public company in the technology sector. Once the merger is complete, the resulting company will rival IBM at its peak in the 1980s.
Dell uses a process for mergers that was developed at IBM and refined at Dell, which, as far as I know, still has the best merger track record of any tech company. EMC’s record is nearly as good, but they are far more creative with regard to structure, having everything from wholly-owned subsidiaries to majority-owned subsidiaries and even joint ventures in their portfolio.
The one area EMC stands out ahead of the pack is its Total Customer Experience (TCE), or customer loyalty program, if we use the generic term. Here EMC has put substantial effort into refining a process, similar to the way Dell refined its merger process. Last week I was briefed on its progress.
So what will TCE mean to the combined company?
I’ve been following EMC’s Total Customer Experience program since nearly the beginning of the effort. By way of background, my advancement into IBM’s executive ranks came as a result of an in-depth report which highlighted why the firm was failing and provided detailed recommendations on how to correct the problem. Later, as an analyst, I was instrumental in pointing out Dell’s issues with customer loyalty in the late 1990s and worked with Dell to identify and correct the related problems. So I have decades of interest in this topic. I generally find that it is far cheaper and easier to keep a customer happy than it is to get them back once you have lost them.
This speaks to EMC’s and Dell’s historic relationship because, before this program got off the ground, Dell used to resell EMC products but they weren’t happy with what EMC was giving them. It wasn’t a quality problem but a market segmentation issue. Dell sold into the mid-market; EMC sold into large enterprise. Dell needed something built and priced for their market, not a repurposed enterprise product. EMC refused until Dell severed ties and built their own storage product. Joe Tucci, EMC’s CEO, often lamented this episode and the fact that they didn’t see it coming. I believe this experience with Dell was likely was one of the reasons EMC create TCE—so this sort of experience would never happen again.
One of the interesting aspects of TCE is that EMC can tell which customers are worth resourcing and which aren’t. In short, they know which customers just buy on price and which buy on relationship. They can favor the latter and be less rigorous about retaining the former. This not only allows them to better optimize sales and support efforts but also to focus on the needs of those that want a deep relationship from the company rather than those of folks who will change vendors for some slight savings.
Last week’s presentation was about the progress of TCE. Carolyn Muise is VP over this effort and, strangely enough, the last time I was at Dell I ran into her in the lobby. Apparently, Karen Quintos, one of the most powerful executives in Dell, will be personally overseeing the integration of Muise’s effort with Dell’s, and she has told me in the past that she was extremely impressed with Muise’s work.
The progress report that Muise shared showcases why. Currently, the data acquired to assess customer loyalty, which feeds into their analytics engine that provides recommendations, includes executive telephone interviews, web surveys focused on customer loyalty, transactional surveys focused on quality of engagement, ad hoc surveys to facilitate better decisions, partner customer surveys to strengthen partner relationships and joint offerings, partner loyalty surveys to asses partnership quality, voice of field surveys to strengthen the sales channel, product surveys to assess problems and provide a decision matrix for enhancements and competitive assessments to help create stronger product and service offerings. In 2015 they collected and analyzed 92,000 surveys, and the resulting decisions increased its net promoter score (NPS) 24 percent year over year.
They roll these responses up and then are able to parse them into prioritized actionable information which can result in changes to software, hardware, services, partners and/or the channel based on which will have the largest positive impact on customer loyalty. It is interesting to note that EMC has shared its NPS numbers are up nearly triple digits since this program got started back in 2013.
One interesting part of this effort is the aggressive creation and nurturing of customer advocates. Reliable and credible customer advocates have long been one of the strongest sales tools, yet there is seldom much of a focus on creating or nurturing them, which makes the EMC effort stand out very powerfully.
The end result is basically a digital representation of “the voice of the customer” available to every EMC exec as part of their decision making process.
I think every tech company should have a process like TCE that focuses on customer loyalty and advocacy and assures that the customer voice is a key part of every major decision. However, I can see how this could also evolve. Were this coupled with an AI engine, you could have a digital representation of the aggregate of your customers, and executives could have a real-time conversation with that virtual customer voice. I think I’d like the job of programing in the snarky part of the personality, anticipating executives that might choose not to listen to this avatar. Maybe this should wait until they can put it into a robot that can slap the offending exec upside the head.
In any case, even pre-merger, some of these EMC practices are already migrating to Dell. The end result should be far deeper customer engagement, focus and understanding—not to mention far stronger customer loyalty and retention. If it weren’t for the fact that EMC is really large, that alone might justify this merger.
In the end, we will have the firm with the strongest merger process coupled with the firm with the strongest customer loyalty process. The combination of these two skills should be truly epic.
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